* LATEST MARKET DEVELOPMENTS *

Traders continue to digest last Friday’s much-weaker-than-expected U.S. jobs report, which begins to suggest the Federal Reserve pay have to taper its just-implemented tapering program. The big miss to the downside on non-farm jobs growth in December now makes upcoming U.S. economic data that much more important, to see if a trend of weaker reports is developing. The U.S. dollar index hit a two-week low on Monday and U.S. Treasury bonds hit a three-week high, in the wake of the dismal jobs report released Friday. If the greenback continues to weaken and U.S. Treasuries continue to strengthen, that would be a bullish development for the precious metals markets and for other raw commodity markets.

In overnight news, Iran and six world powers this weekend agreed to move to the next step in the winding down of Iran’s nuclear weapons program. This put some pressure on crude oil markets, given the present embargo that limits Iran’s oil being sold on the world market, which would end if Iran continues to cooperate with the major world powers.

The physical gold market in Asia could see better demand in the very near term as the Chinese Lunar New Year holiday begins on January 31. That holiday typically sees gold as a popular gift.

U.S. economic data due for release Monday includes the employment trends index and the monthly Treasury budget statement.

Wyckoff’s Daily Risk Rating: 5.0 (No apparent, significantly market-sensitive events today.)

(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

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker in early U.S. trading on some profit taking. 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 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 the overnight high of 1,838.30 and then at the record high of 1,846.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,824.50 and then at last week’s low of 1,817.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker early today on profit taking. 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 bearish early today. Shorter-term technical resistance is located at the overnight high of 3,563.25 and then at last week’s high of 3,577.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Friday’s low of 3,529.50 and then at last week’s low of 3,505.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Prices are weaker early today on profit taking. Buy stops likely reside just above technical resistance at Friday’s high of 16,415 and then at 16,460. Sell stops likely reside just below technical support at Friday’s low of 16,320 and then at 16,300. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-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: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today and hit a three-week high overnight. Short covering and bargain hunting are featured as the bulls are gaining upside momentum. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-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 high of 130 31/32 and then at the December high of 131 12/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130 18/32 and then at 130 even. 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 and hit a fresh three-week high on short covering and bargain hunting. Bulls are gaining upside near-term technical momentum. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-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 high of 124.15.5 and then at 124.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.07.5 and then at 124.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The March U.S. dollar index is weaker early today and hit a two-week low overnight. The greenback bulls are now fading. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.760 and then at 81.000. Shorter-term support is seen at the overnight low of 80.560 and then at the January low of 80.430. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

February Nymex crude oil prices are lower early today and hovering near a 6.5-month low. Bears have the solid overall near-term technical advantage. In February Nymex crude, look for buy stops to reside just above resistance at the overnight high of $92.88 and then at Friday’s high of $93.38. Look for sell stops just below technical support at last week’s low of $91.24 and then at $91.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed overnight as traders continue to digest last Friday’s USDA quarterly grain stocks report. That report was expected to be generally bearish. However, the corn data was bullish and did produce big gains in corn, including follow-through buying today. It now appears a major low is in place in the corn market. The USDA wheat data was bearish on Friday. However, I cannot see wheat and corn pulling in divergent paths, and with corn being arguably the strongest market of the two, I suspect wheat may also be close to a market low. The USDA soybean data was mildly bearish Friday. Corn and soybean traders continue to keep an eye on South American weather, but so far it has not been significantly worrisome for the crops.