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Jim Wyckoff's Morning Report: Markets 'On Hold' Awaiting US Data

01 May 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The market place is ostensibly on hold early Wednesday morning, ahead of a heavy slate of U.S. economic data due out Wednesday, including the afternoon release of the FOMC statement.

The Federal Reserve’s policy-making committee is holding a two-day meeting that began Tuesday morning. Most do not expect the FOMC to make adjustments in its monetary policy.

However, the wording of the FOMC statement will be closely scrutinized for clues of upcoming Fed policy actions, including if and when to start to wind down its quantitative easing program. Many expect the European Central Bank to cut interest rates when it holds its monthly meeting on Thursday.

Recent weak EU economic data makes the case for such action by the ECB. Much of Asia and Europe celebrated public holidays Wednesday, which made for quieter dealings overnight. China did report its official manufacturing PMI came in lower than expected, at 50.6 in April versus the March reading of 50.9.

The weaker-than-forecast China PMI did help to put some downside price pressure on the raw commodity markets overnight, including gold and silver. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. manufacturing PMI, construction spending, the ISM manufacturing report on business, the weekly DOE energy stocks report, domestic auto sales and the FOMC statement. -Jim

US Dollar Index

The U.S. dollar index is lower in early U.S. trading and hit a fresh nine-week low overnight. The bulls have faded badly recently. Slow stochastics for the dollar index are bearish early today.

The dollar index finds shorter-term technical resistance at the overnight high of 81.78 and then at
82.000. Shorter-term support is seen at 81.500 and then at 81.250. Wyckoff's Intra Day Market Rating: 4.0

NYMEX Crude Oil

Crude oil prices are lower early today on some profit taking and a corrective pullback from recent solid gains.

In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $93.26 and then at $94.00. Look for sell stops just below technical support at
$92.00 and then at $91.50. Wyckoff's Intra-Day Market Rating: 4.0

Grains

Markets were lower in overnight trading. Lower crude oil prices and weaker China manufacturing data helped to weigh on the grains. Rains and cold temperatures in the forecast for the U.S. Corn Belt in the coming days will limit the downside in corn prices.

Corn is also seeing technical consolidation on the charts. Wheat and soybean bulls still have some upside near-term technical momentum on their side. The U.S. hard red winter wheat crop is in bad shape, while light farmer selling in the U.S. cash market supports soybean futures prices.

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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