* LATEST MARKET DEVELOPMENTS *

In overnight news, China issued a fresh batch of much-anticipated economic data Friday. China’s trade surplus came in higher than expected, at $29.2 billion in January. Forecasts were for a $26.5 billion surplus. December’s surplus was $31.6 billion. That report further supported notions the Chinese economy is on the rebound. Also reported Friday were China’s inflation data. The consumer price index was up 2% in January, from a year earlier, and down from the 2.5% annual rise seen in December. The robust trade data and tame inflation numbers are a positive for the world market place because they suggest China is on the upswing and also will not have to tighten monetary policy to keep inflation in check. Next week, China will be on holiday for the Lunar New Year. The European Union debt crisis front has remained fairly quiet for a few months. However, economic and financial problems in the EU are still serious. Economic
data for Italy, released Friday, was downbeat. Italian industrial output during all of 2012 fell to its lowest level in many years. Italy is the third-largest economy in the EU. Italian and Spanish bond yields are starting to creep higher again, which is an early clue that the EU debt crisis could be back on the front burner of the market place at some point in the not too distant future. Such would be a significantly bullish factor for the safe-have asset gold.U.S. economic data due for release Friday includes the U.S. trade in goods and services report, and monthly wholesale trade.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady in early trading today and hovering near a five-year high. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 1,510.90 and then at 1,520.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,500.00 and then at this week’s low of 1,490.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly higher early today. Bulls still have the overall near-term technical advantage amid recent choppy trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at 2,750.00 and then at this week’s high of 2,759.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,725.00 and then at this week’s low of 2,709.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

Dow futures: Prices are near steady early today and hovering near a five-year high. Bulls still have the solid overall near-term technical advantage. Sell stops likely reside just below technical support at 13,850 and then at Thursday’s low of 13,805. Buy stops likely reside just above technical resistance at last week’s high of 13,960 and then at 14,000. 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 to bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are slightly higher early today on tepid short covering in a bear market. Bears still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 144 6/32 and then at last week’s high of 144 13/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 143 17/32 and then at 143 2/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are firmer early today on short covering. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 131.29.5 and then at 132.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.20.5 and then at 131.12.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is lower early today on a corrective pullback from this week’s good gains. Greenback bears still have the overall near-term technical advantage. However, the bulls are gaining some upside momentum. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 80.34 and then at 80.50. Shorter-term support is seen at 80.00 and then at 79.75. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

Crude oil prices are firmer early today. Bulls still have the overall near-term technical advantage as a two-month-old uptrend is in place on the daily bar chart. In March Nymex crude, look for buy stops to reside just above resistance at $97.00 and then at $97.50. Look for sell stops just below technical support at the overnight low of $95.70 and then at $95.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were narrowly mixed overnight. Grain traders are anxiously awaiting this morning’s USDA monthly supply and demand report for better direction. Look for more volatile trade today after the USDA data. Bulls have faded this week as the seasonal “February Break” phenomenon may be at hand for the grain markets.