* LATEST MARKET DEVELOPMENTS *

In overnight news, Italy’s Prime Minister Mario Monti announced he will resign from office early next year. That news pressured the Euro currency and prompted an uptick in Italian and Spanish bond yields. The news also prompted some flight to safety buying of gold and the U.S. dollar. The OECD issued a report overnight that said the U.S., China and U.K economies will continue to grow slowly in 2013, but that economies in the European Union, Japan and Canada will contract. The OECD said China’s economic slowdown has ended. Over the weekend Chinese industrial output was reported up 10% on an annualized basis in November, which was above expectations. The China news is also a bullish underlying factor for the raw commodity markets to start the new trading week. The market place is awaiting this week’s last Federal Reserve FOMC meeting of the year, on Tuesday and Wednesday. The “Operation Twist” program ends and the FOMC members must decide whether to extend a bond-buying program. Many believe the Fed will continue to purchase U.S. Treasuries outright and implement “QE4” at this week’s meeting. That would be raw-commodity market bullish, including bullish for the precious metals markets. Also in the U.S., focus of the market place remains on the “fiscal cliff” tax increases and spending cuts that is fast approaching. President Obama and House Speaker Boehner did meet face-to-face on Sunday to discuss the matter. While the market place presently perceives odds are higher than not that there will be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff, the overall situation continues to be a bearish drag on many markets, including the raw commodities and stock markets.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly lower early today. Prices are still in a three-week-old uptrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 1,418.80 and then at last week’s high of 1,423.90. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 1,408.60 and then at last week’s low of 1,397.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are lower early today. The bulls are fading a bit. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is located at the overnight high of 2,643.25 and then at 2,650.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at last week’s low of 2,622.50 and then at 2,611.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Prices are slightly lower early today. Sell stops likely reside just below technical support at Friday’s low of 13,085 and then at 13,050. Buy stops likely reside just above technical resistance at Friday’s high of 13,150 and then at 13,200. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is above the 18-daymoving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are higher early today. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are stilll bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 150 2/32 and then at 150 16/32. Buy stops likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 149 18/32 and then at Friday’s low of 149 11/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

March U.S. T-Notes: Prices are higher early today. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 133.26.5 and then at the contract high of 134.01.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.18.5 and then at Friday’s low of 133.15.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating:
6.0

U.S. DOLLAR INDEX

The March U.S. dollar index is firmer in early U.S. trading today, on some safe-haven demand. Bulls are gaining upside near-term technical momentum. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.75 and then at Friday’s high of 81.05. Shorter-term support is seen at Friday’s low of 80.39 and then at 80.00. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are firmer early today, on short covering. Bulls are fading. In January Nymex crude, look for buy stops to reside just above resistance at $87.00 and then at $87.50. Look for sell stops just below technical support at last week’s low of $85.68 and then at $85.36. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed in overnight trading. Soybean bulls have gained some fresh upside technical momentum recently, while trading in corn and wheat remains choppy. Grain market traders will look to monthly USDA supply and demand report on Tuesday for direction. My bias remains that there is not strong downside price potential in the grains in the coming weeks and months.