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Jim Wyckoff's Morning Report: Markets Weaker Overnight

05 September 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The world market place is quieter and on hold Thursday morning, as there were no major economic or geopolitical developments overnight, and as major world economic data is on deck.

The Bank Japan kept its monetary policy steady at Thursday’s meeting, which was expected. The Bank of England and European Central Bank were holding their monthly monetary policy meetings on Thursday. Both were expected to make no major adjustments to their policies.

However, as usual the wording of the central banks’ statements will be closely scrutinized for clues on future monetary policy direction.

Also, Thursday marks the beginning of the G-20 political and finance ministers meeting in Russia.

There is a big batch of U.S. economic data due for release Thursday, including the weekly jobless claims report, the Challenger job-cut report, the ADP national employment report, revised productivity and costs, manufacturing shipments, orders and inventories, the global services PMI, the weekly DOE liquid energy stocks report, ICSC chain store sales trends, and the ISM non-manufacturing report.

However, the big economic news of the week and of the month will be Friday morning’s U.S. jobs report. Many market watchers believe Friday’s jobs data will tip the Federal Reserve’s hand on when the “tapering” of U.S. monetary policy will begin. Forecasts call for the key U.S. non-farm jobs number to come in at up 175,000 in August.

The overall unemployment rate is expected to be unchanged from July, at 7.4%. The market place is still concerned regarding the U.S. threat to attack Syria after the Assad regime allegedly used chemical weapons against Syrian citizens.

However, the aforementioned economic data is presently dominating focus of the market place. The U.S. Congress is mostly backing President Obama on his notion to use U.S. firepower to strike Syria. It is unlikely a U.S. military strike will occur this week, as congressional debate and voting on the matter will not be completed likely until sometime next week.--Jim

U.S. Dollar Index

The September U.S. dollar index is near steady early Thursday. Bulls still have a bit of near-term technical momentum on their side. Slow stochastics for the dollar index are bearish early today.

The dollar index finds shorter-term technical resistance at the overnight high of 82.685 and then at this week’s high of 82.970. Shorter-term support is seen at this week’s low of 82.350 and then at 82.260. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

October Nymex crude oil prices are firmer early today. Crude bulls have the overall near-term technical advantage, amid upbeat economic data coming out of the world’s major countries, and amid the Syria tensions. In October Nymex crude, look for buy stops to reside just above resistance at the overnight high of $108.04 and then at this week’s high of $108.83. Look for sell stops just below technical support at $107.00 and then at $106.77. Wyckoff's Intra-Day Market Rating: 5.5

Grains

Markets were weaker overnight, with soybeans again leading losses. The soybean market had been the leader on the upside, but bean bulls have faded badly.

Corn and wheat bears remain in firm technical command. While the extended weather forecasts for the U.S. Corn Belt call for very warm and dry conditions in the region, it appears the late-summer weather market has played out in the grain futures markets.

It appears yield damage to the crops has already been mostly factored into present prices. For grain market prices to gain more upside in the near term, some new fundamental news will have to occur.

Maybe that will come from the demand side, or from actual yield results once the corn and soybean harvests begin in earnest. The grains could also react to key “outside market” forces in the near term.

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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