* Latest Market Developments *

In overnight news, China’s trade surplus hit a record high in August, at $49.8 billion, and well above market expectations. China exports were reported up 9.2% in August, year-on-year, which is slightly better than expectations. Imports were down 2.4%. Falling raw commodity prices were a major contributor to China’s trade surplus. China is the world’s largest raw commodity importer.

Meantime, Japan’s economy contracted by 7.1% in the second quarter, year-on-year, it was reported Monday. The past few years have seen Japan, which is still a top-five world economy, become less of a factor in world economic and markets matters.

A holiday in Asia Monday had some Asian markets closed for the day.

The British pound slumped Monday following a weekend poll that showed growing favor for Scotland being an independent country.

On the geopolitical front there were no major, markets-moving developments during the weekend. The Russia-Ukraine cease-fire appears to be generally holding, although there were some reports of skirmishes. New sanctions against Russia are set to be implemented by the European Union this week—mostly eliminating the ability of Russian businesses to raise capital in Europe. The ISIS terror group uprising in the Middle East is still a major concern for the U.S. and the U.K., but there were no major weekend developments on that front.

U.S. economic data due for release Monday is light and includes the employment trends index and consumer installment credit.

Wyckoff’s Daily Risk Rating: 6.0 (The market place is still somewhat focused on the tensions between Russia and Ukraine, and on other world hot spots.)

(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 December e-mini futures: Prices are slightly lower in early trading, on mild profit taking. 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 the record high of 2,002.75 and then at 2,015.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 1,980.50 and then at 1,970.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker in early trading today on mild profit taking. Bulls are still in technical command. 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 bearish early today. Shorter-term technical resistance is seen at Friday’s high of 4,089.00 and then at last week’s high of 4,105.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 4,070.00 and then at last week’s low of 4,052.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Prices are weaker in early U.S. trading on profit taking. Buy stops likely reside just above technical resistance at 17,117 and then at the record high of 17,150. Sell stops likely reside just below technical support at Friday’s low of 17,000 and then at 16,950. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-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: 4.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are higher early today. Bulls have faded a bit 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 early today. Shorter-term resistance lies at the overnight high of 138 13/32 and then at 139 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 138 even and then at the overnight low of 137 31/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 December U.S. T-Notes: Prices are firmer in early trading. Bulls have the overall near-term technical advantage. 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 bullish early today. Shorter-term resistance lies at the overnight high of 125.11.0 and then at 125.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.01.5 and then at last week’s low of 124.24.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The December U.S. dollar index is higher in early trading and hit another contract and 13-month high overnight. Bulls have the solid overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight contract high of 84.100 and then at 83.250. Shorter-term support is seen at the overnight low of 83.935 and then at Friday’s low of 83.705. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

October Nymex crude oil prices are weaker and hit a seven-month low in early U.S. trading. Bears have the firm overall near-term technical advantage as prices are in a 10-week-old downtrend on the daily bar chart. Look for buy stops to reside just above resistance at the overnight high of $93.62 and then at $94.00. Look for sell stops just below technical support at the overnight low of $92.34 and then at $92.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were slightly lower in overnight trading. The surging U.S. dollar index is a bearish “outside market” force working against the grains recently. Grain market bears are still in full technical command. Prices are near their contract lows. U.S. corn and soybean harvest is set to begin, in earnest, the couple few weeks.