* Latest Market Developments *

The U.S. dollar hit a seven-year high against the Japanese yen and hit a two-year high against the Euro currency overnight—in the aftermath of Friday’s much-stronger-than-expected U.S. jobs report. The other key “outside market”—crude oil—is trading lower to start the trading week, with Nymex crude oil futures hovering not far above last week’s five-year low of $63.25 a barrel.

In other overnight news, there was another downbeat economic report coming out of China. The world’s second-largest economy saw its exports rise by 4.7% in November, which was well below expectations for a gain of 8.0%. Imports were down 6.7% versus expectations for a rise of 3.9%.

And in Japan, gross domestic product in the third quarter was reported at minus 1.9%, which was below expectations. Japan is now in economic recession.

European Central Bank official Ewald Nowatny said Monday the weakening of the Euro zone economy has been “massive.” The OECD issued a report Monday saying the already-weak economic growth in the European Union will slow further in the coming months, including the potential for the EU to fall back into recession. The OECD forecast slowdowns in the economies of the U.K. and Russia, too. The agency said economic growth in the rest of the world’s major economies will remain near present levels.

U.S. economic data due for release Monday is light and includes the employment trends index.

(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.)

(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 weaker in early trading, on profit taking, but still hovering not far below last week’s record high. 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. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at Friday’s record high of 2,071.75 and then at 2,075.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,054.00 and then at last week’s low of 2,041.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are lower 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 4,313.00 and then at Friday’s high of 4,327.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at last 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: 4.0

Dow futures: Prices are weaker in early U.S. trading. Buy stops likely reside just above technical resistance at Friday’s record high of 17,975 and then at 18,000. Sell stops likely reside just below technical support at 17,890 and then at 17,850. 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are slightly lower early today. Bulls still have the slight 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 early today. Shorter-term technical resistance is seen at 142 even and then at 142 8/32. Buy stops likely reside just above those levels. Shorter-term support lies at 141 even and then at last week’s low of 140 26/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 March U.S. T-Notes: Prices are lower and hit a three-week low in early trading. Bulls have lost their 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 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 126.20.5 and then at 126.26.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.17.5 and then at 125.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The March U.S. dollar index is firmer in early trading and hit another contract and four-year high overnight. Bulls have the solid overall near-term technical advantage. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at overnight contract high of 89.785 and then at 90.000. Shorter-term support is seen at the overnight low of 89.505 and then at 89.250. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

January Nymex crude oil prices are lower in early U.S. trading and hovering near last week’s five-year low. Bears remain in strong overall near-term technical control. Look for buy stops to reside just above technical resistance at $65.00 and then at the overnight high of $65.55. Look for sell stops just below technical support at $64.00 and then at last week’s low of $63.25. Wyckoff’s Intra-Day Market Rating: 3.5

GRAINS

Grain futures markets were mostly lower in overnight trading. The key “outside markets” are in a bearish posture early today, as the U.S. dollar index is higher and crude oil prices are lower. Profit taking is featured in the grains early this week. Grain market bulls need to show some more power soon. It remains my bias that the grain market bulls have stiff headwinds to navigate in the near term.