* LATEST MARKET DEVELOPMENTS *

The market place is still buzzing about the “dovish” remarks made Thursday by Federal Reserve Chair nominee Janet Yellen to the U.S. Senate Banking Committee. During questioning by senators Yellen said U.S. monetary policy needs to remain very accommodative so that the U.S. economy can grow faster and unemployment can decline further. Yellen also said she would continue current Fed Chairman Ben Bernanke’s monetary policies and said the U.S. economy still needs monetary stimulus because it is performing below its potential. Not unexpectedly, the market place read Yellen’s remarks as being in the dovish monetary policy camp.

While Yellen’s remarks were not surprise to the market place, it seems the market place has moved back its collective timeframe for the Fed to begin “tapering” its quantitative easing of U.S. monetary policy—or at least the matter has become more of an uncertainty. Some market watchers think the Fed may announce it is cutting back on its monthly bond-buying program at its mid-December FOMC meeting. However, other market watchers don’t expect the Fed to make any tapering move until the second quarter of 2014, at the earliest. I presently fall into the camp of the latter. Recent U.S. economic data has just not been strong enough to meet the Fed’s own criteria for backing off on their printing of money.

By the way, the market place also read the well-spoken Yellen’s testimony to the Senate committee on Thursday as very well received by the senators. Many TV commentators said the senators treated Yellen with “kid gloves.” This strongly hints she will breeze through the confirmation
process on her way to becoming the next head of the U.S. central bank.

In other news, the European Union released another very low inflation report Friday, showing a four-year-low reading of 0.7% in October, on an annualized basis. This low reading will allow the European Central Bank to also maintain its very accommodative monetary policy for quite some time to come.

U.S. economic data due for release Friday includes the Empire State manufacturing survey, industrial production and capacity utilization and monthly wholesale trade inventories.

Thursday’s Wyckoff’s Daily Risk Rating: 5.0 (The market place remains calm heading into the weekend. It’s been a while since major geopolitical issues impacted the market place. That makes me wonder how long this calmness will last.)

(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).–Jim Wyckoff
 
U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer in early U.S. trading and hit another record high overnight. 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 overnight high of 1,792.30 and then at 1,800.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,786.90 and then at Thursday’s low of 1,778.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are firmer early today and hit another 13-year high overnight. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above 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 3,421.25 and then at 3,435.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,400.00 and then at Thursday’s low of 3,386.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Dow futures: Prices are firmer early today and hit a new record high overnight. Buy stops likely reside just above technical resistance at 15,900 and then at 15,950. Sell stops likely reside just below technical support at 15,800 and then at Thursday’s low of 15,765. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day and 8-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are weaker early today. Shorter-term moving averages (4- 9- 18-day) are still 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 early today. Shorter-term resistance lies at the overnight high of 132 25/32 and then at this week’s high of 132 31/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at Thursday’s low of 132 1/32 and then at last week’s low of 131 18/32. 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. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 126.31.0 and then at 127.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Thursday’s low of 126.13.5 and then at 126.08.0. 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 early today. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.210 and then at 81.350. Shorter-term support is seen at this week’s low of 80.800 and then at 80.500. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

December Nymex crude oil prices are near steady early today. Prices Thursday hit a 4.5-month low. Bears have the overall near-term technical advantage. Prices are in an 11-week-old downtrend on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at the overnight high of $94.30 and then at $95.00. Look for sell stops just below technical support at $93.00 and then at Wednesday’s low of $92.51. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were again mixed overnight. Traders will get some fresh news this morning, with the weekly USDA export sales report, delayed by one day due to the U.S. holiday on Monday. Corn bulls have faded again. Soybean bulls still have some upside technical momentum. Wheat is still technically bearish but will remain a follower for at least the near term.