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Jim Wyckoff's Morning Report: Markets Mixed Overnight

16 September 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Many markets posted modest relief rallies Monday on the surprise weekend news that former U.S. Treasury secretary Larry Summers withdrew his name for consideration for chairman of the U.S.

Federal Reserve, due to the likely acrimony his nomination would have brought. Many reckoned Summers was President Obama’s first choice for the Fed chief. Many markets were cheered on the news on ideas Summers would have been a bit more hawkish on monetary policy than would current Fed vice chair Janet Yellen, who is now widely believed to be next in line to lead the Federal Reserve.

The other factor that has put more risk appetite into the market place is the weekend agreement by the U.S. and Russia on a plan for the international community to take over Syria’s chemical weapons stockpiles.

The risk of a U.S. military strike against Syria is presently very low, whereas two weeks ago it seemed imminent the U.S. would attack the Syrian regime.

Traders and investors are looking forward to this week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC).

The meeting begins on Tuesday and ends at midday Wednesday. A 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.

Some reckon the Fed will announce a $10 billion or $15 billion reduction in its $85 billion-a-month bond-buying program.

The surprise to the markets could be if the Fed either does nothing at this meeting, or is more aggressive in its initial reduction in bond purchases.

For the past several weeks the market place has been fixated on what the U.S. central bank will announce at the conclusion of this week’s FOMC meeting.U.S. economic data due for release Monday includes the Empire State manufacturing survey, and industrial production and capacity utilization.--Jim

U.S. Dollar Index

The September U.S. dollar index is solidly lower early today and hit a fresh four-week low overnight. Bulls continue to weaken, technically. Slow stochastics for the dollar index
are bearish early today.

The dollar index finds shorter-term technical resistance at 81.500 and then at 81.750. Shorter-term support is seen at the overnight low of 81.185 and then at the June low of 80.949. Wyckoff's Intra Day Market Rating: 4.0

NYMEX Crude Oil

October Nymex crude oil prices are solidly lower early today. Crude oil bulls still have the overall near-term technical advantage. Prices are in a five-month-old uptrend on the daily bar chart. In October Nymex crude, look for buy stops to reside just above resistance at $107.00 and then at $107.50. Look for sell stops just below technical support at last week’s low of $106.39 and then at $106.00. Wyckoff's Intra-Day Market Rating: 4.0

Grains

Markets were mixed overnight. Soybeans were solidly lower and corn and wheat were slightly higher.

Focus is on early yield reports on the harvesting of the U.S. corn and soybean crops in the Corn Belt—and on any fresh export demand for U.S. grains. Soybean bulls still have the near-term technical advantage.

Corn and wheat bears remain in firm technical command. My bias remains that while corn is
still fully technically bearish, the price downside is limited at the present low levels.

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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