* LATEST MARKET DEVELOPMENTS *
In overnight news, the feature was the German ZEW economic expectations index rising to a much higher-than-expected reading of 6.9 in December versus November’s minus 15.7. The report boosted European stocks and the Euro currency, while Spanish and Italian bond yields fell. The market place is awaiting the outcome of the Federal Reserve FOMC meeting, which begins Tuesday and ends Wednesday afternoon. The “Operation Twist” program is ending and the FOMC members will decide whether to extend a bond-buying program. Many believe the Fed will announce it will continue to purchase longer-term U.S. Treasuries, while stopping its sales of shorter-term government debt, as was the case in the Twist operations. The new plan would be ostensibly printing of greenbacks by the Fed and would be raw-commodity market bullish, including bullish for gold and silver markets. Also in the U.S., attention of the market place remains on the “fiscal cliff” tax increases and spending cuts that is fast approaching. There is still no apparent movement from either side on the matter. The market place presently perceives odds are a bit higher than not that there will be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff. Still, the overall situation continues to be a bearish drag on many markets, including the raw commodities and stock markets. U.S. economic reports due for release Tuesday include the NFIB small business optimism index, weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. trade deficit report, monthly wholesale trade and the IBD/TIPP economic optimism index.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer and hit a fresh four-week high overnight. Bulls have near-term momentum on their side. Prices are in a three-week-old uptrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the November high of 1,431.40 and then at 1,440.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,415.40 and then at last week’s low of 1,397.00. 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. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at 2,673.25 and then at 2,685.00. Buy stops likely reside just above those
levels. On the downside, short-term support is seen at the overnight low of 2,644.25 and then at last week’s low of 2,622.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
Dow futures: Prices are firmer and hit a fresh four-week high overnight. Prices are in a three-week-old uptrend as bulls have near-term momentum. Sell stops likely reside just below technical support at 13,187 and then at 13,150. Buy stops likely reside just above technical resistance at the November high of 13,225 and then at 13,250. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is above 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
March U.S. T-Bonds: Prices are lower early today. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 149 27/32 and then at 150 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 149 7/32 and then at 149 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower early today on profit taking. Bull stills have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 133.22.0 and then at Monday’s high of 133.26.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.12.5 and then at 133.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is lower in early U.S. trading today. Bulls are quickly fading again. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.50 and then at Monday’s high of 80.75. Shorter-term support is seen at 80.00 and then at last week’s low of 79.78. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Crude oil prices are firmer early today, on short covering. Bulls have faded recently. In January Nymex crude, look for buy stops to reside just above resistance at $87.00 and then at $87.50. Look for sell stops just below technical support at Monday’s low of $85.33 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were mixed in overnight trading. Soybean bulls have gained some fresh upside technical momentum recently, while corn and wheat bulls have faded badly. Grain market traders will look to today’s monthly USDA supply and demand report for fresh direction. My bias remains that there is not strong downside price potential in the grains in the coming weeks and months.
