* Latest Market Developments *

While there are still geopolitical hotspots in the world that the market place is monitoring, traders this week appear to have a bit more risk appetite. However, trading volumes have been light in many markets, with many focused on late-summer vacations and other outdoor activities. However, any flare-up will likely jolt traders and investors back into a keener risk-averse posture. I suspect geopolitics will be back on the front burner of the market place sooner rather than later.

In overnight news, European Union industrial production fell 0.3% in June versus May and was unchanged year-on-year. A monthly rise of 0.3% was expected. The EU’s second-quarter GDP estimate is due for release Thursday, and is expected to show a paltry growth rate of 0.1%. Recent EU economic data has been downbeat, to suggest the bloc is teetering on recession again.

Meantime, China’s industrial production was up 9% in July, year-on-year, versus up 9.2% in June. China’s July retail sales were up 12.4% from June and up 12.2% year-on-year. Despite being good numbers, they were both below market expectations.

U.S. economic data due for release Wednesday includes the MBA mortgage applications survey, retail sales, manufacturing and trade inventories, and the weekly DOE liquid energy stocks report.

Wyckoff’s Daily Risk Rating: 6.0 (The market place this week is less focused on the still-simmering geopolitical matters: the Russia-Ukraine crisis, Iraq and the Gaza strip.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

–Jim Wyckoff

U.S. STOCK INDEXES

S&P 500 September e-mini futures: Prices are firmer in early trading as bulls are making a good recovery after prices hit a 2.5-month low last week. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 1,941.00 and then at 1,950.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,930.75 and then at this week’s low of 1,923.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are higher in early trading today as bulls are recovering after prices hit a six-week low last week. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 3,935.00 and then at 3,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,910.00 and then at 3,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Dow futures: Prices are higher in early U.S. trading, on short covering after hitting a 3.5-month low last week. Buy stops likely reside just above technical resistance at 16,600 and then at 16,650. Sell stops likely reside just below technical support at 16,500 and then at Tuesday’s low of 16,470. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are weaker early today and seeing more profit taking from recent gains that saw prices hit a contract high last week. Bulls still have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 139 even and then at 139 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 138 16/32 and then at 138 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 September U.S. T-Notes: Prices are weaker in early trading, on mild profit taking after hitting a contract high last week. Bulls still 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 125.25.5 and then at 126.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.18.0 and then at 125.12.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The September U.S. dollar index is higher in early trading. Prices are hovering near last week’s nine-month high. Bulls have the firm overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at last week’s high of 81.775 and then at 82.000. Shorter-term support is seen at the overnight low of 81.530 and then at this week’s low of 81.465 Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

September Nymex crude oil prices are slightly weaker in early U.S. trading. Bears have the overall near-term technical advantage as prices are in a seven-week-old downtrend on the daily bar chart. In September Nymex crude, look for buy stops to reside just above resistance at the overnight high of $97.48 and then at $98.00. Look for sell stops just below technical support at this week’s low of $96.81 and then at last week’s low of $96.55. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were firmer in overnight trading, on tepid short covering. Bears are in full technical command of the grains. After Tuesday’s USDA supply and demand and crop production reports confirmed record U.S. corn and soybean crops, focus of traders will now be on harvesting those crops and on worldwide demand.