* Latest Market Developments *

OVERNIGHT DEVELOPMENTS

The market place is calmer to start the new trading week, after a weekend that saw no significant events to further stoke trader and investor worries. U.S. stock indexes have weakened a bit following very disappointing earnings from IBM that were just released. U.S. Treasury prices are modestly lower, to suggest just a bit more risk appetite is presently in the market place, at least for now.

Crude oil and the U.S. dollar index prices are near steady in early trading Monday. Crude oil is hovering near the two-year low scored last week, while the dollar index is not far below its recent four-year high. Traders and investors will continue to closely monitor these two key “outside markets,” which have a daily impact on many other markets.

In overnight news, reports said the central banks of Japan, China and the European Union have all began conducting some forms of monetary policy easing, albeit not aggressive moves. This comes at a time when the U.S. Federal Reserve is planning to wind down its own quantitative easing this month. There are growing notions the U.S. Fed may have to back-track on its quest to end its aggressive monetary policy stimulus. U.S. economic data released in the next few weeks will help determine which monetary policy path the Fed will take.

There is no major U.S. economic data due for release Monday.

Wyckoff’s Daily Risk Rating: 6.0 (The market place is less anxious Monday, after a weekend that saw no major, unsettling developments.)

(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, on short covering. 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 1,893.50 and then at 1,900.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,875.00 and then at 1,863.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are firmer in early trading. Short covering is featured. 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 seen at the overnight high of 3,830.50 and then at Friday’s high of 3,840.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,800.00 and then at 3,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are near steady in early U.S. trading. Buy stops likely reside just above technical resistance at Friday’s high of 16,340 and then at 16,400. Sell stops likely reside just below technical support at 16,250 and then at 16,200. Shorter-term moving averages are still 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: 5.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are weaker early today on profit taking from last week’s strong gains. 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 143 8/32 and then at 143 16/32. Buy stops likely reside just above those levels. Shorter-term technical support is seen at the overnight low of 142 14/32 and then at 142 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 December U.S. T-Notes: Prices are weaker in early trading, on profit taking from last week’s strong gains. Bulls still have the overall near-term technical advantage. 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 bearish early today. Shorter-term resistance lies at the overnight high of 127.26.0 and then at 128.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 127.12.5 and then at 127.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The December U.S. dollar index is slightly higher in early trading. Bulls 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 the overnight high of 85.470 and then at 85.530. Shorter-term support is seen at Friday’s low of 84.855 and then at this week’s low of 84.525. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

December Nymex crude oil prices are near steady early today as the market tries to stabilize after hitting a more-than-two-year low last week. Bears are still in firm overall near-term technical control. Look for buy stops to reside just above technical resistance at the overnight high of $82.73 and then at $83.00. Look for sell stops just below technical support at $81.00 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were lower in overnight trading. It was a good weekend for U.S. Corn Belt harvest progress in soybeans and corn. That’s a bearish factor to start the trading week. However, recent technical developments begin to suggest market bottoms are in place in grains. Grain markets will continue to be impacted by the outside markets, which have been volatile recently.