* LATEST MARKET DEVELOPMENTS *

Wednesday the heat gets turned up on a big week for economic data. In the U.S., the monthly ADP national employment report and Federal Reserve’s beige book highlight a busy economic report day Wednesday. The European Central Bank’s monthly monetary policy meeting is on Thursday and the U.S. jobs report is on Friday.

Traders and investors for many weeks have been buzzing about the precise timing of when the Fed will alter its monetary policy and back off from its monthly bond-buying program—called quantitative easing. So far this week’s batch of generally upbeat U.S. data has fallen into the camp that reckons the Fed will act to taper sooner rather than later. However, the more critical economic data out this week is yet to come. This week’s data will provide at least some new insight on the timing of the Fed’s next move.

The European Union’s latest batch of economic data released Wednesday was mostly downbeat, as gross domestic product stagnated, consumer spending slowed, retail sales declined and manufacturing activity also declined, from their previous readings. These reports suggest the European Central Bank will keep its monetary policy very accommodative for some time to come. To extrapolate further, the latest EU economic data suggests the upside is limited for the Euro currency, which in turn is a bullish development for the U.S. dollar.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. trade report, new residential home sales, the weekly DOE energy stocks report, the global services PMI, the beige book, and the ISM non-manufacturing report on business.

Wyckoff’s Daily Risk Rating: 6.0 (The economic data release pace picks up rapidly Wednesday and will remain strong the rest of the week.)

(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 futures: Prices are near steady in early U.S. trading. 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 to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,795.70 and then at Tuesday’s high of 1,801.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 1,786.30 and then at 1,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are slightly higher early today. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-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 located at the overnight high of 3,485.25 and then at this week’s high of 3,501.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 3,466.25 and then at 3,450.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are near steady early today. Buy stops likely reside just above technical resistance at Tuesday’s high of 15,955 and then at 16,000. Sell stops likely reside just below technical support at Tuesday’s low of 15,850 and then at 15,800. 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 above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are lower early today. The bears have the overall near-term technical advantage as prices are in a choppy, six-week-old downtrend on the daily bar chart. 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 bearish early today. Shorter-term resistance lies at the overnight high of 130 3/32 and then at this week’s high of 130 18/32. Buy stops likely eside just above those levels. Shorter-term technical support lies at this week’s low of 129 20/32 and then at 129 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
 
March U.S. T-Notes: Prices are lower early today. 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 bearish early today. Shorter-term resistance lies at 125.00.0 and then at the overnight high of 125.03.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 124.23.5 and then at 124.18.0. 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 slightly higher early today, on tepid short covering. The greenback bears have the overall near-term technical advantage amid recent choppy trading. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 81.00 and then at this week’s high of 81.185. Shorter-term support is seen at this week’s low of 80.700 and then at last week’s low of 80.675. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

January Nymex crude oil prices are higher early today and hit a fresh five-week high on heavy short covering and bargain hunting. Price action Tuesday produced a bullish upside “breakout” on the daily bar chart, to suggest a market low is in place. A three-month-old downtrend on the daily bar chart has been negated. In January Nymex crude, look for buy stops to reside just above resistance at the overnight high of $97.53 and then at $98.00. Look for sell stops just below technical support at $96.00 and then at $95.63. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

Markets were slightly higher overnight, on short covering. Corn futures bears are still in technical control, but I don’t expect to see strong downside price pressure at these lower levels. Wheat futures have seen the technical posture improve markedly to the point that I am confident a market low is in place. Soybean bulls have the near-term technical advantage. The South American planting and growing season is off to a good start and that is a bearish factor for corn and especially soybeans.