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Jim Wyckoff's Morning Report: Weak Manufacturing Data Affects Global Markets

23 April 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news there was weak German manufacturing data released Tuesday that bolsters arguments the European Central Bank will lower interest rates at next week’s ECB policy meeting.

Markit’s German purchasing managers index fell to 48.8 in April from 50.6 in March. The German data pushed the Euro currency to a two-week low.

There was also weaker-than-expected manufacturing data coming out of China Tuesday. The HSBC purchasing managers’ index came in at 50.5 in April versus 51.6 in March. Asian stock markets dropped on the China news.

The German and China data also added selling pressure to the raw commodity sector, including the
precious metals markets.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P/Case-Shiller home price index, the ISM Chicago business survey, the ISM semiannual report on business and the economy, and the consumer confidence index. -Jim

U.S. Dollar Index

The U.S. dollar index is higher in early U.S. trading and hit a two-week high overnight. The bulls have the overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today.

The dollar index finds shorter-term technical resistance at the overnight high of 83.180 and then at 83.420. Shorter-term support is seen at the overnight low of 82.650 and then at 82.500. Wyckoff's Intra Day Market Rating: 6.0

NYMEX Crude Oil

Crude oil prices are weaker early today. Bears have the near-term technical advantage. A big and bearish pennant pattern may be forming on the daily bar chart.

In June Nymex crude, look for buy stops to reside just above resistance at $89.00 and then at Monday’s high of $89.48. Look for sell stops just below technical support at $88.00 and then at Monday’s low of $87.69. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were mixed overnight. The key “outside markets” are bearish for the grains early Tuesday, as the U.S. dollar index is higher and crude oil prices are weaker.

Recent moisture in the U.S. Corn Belt and Plains states is a bearish factor for grains, even though it has caused early corn-planting delays. However, there is drier weather forecast for the U.S. Corn Belt later this week.

The grain market bears continue to hold the near-term advantage on
the charts.

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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