*OVERNIGHT DEVELOPMENTS*

Traders are still digesting the dovish Federal Reserve Open Market Committee (FOMC) minutes released Wednesday afternoon. The Fed expressed increasing concern about weakening world economies and some FOMC members questioned whether the appreciation of the U.S. dollar against the other major currencies might act as a drag on the U.S. economy. The U.S. dollar index sold off, while the Euro currency, gold and U.S. Treasuries and stock indexes rallied in the aftermath of the FOMC minutes. The market place reckons the FOMC minutes hint the Fed may have to hold off longer on raising U.S. interest rates, given the increasing concerns about weakening world economies—especially the serious weakness coming out of the European Union.

European stocks and bonds, and the Euro currency, rallied overnight, in the aftermath of the FOMC minutes and the U.S. stock market rally Wednesday afternoon. Gold also continued to rally overnight, while U.S. stock indexes were slightly higher in early electronic trading. The U.S. dollar index continued under selling pressure Thursday morning.

A key question that will likely be answered in the coming days will be if the FOMC minutes were enough of a market place “game-changer” to reverse the fledgling price downtrends in the U.S. stock indexes.

Ironically, European stocks rallied despite recent dour economic data coming out of the EU. The rally in world stock markets following the downbeat FOMC assessment of the world economies underscores how traders and investors have become addicted to the easy-money policies of the world’s central banks. This is not a good thing, and many market watchers think the eventual outcome of central banks “printing money” will prove to have been significantly harmful or even disastrous to most economies.

U.S. economic data due for release Thursday includes the weekly jobless claims report and ICSC chain store trends.

Wyckoff’s Daily Risk Rating: 6.0 (The market place this week is paying little attention to world geopolitical hotspots, and is instead focusing more on the Ebola disease that is spreading.)

(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, following Wednesday’s solid gains. A bullish double-bottom reversal pattern has formed on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are still 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,968.50 and then at the October high of 1,971.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,950.00 and then at 1,935.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly higher in early trading today, following sharp gains Wednesday. A bullish double-bottom reversal pattern has formed on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are still 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 to bullish early today. Shorter-term technical resistance is seen at the overnight high of 4,047.00 and then at 4,066.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 4,020.00 and then at 4,000.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

Dow futures: Prices are weaker in early U.S. trading, on a corrective pullback from big gains Wednesday. A bullish double-bottom reversal pattern has formed on the daily bar chart. Buy stops likely reside just above technical resistance at Wednesday’s high of 16,925 and then at 17,000. Sell stops likely reside just below technical support at 16,850 and then at 16,800. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bullish 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 and hit another contract high overnight. Bulls have the solid overall near-term technical advantage amid safe-haven buying interest. 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 the overnight contract high of 141 13/32 and then at 142 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 140 18/32 and then at 140 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0 December U.S. T-Notes: Prices are near higher in early trading and hit a contract high overnight. Bulls have the solid overall near-term technical advantage, amid safe-haven demand. 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 the overnight contract high of 126.27.5 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.16.0 and then at the overnight low of 126.11.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0

U.S. DOLLAR INDEX

The December U.S. dollar index is lower and hit a two-week low in early trading. Bulls are fading this week. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 85.470 and then at 85.750. Shorter-term support is seen at 85.000 and then at 84.750. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

November Nymex crude oil prices are slightly lower early today and hovering near Wednesday’s 15-month low. Bears re in firm overall near-term technical control. Look for buy stops to reside just above technical resistance at $88.00 and then at Wednesday’s high of $88.63. Look for sell stops just below technical support at Wednesday’s low of $86.83 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed in overnight trading. The bulls this week have shown some decent strength, but have more work to do in the near term to suggest market bottoms are in place. The weakening U.S. dollar this week has been a bullish factor for the grains. Recent rains have halted harvest work in some of the Corn Belt and that’s also a bit friendly. Focus is starting to shift to the growing season for corn and soybeans in South America. Dry weather in some parts of South American soybean regions is also a modestly bullish development. Traders are awaiting Friday’s latest USDA supply and demand report.