* LATEST MARKET DEVELOPMENTS *

Attention of the market place has shifted to once again focus on the “fiscal cliff” tax increases and spending cuts that is fast approaching. There is no apparent movement from either side on the matter, just more rhetoric from the politicians. The market is a bit more on edge Thursday after Fed Chairman Bernanke on Wednesday warned that the U.S. Fed could do little to repair the damage from the politicians failing to come to agreement and the government going over the fiscal cliff. The market place had been reckoning odds were a bit higher than not that there would be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff. However, the lack of progress between the Obama administration and Congress as the year winds down is making traders very skittish. The overall situation continues to be a bearish drag on many markets, including the raw commodities and stock markets. The market place is still digesting the U.S. Federal Reserve decision Wednesday to end its “Operation Twist” program but extend its long-bond-buying program to the tune of $45 billion a month. That news is what many had figured the central bank would do. The new plan would expand the Fed’s balance sheet and ostensibly print greenbacks. The FOMC also said it will begin tying interest rate policy to the U.S. unemployment rate, saying as long as unemployment is above 6.5%, rates will not rise. Some quick math on that matter suggests the Fed will not be raising interest rates for at least three more years. Wednesday’s Federal Reserve developments are a bullish underlying fundamental factor for the raw commodity markets.In overnight news, European Union finance officials have agreed on a deal that would create a single bank supervisor and EU banking union. This is a big, positive step for the EU in its three-year-old sovereign debt crisis. The news lifted the Euro currency and lowered Spanish and Italian bond yields. The agreement still needs to be ratified by the European Parliament. Also Thursday Greece was approved to get a fresh tranche of EU bailout money. All in all Thursday was a very positive day in the European Union’s efforts at fixing its financial and economic problems. However, much more heavy lifting needs to occur in the coming months for the EU to continue on a path of recovery.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady in early trading today. Bulls still have near-term momentum on their side. Prices are in a four-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 bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 1,433.00 and then at 1,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s 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: 5.0

Nasdaq index futures: Prices are near steady early today. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at 2,675.00 and then at 2,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,661.00 and then at this week’s low of 2,644.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are near steady early today. Prices are still in a four-week-old uptrend as bulls have some near-term momentum. Sell stops likely reside just below technical support at 13,100 and then at 13,050. Buy stops likely reside just above technical resistance at 13,200 and then at Wednesday’s high of 13,240. 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 bearish early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today and hit a fresh five-week low overnight. Bulls are fading and need to show fresh power soon. Oddly, the FOMC news Wednesday should have been bullish the bond market, but traders took a “buy the rumor, sell the fact” attitude on the matter. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 148 10/32 and then at 148 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 147 21/32 and then at 147 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are near steady early today and hit another fresh two-week low. Bulls are fading but 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 133.05.5 and then at 133.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.28.0 and then at 132.25.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is firmer in early U.S. trading today, on a corrective bounce from recent selling pressure. Bulls have faded recently. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Wednesday’s high of 80.23 and then at Tuesday’s high of 80.50. Shorter-term support is seen at the overnight low of 79.87 and then at 79.78. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are weaker early today. Bears still have the slight overall near-term technical advantage. In January Nymex crude, look for buy stops to reside just above resistance at the overnight high of $86.78 and then at Wednesday’s high of $87.68. Look for sell stops just below technical support at this week’s low of $85.21 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed to lower in overnight trading. The grain market bulls are fading this week, with wheat bears gaining downside technical momentum. Wheat futures this week have seen a bearish downside “breakout” from a well-established trading range on the daily bar chart. The wheat market’s price action this week is worrisome for the entire grain futures complex. If wheat prices continue to erode, there is likely to be spillover selling pressure enter the corn and soybean markets and at least limit their upside potential.