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Jim Wyckoff's Morning Report: Markets Narrowly Mixed Overnight

07 October 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Asian and European markets were mostly weaker overnight, with U.S. stock indexes solidly lower in early electronic trading Monday, as the partial U.S. government shutdown enters its seventh day with still no end in sight.

Now the market place is wondering if and when credit rating agencies will downgrade the U.S. government’s credit rating.

Such could accelerate trader and investor anxieties. While there is growing unease in the world market place there is still not yet panic.

However, as this situation drags on anxiety will continue to increase. Soon the U.S. government will
also hit its debt ceiling.

If that important matter cannot be agreed upon by U.S. lawmakers in a timely manner, then it
could be a much bigger event for the market place than the current budget impasse.

Russian President Putin and the German Bundesbank on Monday warned that President Obama needs to overcome the government debt/budget crisis very soon, or else the matter will start to impact other world economies.

If risk aversion in the market place continues to increase, the odds will grow that daily price volatility will increase in many markets.

Fresh U.S. budget news coming out of Washington Monday could be market-sensitive. The World Bank and International Monetary Fund hold annual meetings in Washington, D.C., at the end of this week.

It would be at the very least awkward to see the host nation and the world’s leading economy and military hobbled by a government shutdown in effect. Any proclamations or overtures made by the U.S. at the meeting would be somewhat discounted by the inability of U.S. lawmakers to agree on a spending budget.

China’s Golden Week holiday season is winding down and the world’s second-largest economy will be back at work in full force on Tuesday. The market place is keeping an eye on violence in Egypt that killed dozens in Cairo over the weekend.

U.S. economic data due for release Monday includes consumer installment credit. A lack of fresh U.S. government economic data is also an underlying bearish factor for many markets, due to the uncertainty of the situation and no fresh indicators to gauge the U.S. economy’s health.--Jim

U.S. Dollar Index

The December U.S. dollar index is weaker early today. Bears remain in firm overall near-term technical command.

Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at Friday’s high of 80.285 and then at 80.500. Shorter-term support is seen at 80.000 and then at last week’s low of 79.720. Wyckoff's Intra Day Market Rating: 4.5

NYMEX Crude Oil

November Nymex crude oil prices are lower early today. Bulls and bears are on a level near-term technical playing field.

In November Nymex crude, look for buy stops to reside just above resistance at the overnight high of $103.59 and then at $104.00. Look for sell stops just below technical support at the overnight low of $102.50 and then at $102.00. Wyckoff's Intra-Day Market Rating: 4.0

Grains

Markets were narrowly mixed overnight. The “risk-off” mentality in the overall market place at present is a mildly bearish underlying factor for all of the grains.

U.S. harvest of soybeans and corn has been delayed in much of the Corn Belt due to weekend rains, and that is just a bit bullish for those markets.

With much of USDA closed, there is a keen lack of fresh fundamental news for grain traders to digest, and that favors the bearish camp due to the uncertainty of the matter. All of the above suggests sideways and choppy trading conditions in the grains this week.

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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