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Jim Wyckoff's Early Report: German Economy Showing Weakness

06 May 2013
Jim Wyckoff Commentary -  TheCropSite

In overnight news, London was closed for a public holiday, which made for quieter dealings in the foreign exchange market, writes Jim Wyckoff for TheCropSite.

The European Union overall purchasing managers’ index declined in April, but by less than forecast by economists. However, the German economy, the largest in the EU, is showing weakness.

The Markit composite PMI for the EU came in at 46.9 in April from 46.5 in March. A reading below 50.0 shows contraction in business activity. Israeli missile inside Syrian territory over the weekend have attracted the attention of the market place. Any escalation in that situation would likely prompt keener risk aversion in the world market place. U.S. economic data due for release Monday is light and includes the employment trends index.

U.S. DOLLAR INDEX

The U.S. dollar index is slightly higher in early U.S. trading. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.300 and then at 82.415. Shorter-term support is seen at the overnight low of 82.040 and then at Friday’s low of 81.835. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are slightly higher early today and did hit a fresh four-week high overnight. Bulls have regained upside momentum. In June Nymex crude, look for buy stops to reside just above resistance at last week’s high of $96.04 and then at $96.50. Look for sell stops just below technical support at the overnight low of $95.56 and then at $95.00. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were lower in overnight trading, led by corn. The U.S. Corn Belt did not see the weekend expectations for heavier rains in the region pan out, and the extended forecast now calls for drier and warmer weather. Thus, it appears a big chunk of the Corn Belt corn crop will get planted in the coming days. That’s bearish for corn, and corn is presently the leader in the grains complex.

Soybeans and wheat will follow the corn futures market early this week. Traders will closely examine Monday morning’s weekly USDA export inspections report.

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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