* LATEST MARKET DEVELOPMENTS *

Monday is the last trading day of the month, of the quarter and of the first half of the year. That makes it an extra important trading day from a technical perspective. It is technically significant when a market price closes out the aforementioned periods at or near a weekly, monthly or quarterly high or low close.

There was more downbeat economic data from the European Union released Monday. EU inflation was unchanged in June from May, at 0.5% on an annual basis. The figure was in line with forecasts and remained at a four-year low. The European Central Bank wants to see an annual inflation rate of around 2%. The same report showed bank lending in the EU fell again, as it has done for 25 months in a row.

The market place is awaiting important economic data from China, as its purchasing managers index (PMI) is due out Tuesday. On Monday China housing prices were reported down in June. This is yet another sign of a slowing rate of growth in China’s still-booming economy.

U.S. economic data due for release Monday includes the ISM Chicago business survey, pending home sales, and the Texas manufacturing outlook survey. It’s a holiday-shortened trading week in the U.S., what with the Independence Day holiday on Friday. The key U.S. jobs report is issued a day early this month, on Thursday. This report is arguably the most important U.S. economic data of the month. Also on Thursday will be the monthly monetary policy meeting of the European Central Bank. It will be an extra important trading day on Thursday.

The civil war in Iraq is still an issue for the market place but it has at least temporarily moved off the front burner. The oil fields in the south of Iraq have not seen their production levels curtailed by the civil war taking place in the north of Iraq. Don’t be surprised to see in the near future this matter move back into the spotlight of the market place and once again significantly impact some market prices.

Wyckoff’s Daily Risk Rating: 6.0 (Civil war in Iraq still has the world market place somewhat concerned but there have been no major new developments recently.)

(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), and 5 being neutral.

–Jim Wyckoff

U.S. STOCK INDEXES

S&P 500 September e-mini futures: Prices are slightly lower in early trading. Bulls still have the solid overall near-term technical advantage. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at Friday’s high of 1,954.00 and then at the record high of 1,960.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 1,937.25 and then at 1,929.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are slightly higher early today. Bulls still have the solid overall near-term technical advantage as prices hover not far below last week’s 14-year high. 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 bullish early today. Shorter-term technical resistance is seen at last week’s high of 3,836.00 and then at 3,850.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,825.00 and then at Friday’s low of 3,809.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

Dow futures: Prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at 16,757 and then at 16,780. Sell stops likely reside just below technical support at 16,700 and then at last week’s low of 16,665. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day and 18-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are firmer early today. Bulls have the firm 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at last week’s high of 137 12/32 and then at 137 24/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 136 27/32 and then at 136 13/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are firmer in early trading. Bulls have the firm 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at last week’s high of 125.09.0 and then at 125.12.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.02.0 and then at 124.31.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The September U.S. dollar index is slightly lower in early trading and hit a six-week low overnight. Bears have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.125 and then at Friday’s high of 80.270. Shorter-term support is seen at 80.000 and then at 79.900. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

August Nymex crude oil prices are weaker in early U.S. trading, on profit taking. Bulls still have the overall near-term technical advantage. Prices are in a six-month-old uptrend on the daily bar chart. In August Nymex crude, look for buy stops to reside just above resistance at $106.00 and then at $106.50. Look for sell stops just below technical support at $105.00 and then at $104.50. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed to weaker in overnight trading. Focus is squarely on Monday’s USDA June acreage and supply and demand data—one of the most important reports of the year for the grains. Look for active price action in the wake of the reports. However, that data will likely be quickly digested as the calendar turns to July–the time period when dry and hot weather can start to enter the Corn Belt. However, weather in the U.S. Corn Belt has seen heavy rains in many regions, which has somewhat hurt the corn and soybean crops in those regions, but remains overall favorable for growing. Corn and Wheat market bears are still in overall technical control. Bean bulls have the chart advantage in new-crop November futures.