* LATEST MARKET DEVELOPMENTS *

The European Stoxx 600 index hit a five-year high overnight on ideas the European Central Bank could ease its monetary policy at Thursday’s meeting, and on upbeat economic data coming out of  China. The ECB could be compelled to try to boost the fragile economic recovery in the EU by lower interest rates—especially after EU data last week showed very low inflationary pressure in the bloc. Meantime, China’s official non-manufacturing purchasing managers index rose to a 14-month high of 56.3 in October. Germany’s better economic health lifted the collective number, as the periphery EU countries’ economies remain weak. The data firm Markit also on Monday reported the European Union’s PMI came in at 51.3 in October versus 51.1 in September. China’s Communist party meets this week, during which time major plans and reforms are unveiled by the leaders of the country. The world market place will be closely watching for any proclamations coming from that confab. Reports say slack demand for physical gold from India, during its Diwali festival season, is a bearish underlying fundamental factor for the metal. Indian government import restrictions and increased duties on gold imports have hurt consumer demand in that major gold-consuming nation. U.S. economic data due for release Monday includes the New York ISM report on business, manufacturers’ shipments and orders, and the global manufacturing PMI. There is a heavy slate of U.S. economic data due for release this week, including the key U.S. jobs report on Friday.–Jim Wyckoff
 
U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer in early U.S. trading. These bull market runs in the stock indexes are very mature, with the bullish notions becoming too pervasive. That’s a warning signal of a top being close at hand. The shorter-term moving averages (4-, 9- and 18-day) are still bullish early today. The 4-day moving average is above the 9- 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 1,764.00 and then at the record high of 1,773.10. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 1,747.50 and then at 1,734.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher early today. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at 3,394.00 and then at last week’s high of 3,401.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,366.75 and then at last week’s low of 3,357.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are higher early today. Buy stops likely reside just above technical resistance at last week’s record high of 15,660 and then at 15,700. Sell stops likely reside just below technical support at 15,585 and then at 15,500. 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: 5.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are firmer early today on short covering from selling pressure last week. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 134 even and then at 134 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 20/32 and then at 133 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

December U.S. T-Notes: Prices are firmer early today on some short covering and bargain hunting. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 127.00.0 and then at Friday’s high of 127.09.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.21.5 and then at 126.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The December U.S. dollar index is weaker early today on profit taking after hitting a fresh six-week high early on. While bears remain in overall near-term technical control, the bulls are making a strong move, to suggest a market low is in place. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.020 and then at 81.250. Shorter-term support is seen at 80.500 and then at Friday’s low of 80.320. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

December Nymex crude oil prices are lower early today and hit another fresh four-month low overnight. Bears have the overall near-term technical advantage. Prices are in a nine-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 $95.50. Look for sell stops just below technical support at $94.00 and then at $93.50. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were narrowly mixed overnight. Bulls and bears are weighing conflicting factors to start the new trading week: the still-bearish specter of the U.S. corn and soybean harvest and the related hedge selling, and the better export demand for U.S. grains seen recently. Traders will focus on USDA data this week, including Monday evening’s crop progress report and Friday’s latest monthly supply and demand report. Technically, the corn bears are still in firm command, while soybeans are technically neutral on a near-term basis and wheat bears have the near-term technical advantage.