* LATEST MARKET DEVELOPMENTS *

There is a bit more of a “risk-on” trader and investor mentality in the market place to start the new trading week Monday. European and Asian stock markets were higher and the Euro currency also rallied on notions the Obama administration and the U.S. congress are moving closer to a deal to avoid the “fiscal cliff” implementation of tax increases and spending cuts that would be implemented in January, should no agreement be reached. The better investor risk appetite comes despite still-high tensions in the Middle East. Israel is taking a very hard line against Hamas, including heavy air strikes in the Gaza Strip over the weekend and the possibility of moving ground troops into Gaza. Such could agitate Egypt and further inflame Iran. The situation could escalate quickly, which would in turn likely produce significant safe-haven demand for gold. Recent history shows that the gold market tends to lag when potentially destabilizing geopolitical events occur, but when those events then escalate a bit, gold then kicks into a higher safe-haven demand gear and rallies. There were reports Monday that there may be negotiations occurring between Israel and Egypt on de-escalating the present situation. There is a meeting of Euro zone officials Tuesday on when to disburse the next tranche of bailout money to cash-starved Greece, and on what terms Greece will be held in order to receive the money. If EU officials write off Greek debt, then other financially troubled EU countries would likely want the same. German officials Monday reiterated opposition to any Greek debt write-down. The overall European Union sovereign debt crisis remains a major uncertainty and major worry in the market place.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today on short covering. Bears still have the overall near-term technical advantage. 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 bearish early today. Today, shorter-term technical resistance comes in at 1,375.00 and then at 1,386.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,360.40 and then at 1,350.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early today on short covering in a bear market. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at 2,560.00 and then at 2,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,534.50 and then at 2,525.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

Dow futures: Prices are firmer early today on short covering in a bear market. Sell stops likely reside just below technical support at 12,600 and then at 12,570. Buy stops likely reside just above technical resistance at 12,650 and then at 12,700. 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 neutral to bullish 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 are seeing some profit taking after hitting a 3.5-month high on Friday. 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 151 31/32 and then at Friday’s high of 152 21/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 151 14/32 and then at 151 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

December U.S. T-Notes: Prices are weaker early today on profit taking. The bulls still maintain 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 134.04.5 and then at Friday’s high of 134.11.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.27.5 and then at last week’s low of 133.22.0. 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 lower in early U.S. trading today, on some profit taking. Bulls still have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.28 and then at last week’s high of 81.51. Shorter-term support is seen at the overnight low of 81.03 and then at last week’s low of 80.94. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are higher early today on the Middle East tensions. Bears still have the overall near-term technical advantage as a two-month-old downtrend is in place on the daily bar chart. In January Nymex crude, look for buy stops to reside just above resistance at $89.00 and then at $90.00. Look for sell stops just below technical support at $87.00 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

Markets were higher in overnight trading on some short covering and bargain hunting. The key “outside markets” are in a bullish posture for the grains today as the U.S. dollar index is weaker and crude oil prices are lower. Near-term chart damage has been inflicted in soybean, corn and wheat futures recently.