* Latest Market Developments *

OVERNIGHT DEVELOPMENTS

The better risk appetite in the market place this week continues on Thursday. U.S. stock indexes are firmer in early electronic trading. No major flare-ups on the world geopolitical scene are helping to assuage investor anxiety this week, even though there was unsettling news coming out of Canada Wednesday with an apparent “lone-wolf” terrorist attack. U.S. corporate earnings reports that are mostly upbeat this week are helping to rally the U.S. equities. The rally in the stock markets has been a negative underlying factor for safe-haven gold and U.S. Treasuries.

In overnight news, the HSBC preliminary report on China manufacturing activity came in at 50.4 in October compared to 50.2 in September. However, Asian stock markets gave this report a negative slant as they sold off a bit on the news.

There was also modestly upbeat economic data coming out of the European Union Thursday, as the Markit EU composite purchasing managers index (PMI) came in at 52.2 in October versus 52.0 in September. This news helped the support the Euro currency against the U.S. dollar. European stock markets also were lifted on the PMI news.

Traders and investors continue to keep an extra close eye on the two key “outside markets”—crude oil and the U.S. dollar index. Crude oil is still in a major bear market as prices hover near two-plus year lows. The dollar index is also trading not far below its recent four-year high. The postures for these two important markets remain a negative force working against most raw commodity markets.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago Fed national activity index, the monthly house price index, the U.S. flash manufacturing PMI, leading economic indicators, and the Kansas City Fed manufacturing survey.

Wyckoff’s Daily Risk Rating: 6.0 (The market place is less anxious this week. However, the matters that unnerved markets last week are still lurking and could quickly move to the front burner.)

(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 modestly higher in early trading. Bulls have gained good upside technical momentum this week. The shorter-term moving averages (4-, 9- and 18-day) are nuetral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,939.00 and then at this week’s high of 1,943.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,920.25 and then at 1,910.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher in early trading. Bulls have upside technical momentum. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at Wednesday’s high of 3,980.00 and then at 4,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,950.00 and then at Wednesday’s low of 3,938.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Dow futures: Prices are firmer in early U.S. trading. Bulls have upside momentum. Buy stops likely reside just above technical resistance at 16,500 and then at Wednesday’s high of 16,570. Sell stops likely reside just below technical support at 16,425 and then at 16,400. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are near steady 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. 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 142 28/32 and then at 143 even. Buy stops likely reside just above those levels. Shorter-term technical support is seen at the overnight low of 142 2/32 and then at 142 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 December U.S. T-Notes: Prices are lower in early trading. Bulls still have the overall near-term technical advantage but are fading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 127.16.0 the overnight high of 127.22.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 127.06.0 and then at 127.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The December U.S. dollar index is slightly lower in early trading. Bulls still have the overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 86.025 and then at 86.130. Shorter-term support is seen at the overnight low of 85.755 and then at Wednesday’s low of 85.325. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

December Nymex crude oil prices are near steady early today. Bears are still in firm overall near-term technical control. Look for buy stops to reside just above technical resistance at $81.00 and then at $82.00. Look for sell stops just below technical support at $80.00 and then at the October low of $79.10. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were firmer in overnight trading. All three grain futures markets are in fledgling price uptrends on the daily charts, to suggest market bottoms are in place. However, don’t look for strong price uptrends to develop, but more likely a sideways grind in the coming weeks. Traders will scrutinize today’s weekly USDA export sales report.