* Latest Market Developments *

OVERNIGHT DEVELOPMENTS

The U.S. government and U.S. Treasury markets are closed for the Columbus Day holiday Monday. There are also no major U.S. economic reports due for release. That could make for a more subdued market place to start the trading week. The stock market bulls are certainly hoping for a respite Monday, following late last week’s beat-down.

There was upbeat economic data coming out of China Monday. Import prices rose 7% in September, while exports were up 15% in the period. This is good news for raw commodity market bulls, as China is the world’s largest importer of raw commodities.

The U.S. dollar index is solidly lower Monday, as the greenback bulls are fading a bit after pushing prices to a four-year high last week. Meantime, Nymex crude oil futures are lower Monday morning and hovering near last week’s two-year low. There are now cracks starting to develop in the OPEC oil cartel, as reports said member countries are offering discounts on their oil, to preserve their market share. I look for crude oil prices to continue their slide in the near term, including possibly pushing below $80.00 a barrel.

Wyckoff’s Daily Risk Rating: 6.0 (The market place is focused on the prospect of weakening world economies amid a U.S. stock market sell-off. This is causing some keener risk aversion to start the trading week, although the U.S. holiday Monday will likely keep trading more subdued.)

(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 firmer in early trading, on short covering after hitting a 4.5-month low overnight. Bears still have downside momentum. There are solid technical clues that at least a near-term market top is now in place. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 1,918.00 and then at 1,925.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,880.50 and then at 1,875.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are slightly higher in early trading today and hit a 3.5-month low overnight. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 3,875.00 and then at 3,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,825.75 and then at 3,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are firmer in early U.S. trading, on short covering. Prices are hovering near a two-month low. Buy stops likely reside just above technical resistance at 16,500 and then at 16,550. Sell stops likely reside just below technical support at Friday’s low of 16,430 and then at 16,400. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are higher early today and hit another contract high overnight. Bulls have the solid overall near-term technical advantage amid safe-haven buying interest. Shorter-term moving averages (4- 9- 18-day) are 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 neutral to bullish early today. Shorter-term resistance lies at the contract high of 142 5/32 and then at 142 16/32. Buy stops likely reside just above those levels. Shorter-term technical support 141 16/32 141 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0 December U.S. T-Notes: Prices are higher in early trading and hit another contract high overnight. Bulls have the solid overall near-term technical advantage, amid safe-haven demand. Shorter-term moving averages (4- 9- 18-day) are 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 neutral to bullish early today. Shorter-term resistance lies at the overnight contract high of 127.04.5 and then at 127.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.22.5 and then at 126.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0

U.S. DOLLAR INDEX

The December U.S. dollar index is sharply lower in early trading. Bulls still have the overall near-term technical advantage but have faded recently. Right now, this is just a downside correction in a bull market. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 85.935 and then at 86.000. Shorter-term support is seen at the overnight low of 85.530 and then at 85.250. Wyckoff’s Intra Day Market Rating: 3.0

NYMEX CRUDE OIL

November Nymex crude oil prices are solidly lower early today and hovering near Friday’s two-year low. Bears are in strong overall near-term technical control. Look for buy stops to reside just above technical resistance at $85.00 and then at $86.00. Look for sell stops just below technical support at $84.00 and then at Friday’s low of $83.59. Wyckoff’s Intra-Day Market Rating: 3.0

GRAINS

Markets were mostly lower in overnight trading. The risk aversion in the market place recently has been yet another bearish drag on the grain futures markets. Selling interest in corn and soybeans could be somewhat limited early this week as rain over parts of the U.S. Corn Belt will again delay harvest progress. Focus is starting to shift to the growing season for corn and soybeans in South America. Dry weather in some parts of South American soybean regions is also a slightly bullish development. Grain market bears remain in near-term technical control.