* LATEST MARKET DEVELOPMENTS *

With the U.S. fiscal cliff matter now at least temporarily out of the market place spotlight, focus turns to other issues. There is a heavy slate of U.S. economic data due for release Thursday, just ahead of what is arguably the most important U.S. economic report of the month on Friday morning–the employment situation report. Thursday’s batch of economic data could move the markets. However, Friday’s jobs report is likely to have the biggest impact on the markets. Non-farm payrolls are expected to have risen by 150,000 in December, with the unemployment rate forecast at 7.7%, which is unchanged from last month. In Europe overnight there was fresh data showing the Euro zone continues to see a very fragile financial sector. European Union bank loans to the private sector fell by 0.8% in November, on an annualized basis. Lending to businesses also declined. European stocks and the Euro currency were weaker Thursday. In Asia news, China reported its non-manufacturing PMI rose for the third straight month, to 56.1 in December. Recent economic data coming from China has been upbeat, which is an underlying bullish factor for most markets, including the raw commodities. U.S. economic data due for release Thursday includes the weekly MBA mortgage applications survey, the Challenger job cuts report, the ADP national employment report, weekly jobless claims, the ISM New York business report, ICSC chain store sales data, domestic auto industry sales, and the FOMC minutes.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker in early trading today, on a corrective pullback after hitting a 2.5-month high on Wednesday. Bulls still have upside near-term technical momentum. The 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 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 Wednesday’s high of 1,458.00 and then at the September high of 1,467.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,445.80 and then at Wednesday’s low of 1,439.30. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market
Rating: 5.0

Nasdaq index futures: Prices are weaker early today, on mild profit taking from the recent strong gains. Bulls still have upside near-term technical momentum. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at Wednesday’s high of 2,742.75 and then at 2,750.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,725.00 and then at 2,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are weaker early today on a corrective pullback from recent strong gains. Bulls still have some upside near-term technical momentum. Sell stops likely reside just below technical support at Wednesday’s low of 13,250 and then at 13,200. Buy stops likely reside just above technical resistance at Wednesday’s high of 13,335 and then at 13,400. Shorter-term moving averages are still bearish early today, as the 4-day moving average is below 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: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are firmer early today on short covering following Wednesday’s sharp losses. Bears still some near-term downside technical momentum. 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 early today. Shorter-term resistance lies at the overnight high of 146 2/32 and then at Wednesday’s high of 146 10/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 145 22/32 and then at Wednesday’s low of 145 13/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are slightly higher early today on tepid short covering. Bears still have some downside momentum. 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 bearish early today. Shorter-term resistance lies at the overnight high of 132.08.0 and then at 132.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.03.0 and then at 132.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is higher in early U.S. trading and hit a fresh three-week high. Bulls are gaining some fresh upside near-term technical momentum. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.355 and then at 80.50. Shorter-term support is seen at 80.00 and then at the overnight low of 79.92. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

Crude oil prices are weaker early today on some mild profit taking after hitting a 2.5-month high on Wednesday. Bulls still have some upside technical momentum. In February Nymex crude, look for buy stops to reside just above resistance at $93.00 and then at Wednesday’s high of $93.87. Look for sell stops just below technical support at $92.00 and then at Wednesday’s low of $91.56. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were lower overnight. The key “outside markets” are bearish for grains early Thursday–higher U.S. dollar index
and weaker crude oil prices. The near-term technical postures of the grain markets are fully bearish at present. Would-be bulls need to look for the very early technical clues that the near-term price downtrends in the grains have ended. Nothing of that nature has occurred yet. I will keep you apprised. I do believe that wheat will have to lead the grains on any upside price recoveries.