* Latest Market Developments *

In overnight news, reports said Russia and Ukraine have agreed on a cease-fire from the ongoing conflict in eastern Ukraine. This news has added a bit to investor risk appetite in the market place on Wednesday. However, many are skeptical any cease-fire in the region will last.

The European Union saw its retail sales decline 0.4% in July from June, and were up 0.8% year-on-year. Also, the EU composite purchasing managers index (PMI) came in at 52.5 in August versus 53.8 in July. This continues a string of downbeat economic data coming out of the EU.

Traders are awaiting this week’s big economic data points–Thursday’s European Central Bank meeting and Friday’s U.S. jobs report. The market place reckons the ECB is on the verge of announcing fresh monetary stimulus. However, there is uncertainty on the precise timing of any such move. The U.S. jobs report will give the latest reading on the important non-farm payrolls growth, seen at up 220,000 in August. Recent improving U.S. economic data suggests the Federal Reserve will continue to wind down its quantitative easing of monetary policy by the end of this year, and will likely begin to raise interest rates sometime in 2015.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business, manufacturers’ shipments and inventory, the Fed’s beige book and domestic auto sales.

Wyckoff’s Daily Risk Rating: 6.0 (The market place this week is less focused on the tensions between Russia and Ukraine, and on other world hot spots. But I look for that trader and investor antipathy to change, and sooner rather than later.)

(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.

The London A.M. gold fix is $1,268.50 versus the previous P.M. fixing of $1,267.00.

–Jim Wyckoff

U.S. STOCK INDEXES

S&P 500 December e-mini futures: Prices are firmer in early trading and hit another new 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,010.00 and then at 2,020.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,991.75 and then at last week’s low of 1,979.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5

Nasdaq index futures: Prices are firmer in early trading today and hit another 14-year high overnight. Bulls are in firm technical command. 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 early today. Shorter-term technical resistance is seen at 4,115.00 and then at 4,125.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 4,092.25 and then at 4,075.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5

Dow futures: Prices are firmer in early U.S. trading and hovering not far below last week’s record high. Buy stops likely reside just above technical resistance at the record high of 17,130 and then at 17,150. Sell stops likely reside just below technical support at 17,075 and then at 17,050. Shorter-term moving averages are still 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: 6.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are lower early today and seeing more profit taking. Bulls are fading this week but still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 138 24/32 and then at 139 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 138 even and then at 137 30/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 December U.S. T-Notes: Prices are lower in early trading and hit a four-week low overnight. Bulls still have the overall near-term technical advantage, but are fading this week. Shorter-term moving averages (4- 9- 18-day) are  neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 125.00.0 and then at the overnight high of 125.09.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.24.5 and then at 124.20.0. 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 weaker in early trading and seeing profit taking after hitting hit a 13-month high overnight. Bulls still have the firm 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 high of 83.190 and then at 83.250. Shorter-term support is seen at Tuesday’s low of 82.900 and then at 82.750. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

October Nymex crude oil prices are higher in early U.S. trading, on a short-covering bounce from strong losses posted on Tuesday. Bears still have the overall near-term technical advantage as prices are in a nine-week-old downtrend on the daily bar chart. Look for buy stops to reside just above resistance at $94.50 and then at $95.00. Look for sell stops just below technical support at the overnight low of $93.06 and then at the August low of $92.50. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were weaker in overnight trading. Grain market bears are in full technical command of the grains at present. Prices are again creeping back down toward their recent contract lows, and a push to new lows in the grains cannot be ruled out—even though prices may be still “basing” to form bottoms. U.S. corn and soybean harvest is set to begin, in earnest, the next few weeks. The very wet weather in parts of the Corn Belt that had benefited the crops could start to hamper harvest progress, if the wet-weather pattern continues.