World Stock Markets Supported by Some Progress on U.S. Fiscal Cliff

* LATEST MARKET DEVELOPMENTS *

U.S. and world markets are quieter and trading volumes lower this week as the holidays and end of the year are right around the corner. Many traders are winding things down and stepping to the sidelines until January. Attention of the market place remains on the U.S. “fiscal cliff” tax increases and spending cuts that is fast approaching. On Monday there was movement on the Republican side toward more middle ground, which suggested both sides are coming closer to a deal. The market place reckons odds are higher than not that there will be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff. The overall situation has been a bearish drag on many markets, including the raw commodities and stock markets. In overnight news, Asian and European stock markets did push higher on the apparent progress on the U.S. fiscal cliff talks. Data from the European Union showed Spain’s local banks held a record amount of bad debt in October as overall loans dropped to a five-year low. This is a reminder of the major financial and economic problems that EU leaders face in the coming months. U.S. economic reports due for release Tuesday include the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the NAHB housing market index.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer in early trading today and hit a fresh two-month high overnight. Bulls have gained fresh upside momentum as a four-week-old uptrend is in place on the daily bar chart. 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 bullish early today. Today, shorter-term technical resistance comes in at 1,440.00 and then at 1,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,427.60 and then at 1,415.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are firmer early today. The shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at 2,687.50 and then at 2,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,662.25 and then at 2,650.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Dow futures: Prices are higher early today. Sell stops likely reside just below technical support at 13,184 and then at 13,150. Buy stops likely reside just above technical resistance at 13,240 and then at 13,300. 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are lower early today and hit a fresh six-week low overnight. Bulls have faded badly recently. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 147 8/32 and then 147 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 146 20/32 and then at the November low of 146 8/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

March U.S. T-Notes: Prices are weaker early today and hit a fresh six-week low overnight. Bulls are fading badly. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 132.12.5 and then at 132.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.04.0 and then at 132.00.0. 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 weaker in early U.S. trading today. Bulls have faded recently. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Monday’s high of 79.78 and then at 80.00. Shorter-term support is seen at last week’s low of 79.40 and then at the October low of 79.20. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are firmer early today. Bears still have the slight overall near-term technical advantage. In January Nymex crude, look for buy stops to reside just above resistance at $89.00 and then at $90.00. Look for sell stops just below technical support at $87.00 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were lower in overnight trading. The grain market bulls have faded recently amid slack demand for U.S. grains and a lack of fresh bullish fundamental news.