* Latest Market Developments *

The U.S. dollar index hit a four-year high overnight and the Euro currency fell to a two-year low against the greenback. The latest European Union purchasing managers index (PMI) came in weaker than expected, which pressured the Euro. The data firm Markit reported the said the composite EU PMI for November was 51.1 versus 52.1 in October. A reading above 50.0 suggests the sector is growing.

The European Central Bank holds its monthly meeting Thursday. Many believe the ECB will not yet move to further stimulate EU monetary policy, but most think its coming. Recent economic data coming out of the European Union suggests the ECB will make its move in the first quarter of 2015.

In other overnight news, the Russian central bank moved to intervene in the foreign exchange market Wednesday by selling U.S. dollars, in an effort to support the flagging ruble. However, as is usually the case, the central bank intervention had little impact as the ruble fell to a new record low versus the greenback. Plunging crude oil prices and Western sanctions against Russia have put the Russian economy into recession.

Crude oil prices are stable in early dealings Wednesday. Price action this week has been volatile on an intra-day basis, after prices fell to a five-year low of $63.72 early Monday, basis the January Nymex futures contract.

Traders and investors are also awaiting what is arguably the most important U.S. economic data point of the month: Friday’s employment situation report from the U.S. Labor Department.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, revised productivity and costs, the global services PMI, the U.S. services PMI, the ISM non-manufacturing report, and the weekly DOE liquid energy stocks report.

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

Wyckoff’s Daily Risk Rating: 6.0 (While geopolitical risks have been moved to the back burner of the market place, the plunging crude oil market has somewhat rattled the market place.)

(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 near steady in early trading, but hovering not far below the recent record high. The 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 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 this week’s high of 2,061.00 and then at last week’s record high of 2,068.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,050.00 and then at this week’s low of 2,041.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are near steady in early trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 4,311.25 and then at this week’s high of 4,330.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 4,285.50 and then at 4,275.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are near steady in early U.S. trading. Buy stops likely reside just above technical resistance at Tuesday’s record high of 17,885 and then at 17,900. Sell stops likely reside just below technical support at Tuesday’s low of 17,790 and then at 17,750. 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 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

March U.S. T-Bonds: Prices are weaker again early today on more profit taking after hitting a six-week high Monday. Bulls are fading 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 technical resistance is seen at the overnight high of 141 4/32 and then at 141 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 140 26/32 and then at 140 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 March U.S. T-Notes: Prices are weaker in early trading on more profit taking. Bulls still have the overall near-term technical advantage but are fading. 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 126.12.0 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.06.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The March U.S. dollar index is higher in early trading and hit a contract and four-year high overnight. Bulls have the solid overall near-term technical advantage. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 89.200 and then at 89.350. Shorter-term support is seen at 89.000 and then at the overnight low of 88.870. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

January Nymex crude oil prices are near steady in early U.S. trading. Bears remain in strong overall near-term technical control. Look for buy stops to reside just above technical resistance at the overnight high of $67.97 and then at $69.00. Look for sell stops just below technical support at $66.00 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Grain futures markets were lower in overnight trading. Corn and soybean bulls are fading. January soybeans see a bearish head-and-shoulders top reversal pattern that has formed on the daily chart. Wheat is the upside mover this week as prices hit four-month highs. Wheat prices remain in an uptrend.