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Jim Wyckoff's Morning Report: Investor Risk Appetite Boosted Worldwide

11 September 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The likelihood of a U.S. military attack on the Syrian regime continues to decrease this week, which has boosted investor risk appetite worldwide.

That’s bullish for world stock markets and most other markets—but bearish for safe-haven assets such as gold, U.S. Treasuries and German bonds. President Obama said in a speech to U.S. citizens Tuesday night that he has asked the Congress to postpone a vote on using military force against Syria, and said he has asked Secretary of State Kerry to meet with Russian officials, regarding the Russian overture to put Syria’s chemical weapons under international control. U.S. polls are showing U.S. citizens are becoming less and less in favor of a U.S. military operation against Syria’s regime.

However, in the  volatile Middle East there always seems to be trouble brewing—if not one place then another. The market place is again watching Egypt. In the Sinai Peninsula, three Egyptian soldiers were killed in two bomb explosions Wednesday. That news gave crude oil prices a brief, modest boost overnight. 

On the economic front, in another sign of rising world interest rates, German 10-year bond yields on Wednesday rose above 2.0% for the first time in nearly two years. A new bond auction saw the German 10-year yield hit 2.06%. The next important piece of U.S. economic news on the docket this week will be Thursday morning’s weekly jobless claims report. Many traders and investors are looking ahead to next week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC). A slight majority of the market place believes the U.S. central bank at next week’s meeting will announce it will begin to scale back, or “taper” its monthly bond-buying program. For the past several weeks the market lace has been fixated on what the U.S. central bank will announce at the conclusion of next week’s FOMC meeting. U.S. economic data due for release Wednesday includes the weekly mortgage applications survey, monthly wholesale trade, and the weekly DOE liquid energy stocks report.

US Dollar Index

The September U.S. dollar index is near steady early today. Bulls and bears are on an overall level near-term technical playing field as the bulls have faded just recently. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Tuesday’s high of 82.185 and then at 82.260. Shorter-term support is seen at this week’s low of 81.905 and then at 81.750. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

October Nymex crude oil prices are slightly weaker early today, on a corrective pullback and profit taking from recent gains and on lessening odds of a U.S. military attack on Syria’s regime. Crude oil bulls still have the overall near-term technical advantage. In October Nymex crude, look for buy stops to reside just above resistance at the overnight high of $108.00 and then at $109.00. Look for sell stops just below technical support at this week’s low of $106.39 and then at $106.00. Wyckoff's Intra-Day Market Rating: 5.0

Grains

Markets were slightly higher overnight on chart consolidation, short covering and position evening. Soybean bulls have the near-term technical advantage. Corn and wheat bears remain in firm technical command. Weather forecasts for the U.S. Corn Belt are now becoming less of market factor by the day. Yield damage to the corn and soybean crops by the late-summer drought has already been mostly factored into grain futures prices. For grain market prices to gain more upside in the near term, some new fundamental news will have to occur. Focus is on Thursday morning’s USDA monthly supply and demand report, at which time updated corn and soybean production forecasts will be given by USDA.

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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