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Jim Wyckoff's Morning Report: Markets Solidly Higher Overnight

16 July 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - There is a significant batch of U.S. economic data due out Tuesday that could move the markets.

Data due for release includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the consumer price index, Treasury international capital data, industrial production and capacity utilization, and the NAHB housing market index.

However, the world market place is looking ahead to Wednesday’s appearance by Federal Reserve Chairman Ben Bernanke before the U.S. House of Representatives, where he will report on U.S. monetary policy and the economy.

Traders hope the Fed chief will offer fresh clues on when the Fed will start to back off on its monthly bond-buying program (quantitative easing). Many are still thinking the Fed will do such later this year and as soon as September.

However, Bernanke in remarks last week hinted he wants QE to start to wind down later rather than sooner because he feels the U.S. economic recovery is still shaky. In overnight news, European Union imports and exports declined in May, suggesting the Euro zone will continue in economic contraction for yet another quarter, which would be the seventh straight. It was also reported Tuesday the German ZEW economic expectations index declined in July. - Jim

U.S. Dollar Index

The September U.S. dollar index is lower in early U.S. trading as bulls are fading. A bear flag may be forming on the daily bar chart.

Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 83.270 and then at 83.500. Shorter-term support is seen at the overnight low of 82.855 and then at last week’s low of
82.600. Wyckoff's Intra Day Market Rating: 4.0

NYMEX Crude Oil

Crude oil prices are slightly higher early today. Bulls have upside near-term technical momentum. In August Nymex crude, look for buy stops to reside just above resistance at the overnight high of $106.74 and then at last week’s high of $107.45.

Look for sell stops just below technical support at the overnight low of $105.91 and then at $105.00. Wyckoff's Intra-Day Market Rating: 5.5

Grains

Markets were solidly higher in overnight trading, on short covering and bargain hunting, and on surprising drops in corn and soybean crop ratings in the latest weekly USDA crop progress data, released late Monday afternoon.

Weather forecasts for the U.S. Corn Belt have moderated from late last week but are still calling for warm and drier conditions for the region, with only slight changes for scattered rainfall.

If rainfall and rainfall chances remain only spotty in the coming days, the weather concerns will once again quickly build in the corn and soybean markets. Corn is at or nearing its critical pollination period in much of the Corn Belt. Weather remains the major factor in the grain futures markets at present.

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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