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Jim Wyckoff's Morning Report: Lower World Economic Growth Forecast

18 April 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Gold and crude oil prices were under strong selling pressure in Asian trading Thursday, but then posted a solid recovery during European trading hours.

The International Monetary Fund this week forecast lower world economic growth, in the latest signal that the major economies of the world continue to sputter, or only see tepid growth. Low inflation readings in the major world economies are also a bearish factor for the beaten-down raw commodity sector.

Asian stock markets were lower overnight amid the sell-off in the raw commodity sector during Asian trading hours. European stock markets rose Thursday, boosted by a successful auction of Spanish government bonds.

There is a Group of 20 meeting in Washington, D.C. that begins Thursday. The market place will
pay close attention to any proclamations regarding foreign exchange rate, financial and/or economic policies coming out of the confab.

Reports overnight said the big investment fund BlackRock has done some bargain hunting and purchased gold this week. U.S. economic data due for release Thursday includes the weekly jobless claims report, leading economic indicators, and the Philadelphia Fed business outlook survey. -Jim

US Dollar Index

The U.S. dollar index is lower in early U.S. trading, on a corrective pullback from Wednesday’s strong gains. The index has turned choppy recently but the bulls on Wednesday did regain upside near-term technical momentum.

Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at Wednesday’s high of 82.815 and then at 83.000. Shorter-term support is seen at 82.500 and then at 82.250. Wyckoff's Intra Day Market Rating: 4.5

NYMEX Crude Oil

Crude oil prices are higher early today after hitting a fresh 9.5-month low of $85.61 in Asian trading today.

Bears still have downside near-term technical momentum. In May 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 $86.06. Wyckoff's Intra-Day Market Rating: 6.0

Grains

Markets were firmer overnight. Recent moisture in the U.S. Corn Belt and Plains states is turning from a bearish underlying factor for grains, to a bullish factor for corn.

The specter of corn-planting delays is now likely this spring. The corn-planting delay issue will likely be a major market factor when trading gets under way next week, if not sooner. Grain traders will continue to look to the outside markets for direction, especially given the volatile trading seen in crude oil and gold recently.

TheCropSite News Desk

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.



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