* Latest Market Developments *

The focus of the market place continues to be on the falling price of crude oil. Overnight, January Nymex crude dropped to another five-year low of $58.80 a barrel. A bearish report was released Friday from the International Energy Agency, which forecast reduced world demand for crude oil in 2015. Despite consumers cheering falling gasoline prices at the pump, traders and investors are greeting the decline in crude oil prices with trepidation. World stock markets were under selling pressure overnight and U.S. stock indexes are lower in pre-market trading early Friday. The sell-off in world equities has benefitted safe-haven assets this week, including gold and U.S. Treasuries.

The higher intra-day volatility in the U.S. stock indexes this week is an early technical clue of a topping process.

In other overnight news, the Bank of Russia once again intervened in the currency markets to support the beleaguered ruble Friday as the Russian currency fell to another record low against the U.S. dollar. The ruble is down 44% against the greenback this year.

European Union industrial production rose 0.1% in October and was up 0.7% year-on-year. Those figures were below market expectations.

Meantime, data from China showed stronger-than-expected bank loan activity in November.

The Japanese yen is seeing selling pressure and volatile trading this week, ahead of elections in Japan on Sunday.

Traders and investors are already looking ahead into next week, when the Federal Reserve’s Open Market Committee (FOMC) meets to discuss U.S. monetary policy.

U.S. economic data due for release Friday includes the producer price index, and the University of Michigan consumer sentiment survey.

(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)

Wyckoff’s Daily Risk Rating: 6.0 (Geopolitical risks are mostly on the back burner of the market place…for now. However, the falling price of oil and some fresh European Union sovereign debt issues have traders and investors a bit nervous.)

(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 March e-mini futures: Prices are lower in early trading and hit a five-week low overnight. Bulls have faded, technically, this week. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,024.75 and then at 2,041.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,009.50 and then at 2,000.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0

Nasdaq index futures: Prices are lower and hit a five-week low in early trading. Bulls are fading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 the overnight high of 4,230.00 and then at 4,250.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 4,188.00 and then at 4,175.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

Dow futures: Prices are lower in early U.S. trading and hit a five-week low overnight. Bulls are fading. Buy stops likely reside just above technical resistance at 17,500 and then at 17,550. Sell stops likely reside just below technical support at 17,400 and then at 17,350. Shorter-term moving averages are neutral 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 bearish early today. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are higher early today and hit a two-month high overnight. Bulls have the solid overall near-term technical advantage amid flight-to-quality buying. 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 technical resistance is seen at the overnight high of 145 4/32 and then at 145 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at 144 16/32 and then at the overnight low of 144 9/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 March U.S. T-Notes: Prices are higher in early trading. Bulls have the 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 the overnight high of 127.13.5 and then at the December high of 127.15.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 127.00.0 and then at the overnight low of 126.29.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The March U.S. dollar index is lower in early trading. Bulls still have the firm overall near-term technical advantage but trading has turned choppy this week. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 88.905 and then at Thursday’s high of 89.050. Shorter-term support is seen at the overnight low of 88.465 and then at this week’s low of 88.195. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

January Nymex crude oil prices are lower in early U.S. trading and hit another five-year low overnight. Bears remain in strong overall near-term technical control. Look for buy stops to reside just above technical resistance at $60.00 and then at $61.00. Look for sell stops just below technical support at the overnight low of $58.80 and then at $58.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures markets were higher in overnight trading, with corn leading gains. If the grain markets can close out this week with gains on Friday, it would re-establish a price uptrend in corn, would give the soybean bulls the near-term technical advantage and give the wheat bulls fresh upside technical momentum.