* Latest Market Developments *

(Follow me on Twitter: @jimwyckoff)

In overnight news, the European Union reported its third-quarter gross domestic product, which came in at up 0.2% on the quarter and up 0.8% year-on- year. While not great numbers, they did slightly beat market expectations. This takes just a bit of pressure off of the European Central Bank, which most believe is still set to introduce some fresh monetary stimulus measures at some point down the road.

Traders and investors are fixated on the stunning drop in crude oil prices the past few months. Overnight, Nymex WTI crude oil fell to a four-year low of $73.25 a barrel. Brent crude oil futures also dropped to a four-year low overnight. I look for crude oil to bottom out with a “sixties handle” ($60s per barrel) at some point in the not-too-distant future. While plunging crude oil prices are good news for consumers at the gasoline pumps, it’s a worrisome matter for many veteran market watchers due to the specter of price deflation becoming entrenched in world economies. Sustained deflationary pressures in world economies would be a very bad development.

U.S. economic data due for release Friday includes retail sales, import and export prices, the University of Michigan consumer sentiment survey, and manufacturing and trade inventories and sales.

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

Wyckoff’s Daily Risk Rating: 5.0 (Geopolitical risks have been moved to the back burner of the market place…for now. The Russia-Ukraine conflict might be ready to escalate based on reports this week of a Russian military convoy headed for the Ukraine border.)

(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 near steady in early trading after hitting a record high Thursday. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Thursday’s record high of 2,043.75 and then at 2,050.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 2,026.75 and then at this week’s low of 2,021.00. 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 and hovering near Thursday’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 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 Thursday’s high of 4,227.00 and then at 4,250.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 4,196.00 and then at Wednesday’s low of 4,167.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Dow futures: Prices are near steady in early U.S. trading and hovering near this week’s record high. Buy stops likely reside just above technical resistance at the record high of 17,660 and then at 17,700. Sell stops likely reside just below technical support at Thursday’s low of 17,550 and then at this week’s low of 17,500. Shorter-term moving averages are bullish early today, as the 4-day moving average is above 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 early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are slightly higher early today. Bulls and bears are on a level overall near-term technical playing field. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 141 16/32 and then at 141 24/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 141 3/32 and then at Thursday’s low of 140 22/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 December U.S. T-Notes: Prices are near steady in early trading. 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 neutral to bullish early today. Shorter-term resistance lies at the overnight high of 126.19.0 and then at 126.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.12.0 and then at Thursday’s low of 126.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The December U.S. dollar index is higher in early trading. Prices are hovering near the recent contract and four-year high. Bulls still 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 high of 88.17 and then at the contract high of 88.315. Shorter-term support is seen at the overnight low of 87.870 and then at Thursday’s low of 87.700. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

December Nymex crude oil prices are slightly higher in early U.S. trading, but dropped to a four-year low overnight. Bears remain in solid overall near-term technical control. Look for buy stops to reside just above technical resistance at $75.00 and then at $76.00. Look for sell stops just below technical support at $74.00 and then at the overnight low of $73.25. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Grain futures markets were lower in overnight trading, on some profit taking and a corrective pullback from recent impressive gains. A strong rally in soybean futures this week has led all the grain market bulls. Recent price action suggests all of the big, bearish supply news may now be factored into grain futures prices. The grain market bulls are enjoying price uptrends on the daily bar charts. Traders will closely examine today’s weekly USDA export sales report.