* LATEST MARKET DEVELOPMENTS *

Many markets posted modest relief rallies Monday on the surprise weekend news that former U.S. Treasury secretary Larry Summers withdrew his name for consideration for chairman of the U.S. Federal Reserve, due to the likely acrimony his nomination would have brought. Many reckoned Summers was President Obama’s first choice for the Fed chief. Many markets were cheered on the news on ideas Summers would have been a bit more hawkish on monetary policy than would current Fed vice chair Janet Yellen, who is now widely believed to be next in line to lead the Federal Reserve. The other factor that has put more risk appetite into the market place is the weekend agreement by the U.S. and Russia on a plan for the international community to take over Syria’s chemical weapons stockpiles. The risk of a U.S. military strike against Syria is presently very low, whereas two weeks ago it seemed imminent the U.S. would attack the Syrian regime. Traders and investors are looking forward to this week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC). The meeting begins on Tuesday and ends at midday Wednesday. A majority of the market place believes the U.S. central bank at next week’s meeting will announce it will begin to scale back, or “taper” its monthly bond-buying program. Some reckon the Fed will announce a $10 billion or $15 billion reduction in its $85 billion-a-month bond-buying program. The surprise to the markets could be if the Fed either does nothing at this meeting, or is more aggressive in its initial reduction in bond purchases. For the past several weeks the market place has been fixated on what the U.S. central bank will announce at the conclusion of this week’s FOMC meeting.U.S. economic data due for release Monday includes the Empire State manufacturing survey, and industrial production and capacity utilization.–Jim Wyckoff
 
U.S. STOCK INDEXES

S&P 500 futures: Prices are solidly higher early today and hit a fresh six-week high, on the Summers news. Bulls have the solid overall near-term technical advantage as prices hover near the all-time high. 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 to bullish early today. Today, shorter-term technical resistance comes in at the all-time high of 1,705.00 and then at 1,715.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,692.10 and then at 1,683.40. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 7.0

Nasdaq index futures: Prices are solidly higher early today and hit a fresh 12-year high overnight. The bulls have the solid overall near-term technical advantage. 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 to bullish early today. Shorter-term technical resistance is located at the overnight high of 3,213.25 and then at 3,225.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,189.25 and then at 3,176.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 7.5.

Dow futures: Prices are solidly higher and hit a fresh six-week high overnight, on the Summers news. Bulls have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at 15,500 and then at 15,550. Sell stops likely reside just below technical support at 15,400 and then at 15,350. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-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: 6.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are higher early today and hit a fresh two-week high, on heavy short covering following the Summers news. Bears still have the overall near-term technical advantage. 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 bullish early today. Shorter-term resistance lies at the overnight high of 132 16/32 and then at 133 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132 4/32 and then at 131 21/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
 
September U.S. T-Notes: Prices are solidly higher early today and hit a fresh four-week high overnight. Short covering is featured. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 124.16.0 and then at the overnight high of 124.25.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.05.0 and then at 124.00.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The September U.S. dollar index is solidly lower early today and hit a fresh four-week low overnight. Bulls continue to weaken, technically. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 81.500 and then at 81.750. Shorter-term support is seen at the overnight low of 81.185 and then at the June low of 80.949. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

October Nymex crude oil prices are solidly lower early today. Crude oil bulls still have the overall near-term technical advantage. Prices are in a five-month-old uptrend on the daily bar chart. In October Nymex crude, look for buy stops to reside just above resistance at $107.00 and then at $107.50. Look for sell stops just below technical support at last week’s low of $106.39 and then at $106.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed overnight. Soybeans were solidly lower and corn and wheat were slightly higher. Focus is on early yield reports on the harvesting of the U.S. corn and soybean crops in the Corn Belt—and on any fresh export demand for U.S. grains. Soybean bulls still have the near-term technical advantage. Corn and wheat bears remain in firm technical command. My bias remains that while corn is still fully technically bearish, the price downside is limited at the present low levels.