* LATEST MARKET DEVELOPMENTS *

In overnight trading, Asian and European stock markets followed the U.S. stock market higher Wednesday, despite some more downbeat economic data from the European Union and China. The EU’s producer prices fell 0.1% in May from April, and were down 1.0% on the year. Reports overnight said land sales in China’s major cities declined by 29% in the second quarter. This downbeat data lends more weight to notions among many market watchers that China’s economy, the world’s second-largest, is wobbling at least a bit. The EU has seen a string of worrisome economic data that prompted the ECB to further ease its monetary policy last month.

U.S. economic data due for release Wednesday is significant and includes the weekly MBA mortgage applications survey, the Challenger job-cut report, the ADP national employment report, the ISM New York report on business, manufacturers’ shipments and inventories, and the weekly DOE liquid energy stocks report.

It’s a holiday-shortened trading week in the U.S., what with the Independence Day holiday on Friday. The key U.S. jobs report is issued a day early this month, on Thursday. This report is arguably the most important U.S. economic data of the month. The non-farm payroll employment figure is forecast to come in at up 215,000 in June.Also on Thursday will be the monthly monetary policy meeting of the European Central Bank. No changes in ECB monetary policy are expected. It will be an extra important trading day on Thursday.

The civil war in Iraq is still an issue for the market place but it has at least temporarily moved off the front burner. Ukraine said Thursday that its military has made progress against the pro-Russian rebels, amid heavy fighting. Don’t be surprised to see in the near future this matter move back into the spotlight of the market place and once again significantly impact some market prices.

Wyckoff’s Daily Risk Rating: 6.0 (Civil war in Iraq still has the world market place somewhat concerned.)

(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 September e-mini futures: Prices are slightly higher in early trading. Bulls have the solid overall near-term technical advantage as prices hover not far below Tuesday’s 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 Tuesday’s record high of 1,971.75 and then at 1,980.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 1,953.50 and then at this week’s low of 1,948.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly higher early today and trading near a 14-year high. Bulls have the solid overall near-term technical advantage. 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 to bullish early today. Shorter-term technical resistance is seen at Tuesday’s high of 3,895.00 and then at 3,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,875.00 and then at 3,860.00. 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. Bulls have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at Tuesday’s high of 16,915 and then at the record high of 16,960. Sell stops likely reside just below technical support at 16,850 and then at 16,800. Shorter-term moving averages are still bearish early today, as the 4-day moving average is below the 9-day and 18-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are slightly higher early today. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 136 20/32 and then at 137 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 136 6/32 and then at 136 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are near steady in early trading. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 125.00.0 and then at Tuesday’s high of 125.05.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.25.0 and then at 124.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The September U.S. dollar index is slightly higher in early trading, on a tepid short-covering bounce after hitting a six-week low Tuesday. Bears still have the overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 80.000 and then at this week’s high of 80.125. Shorter-term support is seen at the overnight low of 79.835 and then at this week’s low of 79.770. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

August Nymex crude oil prices are weaker in early U.S. trading, on more profit taking. Bulls still have the overall near-term technical advantage, but are now fading a bit. In August Nymex crude, look for buy stops to reside just above resistance at the overnight high of $105.50 and then at this week’s high of $106.09. Look for sell stops just below technical support at this week’s low of $104.60 and then at $104.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were narrowly mixed in overnight trading. Traders are still digesting Monday’s bearish USDA June acreage and supply and demand data. This week’s strong downside price action has the bears in firm technical command. Trading today and Thursday is critical. If grain futures prices can rebound well off their weekly lows by the close of the week on Thursday, it would be a clue that the markets have put in their lows. If grain futures prices close near their weekly lows on Thursday, it would suggest still more price pressure during the month of July. Although it’s now for many in the Corn Belt to imagine—what with the deluge of rainfall in many areas recently–July is the time period when dry and hot weather can start to enter the Corn Belt. But extended weather forecasts presently still see no excessively dry or hot weather on the horizon.