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Jim Wyckoff's Morning Report: Results Expected from US Federal Reserve’s Open Market Committee

30 October 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Today is the day the market place gets the results of the U.S. Federal Reserve’s Open Market Committee meeting, which began Tuesday morning and ends Wednesday at midday.

There will be no press conference by Fed Chairman Bernanke after this meeting. The FOMC is expected to leave its very accommodative 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. The sense of the market place presently is that the Fed will not start to cut back on its monthly bond purchases (quantitative easing) until early next year— most likely the second quarter at the earliest. This scenario is bullish for the raw commodity market bulls, including the precious metals markets. However, any hints in the FOMC statement Wednesday afternoon that the “tapering” of monetary policy could come sooner than the second quarter of 2014 would likely be bearish for most markets. Any surprises coming from the FOMC statement Wednesday afternoon could cause brief volatility in many markets. There is also other key U.S. economic data due for release Wednesday, including the ADP national employment report, real earnings and the consumer price index. Economic data coming out of Europe this week has been mostly upbeat, but has also been overshadowed by anticipation ahead of the FOMC statement. 

The rise in short-term interest rates in China remains a bit of a worry to the world market place. China is the second- largest world economy and a voracious consumer of raw commodities. Any significant changes in Chinese monetary policy—especially tightening of it--would impact world
markets.

US Dolar Index

The December U.S. dollar index is slightly lower early today. 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 the overnight high of 79.755 and then at 80.000. Shorter-term support is seen at 79.500 and then at Tuesday’s low of 79.340. Wyckoff's Intra Day Market Rating: 4.5

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 the overnight high of $97.82 and then at Tuesday’s high of $98.57. Look for sell stops just below technical support at $97.00 and then at $96.50. Wyckoff's Intra-Day Market Rating: 4.0

Grains

Markets were firmer overnight on short covering following recent selling pressure. There has been very good U.S. harvest progress and that has been bearish for corn and soybeans. That weakness in corn and soybeans has spilled over into the wheat market. Rain is coming to the Corn Belt, which will delay harvesting, but not likely be a major market factor. Grain market traders continue to watch for fresh export demand for U.S. grains. Corn is getting cheap enough that it is drawing attention from world corn importers. Technically, the corn bears are in firm command, soybean bulls and bears are now on a level near-term technical playing field, while soybean and wheat bulls are
even.

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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