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Jim Wyckoff's Morning Report: Markets Narrowly-mixed Overnight

24 October 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news, the preliminary HSBC China manufacturing PMI came in better than expected and hit a seven-month high of 50.9 in October versus the final PMI reading of 50.2 in September.

A reading above 50.0 suggests economic expansion. While the PMI report was deemed upbeat by Asian market watchers, the overhanging worry of rising short-term interest rates in China muted bullishness.

An overheating housing market in China and the rising short-term interest rates are sparking fears the Chinese central bank could tighten monetary policy, which in turn could reduce demand for raw commodities coming from China.

In the European Union, its manufacturing and services PMI report came in weaker than expected, at 51.5 in October versus 52.2 in September.

The report caused the Euro currency to backed down from its 23-month high scored against the U.S. dollar earlier in the session.

Reports from Asia say consumer demand for physical gold is on the rise, what with holiday seasons approaching.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the trade deficit report, the flash manufacturing PMI, and the Kansas City Fed business survey.--Jim

U.S. Dollar Index

The December U.S. dollar index is weaker early today and hit another contract low overnight. Bears remain in strong overall near-term technical control.

Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 79.375 and then at 79.500.

Shorter-term support is seen at the overnight contract low of 79.135 and then at 79.000. Wyckoff's Intra Day Market Rating: 4.0

NYMEX Crude Oil

December Nymex crude oil prices are firmer early today and seeing short covering after hitting a nearly four-month low on Wednesday.

Bears still have the solid overall near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart.

In December Nymex crude, look for buy stops to reside just above resistance at the overnight high of $97.69 and then at Wednesday’s high of $98.29. Look for sell stops just below technical support at the overnight low of $97.00 and then at Wednesday’s low of $96.16. Wyckoff's Intra-Day Market Rating: 5.0

Grains

Markets were narrowly mixed overnight. Traders are awaiting this morning’s weekly USDA export sales report to get a gauge on world demand for U.S. grains.

Harvest progress in the U.S. Corn Belt remains a seasonally bearish market factor for corn and soybeans.

Wheat remains supported by concerns about the Russian wheat crop and some problems in other wheat-producing regions of the world.

Technically, the corn bears are in firm command, soybean bulls now have the near-term technical edge, and wheat bulls also have the near-term technical advantage.

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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