* Latest Market Developments *

Focus is on the currency markets this week, where the U.S. dollar index has hit a 14-month high, while the Euro currency has slumped to a 14-month low. Diverging economies and monetary policies in the U.S. and the European Union are prompting their currencies to trend in opposite directions. Meantime, the British pound has sold off sharply this week and hit a 10-month low, ahead of a referendum next week to determine Scotland’s independence from the United Kingdom.

The strong U.S. dollar has been a bearish outside market force working against most of the raw commodity sector recently. The deflating Euro currency has also been a negative for raw commodities, due to the concerns in the EU regarding the potential for sustained deflationary consumer and producer price pressures. An examination of the Goldman Sachs Commodity Index (GSCI) chart shows just how sickly is the raw commodity market sector.

On the geopolitical front there have been no major, markets- moving developments the past several days. The Russia- Ukraine cease-fire appears to be generally holding. New sanctions against Russia are set to be implemented by the European Union this week—mostly eliminating the ability of Russian businesses to raise capital in Europe.

Recent reports have said consumer demand for physical gold has been light compared to historical standards, especially from major gold consumer India. India’s Diwali festival is upcoming and demand for gold bullion from India rises.

U.S. economic data due for release Tuesday is again light and includes the NFIB small business index, and weekly Johnson Redbook and Goldman Sachs retail sales reports.

Wyckoff’s Daily Risk Rating: 6.0 (The market place is now less focused on the tensions between Russia and Ukraine, and on other world hot spots. But it’s my bias this condition will not last and that geopolitics will have a bigger influence on markets in the coming weeks.)

(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 slightly higher in early trading and hovering not far below the recent contract and record high. 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 the record high of 2,002.75 and then at 2,015.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 1,980.50 and then at 1,970.00. 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 today. Bulls are still in technical command as prices hover near the recent 14-year high. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at last week’s high of 4,105.50 and then at 4,115.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 4,091.25 and then at Monday’s low of 4,077.00. Sell stops are likely located just below those levels. Wyckoff’s Intra- Day Market Rating: 5.5

Dow futures: Prices are slightly higher in early U.S. trading. Buy stops likely reside just above technical resistance at the record high of 17,150 and then at 17,200. Sell stops likely reside just below technical support at Monday’s low of 17,075 and then at 17,050. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-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 lower early today and hit a four-week low overnight. Bulls have faded still have the overall near-term technical advantage. 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 137 31/32 and then at 138 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 137 16/32 even and then at 137 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

December U.S. T-Notes: Prices are lower in early trading and hit a four-week low overnight. Bulls have the overall near-term technical advantage. 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 124.29.0 and then at 125.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the
overnight low of 124.19.0 and then at 124.16.0. 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 firmer in early trading and hit another contract and 14-month high overnight. Bulls have the solid 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 overnight contract high of 84.650 and then at 85.000. Shorter-term support is seen at the overnight low of 84.415 and then at 84.250. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

October Nymex crude oil prices are higher in early U.S. trading, on short covering in a bear market. Bears have the firm overall near-term technical advantage as prices are in a 10-week-old downtrend on the daily bar chart. Look for buy stops to reside just above resistance at $94.00 and then at $94.50. Look for sell stops just below technical support at $93.00 and then at the overnight low of $92.75. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

Markets were mixed but mostly lower in overnight trading. The surging U.S. dollar index is a bearish “outside market” force working against the grains recently. Grain market bears are still in full technical command. Prices are near their contract lows. There is a likely frost event that will occur in the northern Corn Belt later this week, which could be market-sensitive. Also, the monthly USDA supply and demand report is out Thursday, which is expected to show a record-large U.S. corn and soybean crop grown this year.