* Latest Market Developments *

OVERNIGHT DEVELOPMENTS

The economic report pace picks up steam starting Wednesday, with the highlight of the week being Friday’s U.S. employment report. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, construction spending, the ISM manufacturing report on business, the global manufacturing purchasing managers index, the weekly DOE liquid energy stock report, and domestic auto industry sales.

In overnight news, a German government 10-year bond auction fetched a record low yield of 0.93% Wednesday, in another signal of low confidence in the recovery of the European Union’s economy and worries about deflationary price pressures in the EU. There was another downbeat economic report coming out of the EU Wednesday, as the September manufacturing PMI came in at 50.3 versus expectations for a reading of 50.5, and a figure of 50.7 in August. The European Central Bank meets for its monthly monetary policy meeting on Thursday, but no major policy moves are expected yet, after the ECB just recently moved to ease monetary policy.

The U.S. dollar hit another six-year high against the Japanese Yen and hit a 22-month high against the Euro Tuesday. The appreciation of the greenback has been a major theme in the market place in recent weeks, including being credited for the big sell off in crude oil prices Tuesday and the recent down-slide in gold and silver prices.

The so far non-violent pro-democracy demonstrations occurring in Hong Kong have for now moved off the front burner of the market place. However, any escalation or violence in the Hong Kong protesting could quickly see keen risk aversion enter the market place. China is celebrating a week-long national holiday this week.

Wyckoff’s Daily Risk Rating: 6.0 (The pro-democracy protesting in Hong Kong has moved to the back burner of 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 December e-mini futures: Prices are near steady in early trading. Bulls have faded a bit recently. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,967.00 and then at this week’s high of 1,978.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,955.50 and then at 1,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are weaker in early trading today. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-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 seen at the 4,050.00 and then at this week’s high of 4,066.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 4,025.00 and then at this week’s low of 3,999.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Prices are slightly lower in early U.S. trading. Bulls have the overall near-term technical advantage but have faded a bit recently. Buy stops likely reside just above technical resistance at 17,000 and then at Tuesday’s high of 17,060. Sell stops likely reside just below technical support at 16,900 and then at 16,850. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-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: 4.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are higher early today. Bulls 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 bullish early today. Shorter-term resistance lies at this week’s high of 138 19/32 and then at 139 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 138 even and then at the overnight low of 137 27/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 December U.S. T-Notes: Prices are higher in early trading and hit a three-week high overnight. 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 bullish early today. Shorter-term resistance lies at 125.00.0 and then at 125.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.22.0 and then at Tuesday’s low of 124.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The December U.S. dollar index is higher in early trading and is hovering near this week’s contract and four-year high. Bulls have the strong overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the contract high of 86.335 and then at 86.500. Shorter-term support is seen at 86.000 and then at Tuesday’s low of 85.620. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

November Nymex crude oil prices are firmer early today and seeing a corrective bounce from the big losses suffered Tuesday. Bears are back in control, to suggest still more downside price pressure to come in the near term. Look for buy stops to reside just above technical resistance at $92.00 and then at $92.50. Look for sell stops just below technical support at Tuesday’s low of $90.86 and then at $90.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were mostly weaker in overnight trading. Tuesday’s USDA quarterly grain stocks report was mostly bearish, as expected. Combines were rolling in the Corn Belt early this week, but steady rains have halted harvest work in much of the Corn Belt. Markets are near their recent contract lows and bears remain in full technical command. Besides record corn and soybean crops and a world awash in wheat, the very weak raw commodity sector, overall, is a major bearish weight on the grains, too.