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Jim Wyckoff's Morning Report: Investors Await Committee Meeting Results

29 October 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - It is a quieter trading week so far as traders and investors are awaiting the results of the US Federal Reserve’s Open Market Committee meeting.

The meeting begins Tuesday and ends Wednesday at midday. The FOMC is expected to leave U.S.
monetary policy unchanged, but as usual traders and investors will be closely parsing the FOMC statement, looking for any clues on the timing of upcoming changes in policy. Most in the market place believe the Fed will not start to cut back on its monthly bond purchases until early next year—most likely the second quarter at the earliest. 

This scenario favors the raw commodity market bulls, including the precious metals markets. Any hints at this week’s FOMC meeting that the “tapering” of monetary policy could come sooner than the second quarter of 2014 would likely be bearish for most markets. There is a heavy slate of U.S. economic data due for release Tuesday, which could move the markets. The data includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the producer price index, advance retail sales, the S&P/Case-Shiller home price index, manufacturing and trade inventories, and the consumer confidence index.

US Dollar Index

The December U.S. dollar index is higher early today on more short covering in a bear market. Bears remain in overall near-term technical control. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 79.750 and then at 80.000. Shorter-term support is seen at the overnight low of 79.355 and then at Monday’s low of 79.205. Wyckoff's Intra Day Market Rating: 5.5

NYMEX Crude Oil

December Nymex crude oil prices are lower early today. Bears have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at Monday’s high of $98.82 and then at $99.00. Look for sell stops just below technical support at $97.37 and then at $97.00. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were narrowly mixed overnight. There has been very good U.S. harvest progress, as reported by the weekly USDA crop progress reports out late Monday. That’s big bearish element that is limiting the upside in corn and soybeans.

The weakness in corn and soybeans is spilling over into the wheat market. Rain is coming to the Corn Belt in the coming days, which will delay harvesting. Technically, the corn bears are in firm command, soybean bulls and bears are now on a level near-term technical playing field and wheat bulls still have the slight near-term technical advantage but need to show fresh power soon to keep it.

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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