* LATEST MARKET DEVELOPMENTS *

In overnight news, German manufacturing orders were reported up 0.8% in December, which was better than expected and hints the European Union’s largest economy has turned the corner toward recovery. Generally, EU economic data has been more upbeat than not recently. However, Italian and Spanish bond yields crept higher Wednesday, which signals fresh investor unease about those two still-troubled EU countries and their political problems. In Asia, Japan’s central bank continues on its aggressive path toward reflating its economy, meaning deflating the yen. The Japanese yen fell to a fresh 2.5-year low against the U.S. dollar and a three-year low versus the Euro currency Wednesday. A Bank of Japan board member reportedly said Wednesday currency manipulation (a weaker yen) is a plausible avenue to stimulate domestic growth. The world’s fourth-largest economy printing huge amounts of its currency is an underlying bullish factor for the gold and silver markets. On Thursday the European Central Bank holds its monthly meeting, including a press conference by ECB chief Mario Draghi. The ECB is expected to leave its interest rates unchanged, but Draghi may tip his hand on monetary policy changes at his press briefing.Also later this week China will issue a fresh batch of economic data, including inflation and trade balance reports. The market place will closely scrutinize the ECB meeting results and the data coming out of China. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the U.S. Treasury quarterly refunding announcement, and the weekly DOE liquid energy stocks report.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly lower in early trading today but hovering near Tuesday’s five-year high. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are still 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 1,510.80 and then at 1,520.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,490.50 and then at 1,475.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are weaker early today. Bulls have the overall near-term technical advantage amid recent choppy trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the overnight high of 2,757.00 and then at the January high of 2,764.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,725.00 and then at this week’s low of 2,709.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Prices are steady early today and hovering near a five-year high. Bulls still have the solid overall near-term technical advantage. Sell stops likely reside just below technical support at 13,867 and then at this week’s low of 13,810. Buy stops likely reside just above technical resistance at last week’s high of 13,960 and then at 14,000. 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-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are firmer early today on short covering in a bear market. Bears still have the solid
overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 143 10/32 and then at this week’s high of 143 28/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 142 21/32 and then at the contract low of 142 5/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are firmer early today but are hovering near a 4.5-month low. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 131.17.0 and then at this week’s high of 131.22.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.07.5 and then at 131.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The March U.S. dollar index is higher again early today, on more short covering. Greenback bears still have the overall near-term technical advantage. However, the bulls are having a good week this week. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 80.00 and then at 80.27. Shorter-term support is seen at the overnight low of 79.53 and then at 79.40. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

Crude oil prices are lower early today and hit a fresh two-week low. The bulls are fading just a bit. Bulls do still
have the overall near-term technical advantage as a two-month-old uptrend is in place on the daily bar chart. In March Nymex crude, look for buy stops to reside just above resistance at $96.00 and then at the overnight high of $96.70. Look for sell stops just below technical support at $95.00 and then at $94.31. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were lower mixed overnight. The key outside markets are in a bearish posture for the grains early today as the U.S. dollar index is higher and crude oil prices are lower. There is now also some better rainfall chances for dry Argentine soils, and that’s bearish for corn and soybeans. Grain traders are awaiting Friday morning’s USDA monthly supply and demand report.