* LATEST MARKET DEVELOPMENTS *
In overnight news, European stocks and the Euro currency treaded water. European Central Bank officials said Friday that strains on the EU banking system have eased in recent months, but said more work needs to be done in the coming months. The ECB also said it sees inflation in the EU declining for the next two years. Meantime, business activity in the EU in December fell to its lowest level in nine months. Still, the data company Markit said Euro zone economic activity has bottomed out and is on the upswing. However, the overall Euro zone economy remains in recession. In Asia overnight, stock markets were higher head of major Japanese elections this weekend. The HSBC China preliminary purchasing managers index for December rose to 50.9 from 50.5 in November. That reading is a 14-month high, and further bolsters notions China’s economy is picking up steam. In the U.S., attention of the market place remains on the U.S. “fiscal cliff” tax increases and spending cuts that is fast approaching. President Obama and House Speaker Boehner met Thursday afternoon to talk about the matter, but no agreement resulted. The market place reckons odds are a bit higher than not that there will be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff. However, the lack of progress between the Obama administration and Congress as the year winds down is making traders very skittish. 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 firmer in early trading today. Prices are still in a four-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 Thursday’s high of 1,425.30 and then at this week’s high of 1,433.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,410.00 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: 5.5
Nasdaq index futures: Prices are slightly higher early today. 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 to bearish early today. Shorter-term technical resistance is located at the overnight high of 2,658.25 and then at 2,675.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 2,637.75 and then at this week’s low of 2,644.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
Dow futures: Prices are firmer early today. Prices are still in a four-week-old uptrend. Sell stops likely reside just below technical support at 13,094 and then at 13,050. Buy stops likely reside just above technical resistance at Thursday’s high of 13,170 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-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are near steady early today. Bulls are fading and need to show fresh power soon. 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 bearish early today. Shorter-term resistance lies at the overnight high of 148 even and then at Thursday’s high of 148 10/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 147 15/32 and then at this week’s low of 147 9/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are weaker early today and hit a fresh five-week low overnight. Bulls are fading and need to show fresh power soon. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 133.00.0 and then at Thursday’s high of 133.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.17.0 and then at 132.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The March U.S. dollar index is near steady in early U.S. trading today. Bulls have faded recently. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 80.23 and then at 80.50. Shorter-term support is seen at the overnight low of 79.82 and then at 79.78. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are firmer early today on short covering. Bears still have the slight overall near-term technical advantage. In January Nymex crude, look for buy stops to reside just above resistance at this week’s high of $87.68 and then at $88.00. Look for sell stops just below technical support at the overnight low of $86.07 and then at this week’s low of $85.21. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were higher in overnight trading, on short covering from recent selling pressure. The grain market bulls faded this week, with wheat bears gaining downside technical momentum. The wheat market’s price action this week is worrisome for the entire grain futures complex. If wheat prices continue to erode, there is likely to be spillover selling pressure enter the corn and soybean markets and at least limit their upside potential. All grain traders need to keep a closer eye on the wheat market in the near term.
