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Jim Wyckoff's Morning Report: US Still to Decide on Syria

30 August 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Notions of an imminent U.S. military attack on Syria have receded significantly the past 48 hours, as U.S. allies are backing away from supporting or participating in such an endeavor.

The U.S.’s staunchest ally, the U.K., saw its parliament late Thursday vote down U.K. use of force against the Syrian regime.

Now, the U.S. must decide if it will go it alone on a military operation against Syria and risk the resulting consequences, or back off its threats and risk another set of consequences for doing nothing.

This has the world market place a bit calmer than earlier this week, which in turn has put downside price pressure on safe-haven assets like gold and U.S. Treasuries.

There was a fresh batch of European Union economic data released overnight, most of which was upbeat.

The number of unemployed in the Euro zone in July fell for the second month in a row. However, the overall unemployment rate in the region was still an all-time high of 12.1%. Meantime Euro zone consumer inflation fell to 1.3% in August from 1.6% in July, on an annual basis.

Next week comes a slew of bond issuances from European Union countries. Those auctions will be closely scrutinized for investor demand.

The long U.S. Labor Day holiday weekend is approaching, so trading volumes in many markets Friday are likely to be light.

Friday is the last trading day of the month, too. However, once U.S. traders come back to work next Tuesday they will have a full plate of matters upon which to ponder.

There is an FOMC meeting in September, at which time many believe the U.S. Fed will decided to change its monetary policy.

The important U.S. jobs report is out on Friday, September 6. There is also a Group of 20 nations meeting next week. The U.S. congress returns from its summer recess in mid-September and will
immediately have to deal with pressing budget matters.

And, it’s likely that President Obama early this fall will name a new Federal Reserve chairman. U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.--Jim

U.S. Dollar Index

The September U.S. dollar index is near steady in early U.S. trading. Bulls have gained fresh near-term technical momentum as prices hit a four-week high on Thursday.

Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at Thursday’s high of 82.270 and then at 82.500. Shorter-term support is seen at 81.750 and then at 81.500. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

October Nymex crude oil prices are lower early today on more corrective downside pressure after hitting a more than two- year high on Wednesday.

Crude bulls still have the overall near-term technical advantage. However, the bulls may have become exhausted with this week’s big push higher in prices.

In October Nymex crude, look for buy stops to reside just above resistance at $109.00 and then at $110.00.

Look for sell stops just below technical support at $107.40 and then at the overnight low of $106.75. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were lower overnight. There are still hot temps and little rain chances in the U.S. Corn Belt weather forecasts for the next week.

That is still bullish for soybeans and corn. Wheat remains overall technically bearish, but will follow corn and soybeans if those markets continue to rally.

How the corn and soybean markets close today (near their weekly highs or near their weekly lows) will be a good clue on price direction in those markets in the coming weeks. Weekly closes near the middle of the weekly trading ranges would be insignificant.

Closes near the weekly highs would suggest more upside price potential this fall. Closes near the weekly lows could strongly suggest near-term market tops are already in place.

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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