* LATEST MARKET DEVELOPMENTS *

In overnight news, Chinese leaders at their annual Communist party meeting pledged to enact fiscal and land reforms, ease controls on investment and become more market-oriented,reports overnight said.

The Organization for Economic Cooperation and Development (OECD) reported Tuesday that the economies of the European Union, China and the U.K. will see better economic growth in the coming year. However, India, Brazil and Russia are likely to see weaker economic growth in the coming year. The OECD said little change in the rate of economic growth is expected in the U.S. and Japan.

The U.S. dollar is firmer Tuesday, seeing support the past week on ideas the U.S. Federal Reserve will begin to back off on its easing of monetary policy in the not-too-distant future. Some in the market place now expect the Fed to begin “tapering” its monthly bond-buying program (quantitative easing) as early as December. The greenback is also supported by last week’s surprise move by the European Central Bank to lower its main interest rate to a record-low 0.25%.

There continue to be reports of weak demand for physical gold coming from Asian countries, which remains an underlying bearish fundamental factor for the gold market.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, the Chicago Fed national activity index, and the employment trends index.

Monday’s Wyckoff’s Daily Risk Rating: 5.0 (No major developments overnight and no major economic reports out Tuesday.)

(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).–Jim Wyckoff
 
U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly lower in early U.S. trading, on profit taking. 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 last week’s record high of 1,774.20 and then at 1,785.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,750.00 and then at last week’s low of 1,736.30. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are slightly lower early today, on profit taking. The shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the overnight high of 3,358.00 and then at 3,387.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,344.25 and then at 3,325.00. 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. Buy stops likely reside just above technical resistance at last week’s record high of 15,745 and then at 15,800. Sell stops likely reside just below technical support at Monday’s low of 15,688 and then at 15,650. 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

December U.S. T-Bonds: Prices are weaker early today and hit another fresh two-month low overnight. Bears have downside technical momentum. 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 bearish early today. Shorter-term resistance lies at the overnight high of 131 16/32 and then at Monday’s high of 131 24/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131 4/32 and then at 131 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
 
December U.S. T-Notes: Prices are weaker early today and hit a fresh four-week low overnight. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 126.03.0 and then at Monday’s high of 126.08.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.23.0 and then at 125.16.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The December U.S. dollar index is higher early today and hovering near the recent two-month high. Bulls have upside momentum. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at last week’s high of 81.580 and then at 81.750. Shorter-term support is seen at the overnight low of 81.175 and then at 81.000. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

December Nymex crude oil prices are weaker early today and hovering not far above last week’s four-month low. Bears have the overall near-term technical advantage. Prices are in a 10-week-old downtrend on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at $95.00 and then at last week’s high of $95.40. Look for sell stops just below technical support at the overnight low of $94.31 and then at $94.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were firmer. Corn and soybean bulls are gaining upside technical momentum. The upside price action in corn and soybeans hints that seasonal harvest lows are in place. Wheat is still technically bearish but will be a follower for at least the near term. With the U.S. corn and soybean harvest winding down, focus of grain market traders now turns from U.S. production to overall worldwide demand for grains, and on the upcoming South American planting and growing season.