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Jim Wyckoff's Morning Report: Markets Mixed Overnight

09 August 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - There was more upbeat Chinese economic data released overnight.

China industrial production rose in by 9.7% in July, year-on-year while inflation data remained tame, as the July consumer price index was up 2.7% year-on-year.

This data Friday follows the strong China data Thursday that showed China exports were up a much higher than expected 5.1% year-on-year in July, compared to a 3.1% drop in June.

Chinese imports rose by a much higher than expected 11%, year-on-year, it was reported Thursday.

The recent batch of stronger-than-expected Chinese economic data is a bullish underlying factor for the raw commodity sector, especially the base metals markets. U.S. economic data due for release Friday is light and includes the monthly wholesale trade report. - Jim

U.S. Dollar Index

The September U.S. dollar index is slightly higher in early U.S. trading. Bears still have the overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today.

The dollar index finds shorter-term technical resistance at the overnight high of 81.135 and then at 81.250.

Shorter-term support is seen at the overnight low of 80.970 and then at this week’s low of 80.895. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

Crude oil prices are firmer early today, on short covering. Bulls have the overall near-term technical advantage, but have faded this week.

A bearish double-top reversal pattern has formed on the daily bar chart. In September Nymex crude, look for buy stops to reside just above resistance at the overnight high of $104.82 and then at $105.00.

Look for sell stops just below technical support at $103.50 and then at $103.00. Wyckoff's Intra-Day Market Rating: 5.5

Grains

Markets were mixed but mostly firmer in overnight trading, on more short covering. There may be some heavier short covering and position evening during the day session Friday, and on Monday morning, ahead of the midday-Monday release of the monthly USDA supply and demand report, at
which time the government will update its estimate of the size of the U.S. corn and soybean crop this year.

Most traders reckon the USDA data on Monday will favor the bearish camp. However, it’s still my bias that there is not strong downside price pressure left in the grain markets, after their recent beating.

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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