* LATEST MARKET DEVELOPMENTS *
In overnight news, the market place is just a bit more at ease Wednesday. The Euro currency made modest gains against the U.S. dollar, suggesting at least the European Union sovereign debt crisis did not worsen the past 24 hours. However, there was more dour economic news coming out of the EU, which suggested the bloc is headed for, or already in, economic recession. Overall industrial production in the EU countries fell 2.5% in September, it was reported Wednesday. There is key economic data coming out of the EU on Thursday, as gross domestic product data is released by the major EU countries. If recent history repeats itself Greece will soon be back on the front burner of the market place, regarding fresh EU bailout money and the debating about when and if to disburse fresh funds to the cash-starved country. There was a German newspaper report Tuesday that suggested the EU might soon shell out one big lump sum of cash to Greece, to the tune of $56 billion. That did somewhat buoy European markets. Many doubt that plan will actually occur, however. Spanish and Italian bond yields did back off a bit Wednesday, which is also a clue of anxiety levels in the market place that are not rising. A European Central Bank official once again stressed Wednesday that ECB monetary policy cannot solve the economic structural problems facing the EU. Such can also be said about monetary policy being able to solve the U.S.’s economic structural problems. In the U.S., traders and investors will closely monitor Wednesday afternoon’s release of the minutes of the last meeting of the Federal Reserve’s Open Market Committee (FOMC). The ongoing “fiscal cliff” rhetoric between the Democrats and Republicans will continue to be closely monitored by the market place. U.S. economic data due for release Wednesday includes the FOMC minutes, weekly MBA mortgage applications survey, the Producer Price Index, retail sales, and manufacturing and trade inventories.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early today on short covering. Bears still have some downside momentum. The shorter-term moving averages (4-, 9- and 18-day) are 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 1,381.70 and then at 1,388.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 1,363.70 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. The shorter-term moving averages (4- 9-and 18-day) are 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 neutral to bullish
early today. Shorter-term technical resistance is located at the overnight high of 2,585.75 and then at this week’s high of 2,597.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 2,553.00 and then at 2,540.00. 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. Sell stops likely reside just below technical support at Tuesday’s low of 12,700 and then at 12,650. Buy stops likely reside just above technical resistance at 12,800 and then at Tuesday’s high of 12,855. 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 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 from recent 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 152 3/32 and then at Tuesday’s high of 152 15/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 151 10/32 and then at 151 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 early today on profit taking. The bulls still maintain 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 134.00.5 and then at last week’s high of 134.06.5. Buy stops likely reside
just above those levels. Shorter-term technical support lies at the overnight low of 133.22.0 and then at 133.13.0. 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 near steady in early U.S. trading today and hovering near a two-month high. Bulls still have upside near-term momentum on their side. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Tuesday’s high of 81.32 and then at 81.50. Shorter-term support is seen at the overnight low of 80.99 and then at 80.68. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are near steady early today. Bears still have the overall near-term technical advantage as a two-month-old downtrend is in place on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at the overnight high of $86.00 and then at $87.00. Look for sell stops just below technical support at $85.00 and then at this week’s low of $84.57. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were higher in overnight trading, on more short covering following recent selling pressure. The grain market bears have downside momentum. Fresh near-term chart damage has been inflicted in soybean, corn and now wheat futures. My bias is that there is not strong selling pressure left in the grain markets at present price levels.
