* Latest Market Developments *

In overnight news, reports said Russia has retaliated against the West’s sanctions by imposing its own: banning imports of many food items from the West. The Russia-Ukraine territorial crisis and the sanctions imposed have caused renewed geopolitical uncertainty this week, which has helped to pressure world stock markets. Gold posted solid gains and U.S. Treasury bond futures hit a contract high Wednesday. Meantime, the U.S. dollar index Wednesday hit a nine-month high. These markets were supported on safe-haven demand amid the heightened geopolitical concerns this week.

There is a European Central Bank monetary policy meeting Thursday, including a press conference from ECB president Mario Draghi. The ECB is not expected to make any major policy moves. However, as usual, the market place wants to hear Draghi’s comments, which may provide clues on futures ECB action.

The sell-offs in the U.S. stock indexes recently are the strongest technical evidence yet that the indexes have put in at least near-term market tops. How the stock indexes close on Friday—near their weekly highs or near their weekly lows—will provide more technical evidence on whether that major bull run in the U.S. stock market has finally come to an end.

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

Wyckoff’s Daily Risk Rating: 6.0 (The market place is today somewhat focused on the still-simmering geopolitical matters, namely the Russia-Ukraine crisis.)

(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, on short covering. Bulls have faded recently to suggest a major market top is in place. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 1,921.75 and then at this week’s high of 1,933.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,913.50 and then at this week’s low of 1,903.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer in early trading today. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Wednesday’s high of 3,889.50 and then at 3,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,860.00 and then at this week’s low of 3,846.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

Dow futures: Prices are firmer in early U.S. trading, on short covering. Bulls have faded to suggest a major market top is in place. Buy stops likely reside just above technical resistance at 16,450 and then at 16,475. Sell stops likely reside just below technical support at 16,400 and then at 16,350. Shorter-term moving averages are 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 early today. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are higher early today and hovering near this week’s contract high. Safe-haven buying is featured this week. Bulls have the solid 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 bullish early today. Shorter-term resistance lies at the overnight contract high of 138 31/32 and then at the contract high of 139 8/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 138 15/32 and then at 138 6/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 September U.S. T-Notes: Prices are higher and hovering near a nine-week high in early trading. Bulls have the solid 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 125.24.5 and then at the contract high of 126.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.16.5 and then at 125.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5

U.S. DOLLAR INDEX

The September U.S. dollar index is slightly higher in early trading. Prices are hovering near a nine-month high. Bulls still have good upside momentum on safe-haven demand. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.605 and then at this week’s high of 81.775. Shorter-term support is seen at the overnight low of 81.450 and then at this week’s low of 81.360 Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

September Nymex crude oil prices are weaker in early U.S. trading and hit another three-month low overnight. Bears have the overall near-term technical advantage as prices are in a six-week-old downtrend on the daily bar chart. In September Nymex crude, look for buy stops to reside just above resistance at the overnight high of $97.16 and then at $97.50. Look for sell stops just below technical support at the overnight low of $96.55 and then at $96.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were steady to weaker in overnight trading. There were soaking rains over some previously dry pockets of the U.S. Corn Belt the past 24 hours, which is more bearish news for the corn and soybean markets. And weather forecasts are still non-threatening to the corn and soybean crops. This has allowed for what will likely be record corn and soybean yields in the U.S. However, the wheat futures markets are a different story. Prices hit multi-week highs Wednesday and there are now clues the wheat market has bottomed out. Traders will closely examine Thursday morning’s weekly USDA export sales report.