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Jim Wyckoff's Morning Report: Markets Firmer Overnight

14 June 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Gold is seeing some mild safe-haven support on news President Obama has authorized the U.S. to provide arms to Syrian rebels.

This will escalate the Syrian situation that has already seen much bloodshed in that country. With U.S. arms being provided to the Syrian rebels, many will view the situation as a proxy war between the U.S. and Iran or between the U.S. and Russia.

Oil prices did hit a fresh three-week high on the news. Euro zone employment fell to its lowest level of workers in seven years, it was reported Friday.

Eurostat said the employment level in the Euro zone fell by 0.5% in the first quarter versus the fourth quarter of last year. Eurostat also said the annual inflation rate in the Euro zone rose to 1.4% in May versus 1.2% in April— still well below the European Central Banks target rate of 2% inflation.

The market place is awaiting next Wednesday’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC). Fed Chairman Bernanke will also hold a press conference following the meeting.

Traders and investors will be looking for fresh information from the Fed on when it will start to wind down its quantitative easing programs that have been in place for several years.

The Wall Street Journal reported Friday that it believes the Fed will gradually introduce its so-called “tapering” program and that interest rates will remain low for some time to come.

European and Asian stock markets were given a slight lift Friday, partly on the Wall Street Journal Fed story easing worries the Fed could sooner take more aggressive action on ending its easy money policies.

U.S. economic data due for release Friday includes the producer price index, Treasury international capital data, industrial production and capacity utilization and the University of Michigan consumer sentiment survey.--Jim

U.S. Dollar Index

The September U.S. dollar index is slightly higher in early U.S. trading, on short covering after hitting a four-month low on Thursday. Bears still have the near-term technical advantage. Slow stochastics for the dollar index are neutral early today.

The dollar index finds shorter-term technical resistance at Thursday’s high of 81.210 and then at 81.510.

Shorter-term support is seen at Thursday’s low of 80.710 and then at 80.500. Wyckoff's Intra Day Market Rating: 5.5

NYMEX Crude Oil

Crude oil prices are firmer early today and hit a fresh three-week high overnight. Bulls have gained the slight overall near-term technical advantage. In July Nymex crude, look for buy stops to reside just above resistance at the May high of $97.38 and then at $98.00.

Look for sell stops just below technical support at the overnight low of $96.42 and then at $96.00. Wyckoff's Intra-Day Market Rating: 5.5

Grains

Markets were mostly firmer in overnight trading, with soybeans and corn prices up and wheat down.

Soybean bulls still have the overall near-term technical advantage. Corn and wheat bears have the near-term technical edge.

Weather in the U.S. Corn Belt is presently benign for the markets but will remain a dominant fundamental factor for the grains in the near term. It is my bias that another weather scare will develop in the grain markets in the coming weeks.

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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