* Latest Market Developments *

The eyes of the market place remain on crude oil prices. After posting a strong rebound Monday, crude is under selling pressure again Tuesday morning. Nymex crude on Monday hit a five-year low of $63.72 a barrel. Gold prices on Tuesday morning have also given back much of Monday’s big gains. Volatility in crude oil and gold has been extremely high in recent sessions, much to the consternation of both bulls and bears. It is days like the past two sessions that brutalize traders with wild price swings that force them to liquidate their positions—only to see prices then turn around and move in the favor of their originally placed trades.

The U.S. dollar index is higher Tuesday. The greenback has seen some choppy and volatile trading the past few sessions but remains not far below its recent four-year high.

In other overnight news, the European Union producer price index was down 0.4% in October and down 1.3% year-on-year. This adds to a string of EU economic data that suggests deflationary price pressures are at work in the world’s third-largest economy. The report falls into the camp of those market watchers wanting the European Central Bank to further stimulate its monetary policy sooner rather than later. The ECB holds its regular monthly meeting on Thursday.

The Russian Economy Ministry said Tuesday the Russian economy will fall into recession in 2015, with inflation being problematic due to the slumping value of the ruble against the other major world currencies.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales report, the ISM New York report on business, construction spending, and domestic auto industry sales.

(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)

Wyckoff’s Daily Risk Rating: 6.0 (While geopolitical risks have been moved to the back burner of the market place, the plunging crude oil market has somewhat rattled the market place.)

(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 March e-mini futures: Prices are firmer in early trading. 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 Monday’s high of 2,057.00 and then at last week’s high of 2,068.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,041.25 and then at 2,027.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer in early trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 4,300.00 and then at 4,315.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 4,285.50 and then at 4,275.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

Dow futures: Prices are firmer in early U.S. trading. Buy stops likely reside just above technical resistance at last Friday’s record high of 17,875 and then at 17,900. Sell stops likely reside just below technical support at 17,755 and then at Monday’s low of 17,710. Shorter-term moving averages are still bullish early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are weaker early today on profit taking after hitting a six-week high Monday. Bulls still have the 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 142 even and then at 142 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 141 22/32 and then at 141 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 March U.S. T-Notes: Prices are weaker in early trading on profit taking. Bulls still have the 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 bearish early today. Shorter-term resistance lies at the overnight high of 126.26.5 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.22.5 and then at 126.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The March U.S. dollar index is higher in early trading and but hovering not far below the recent contract and four-year high. Bulls still have the solid overall near-term technical advantage. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at Monday’s high of 88.705 and then at the contract high of 88.800. Shorter-term support is seen at the overnight low of 88.210 and then at Monday’s low of 88.020. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

January Nymex crude oil prices are lower in early U.S. trading. Bears remain in strong overall near-term technical control. Look for buy stops to reside just above technical resistance at $69.00 and then at the overnight high of $69.32. Look for sell stops just below technical support at $67.00 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures markets were slightly lower in overnight trading. Wheat is the big upside mover early this week as prices hit four-month highs Monday. Wheat prices are in an uptrend. Soybeans and corn are working to re-establish price uptrends. The grain market bulls have faired surprisingly well in the face of the recent plunge in crude oil prices and the stronger U.S. dollar.