* LATEST MARKET DEVELOPMENTS *

With stock markets worldwide under selling pressure late this week, due to U.S. and European Union debt worries, U.S. President Obama is set to tell the public at midday Friday how he will address the so-called “fiscal cliff” debt problem. The market place will closely scrutinize the President’s remarks. With this week’s dour economic news coming out of the European Union, which suggests the bloc is on the brink of a serious recession, the German finance ministry chimed in on Friday and said that in the coming months Germany’s economy could “noticeably” weaken. This week has seen industrial production data coming out of the major EU countries, and all of that data showed significant industrial output contraction in those countries. Meantime, cash-starved Greece remains a major concern for EU officials. There is yet another EU official meeting Monday to address the situation in Greece and other financially troubled EU countries. Amid all of the above, the Euro currency slumped to another fresh two-month low against the
U.S. dollar on Friday. Tensions in the Middle East have ratcheted up a notch this week as the U.S. said Iranian war planes last week fired upon a U.S. drone in international air space. Saudi Arabia also warned Iran Friday that it will no longer tolerate Iranian war planes intruding into Saudi air space. U.S. economic data due for release Friday includes import and export price indexes, the University of Michigan consumer sentiment survey, and monthly wholesale trade inventories.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are lower early today and hit a fresh 13-week low overnight. Bears have 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,381.70 and then at 1,400.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,360.00 and then at 1,350.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0

Nasdaq index futures: Prices are slightly lower early today and hit a fresh 13-week low overnight. 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 bearish early today. Shorter-term technical resistance is located at the overnight high of 2,584.25 and then at 2,600.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,550.00 and then at 2,525.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

Dow futures: Prices are weaker early today and hit a fresh 13-week low overnight. Sell stops likely reside just below technical support at 12,700 and then at 12,650. Buy stops likely reside just above technical resistance at 12,775 and then at 12,800. 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 bearish early today. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are higher early today on more safe-haven buying and hit a 13-week high overnight. Bulls have the overall near-term technical advantage and have upside near-term momentum on their side. 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 high of 152 3/32 and then at 152 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 151 16/32 and then at the overnight low of 151 4/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5

December U.S. T-Notes: Prices are near higher early today and hit a fresh 3.5-month high overnight on safe-haven demand. The bulls maintain 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 134.08.0 and then at the July high of 134.18.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.24.0 and then at 133.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5

U.S. DOLLAR INDEX

The December U.S. dollar index is firmer in early U.S. trading today and is hovering near a two-month high. Bulls have good upside momentum on their side. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 81.11 and then at 81.25. Shorter-term support is seen at the overnight low of 80.68 and then at 80.50. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

Crude oil prices are weaker 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 $85.00 and then at $86.00. Look for sell stops just below technical support at this week’s low of $84.05 and then at $83.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed but mostly lower in overnight trading. The key “outside markets” are bearish for the grains today as the U.S. dollar index is higher and crude oil prices are weaker. Traders are awaiting this morning’s USDA monthly supply and demand report on the grains. It is my bias that the grain markets do not have strong downside price potential and are likely to work sideways to higher in to the end of the year. However, if crude oil prices continue to trend lower, any gains in the grains will be limited.