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Jim Wyckoff's Morning Report: Markets Lower in Overnight Trading

20 August 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - While the market place can still be characterized as quieter, summertime trading conditions, the recent sharp drops in the Indian Rupee and the Indonesian Rupiah currencies is becoming an increasing concern to the market place.

European stock markets were lower Tuesday, partly on worries about an “Asian contagion” situation that has in the past roiled markets worldwide. Rising interest rates in the major world economies has put pressure on the periphery currencies.

The higher rates in the major economies have started to reverse the flows of investor monies that had been moving into the periphery country markets the past few years.

Key data points this week will be the Federal Reserve’s FOMC minutes that are released Wednesday and some Chinese economic data on Thursday.

Traders will be looking at the minutes for some clarity on the near future path of U.S. monetary policy.

There is a world central bankers meeting in Wyoming at mid-week, but Fed Chairman Bernanke will not even attend it and no major proclamations are expected to come out of that event. Traders and investors are still watching the Egypt unrest, which continues to see violence between citizens and government militia.

Any escalation in violence is likely to impact the market place, and could prompt a rise in demand for safe-haven assets, including gold. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the Chicago Fed national activity index.--Jim

U.S. Dollar Index

The September U.S. dollar index is lower in early U.S. trading. The bears have the overall near-term technical advantage.

Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.38 and then at 81.500. Shorter-term support is seen at the overnight low of 80.980 and then at the August low of 80.895. Wyckoff's Intra Day Market Rating: 4.0

NYMEX Crude Oil

October Nymex crude oil prices are lower early today on more profit taking from recent gains. Bulls still have the overall near-term technical advantage.

In October Nymex crude, look for buy stops to reside just above resistance at $107.00 and then at the contract high of $107.95.

Look for sell stops just below technical support at the overnight low of $105.51 and then at $105.00. Wyckoff's Intra-Day Market Rating: 4.0

Grains

Markets were lower in overnight trading, on corrective pullbacks from recent gains. A weather market has developed in the grains—especially for soybeans.

The western U.S. Corn Belt has seen portions remain very dry for weeks. The solid gains in corn suggest that market has put in a bottom. For soybeans, the strong gains suggest prices can continue to trend sideways to higher in the near term.

Wheat will follow the corn market. The Pro Farmer Midwest Crop Tour is in progress and the grain markets will watch daily results.

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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