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Jim Wyckoff's Morning Report: Markets Mixed Overnight

17 July 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The world market place is on hold ahead of Wednesday morning’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 are looking for the Fed chief to 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. Bernanke and the Fed have been significant markets-movers in recent months. 

European stocks were modestly lower Wednesday, on ideas Bernanke’s remarks Wednesday will not be bullish for equities. Asian stocks were mixed in subdued trading Wednesday, ahead of the Bernanke testimony to U.S. lawmakers.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, the weekly DOE liquid energy stocks report, and the Federal Reserve’s beige book. - Jim

U.S. Dollar Index

The September U.S. dollar index is slightly higher in early U.S. trading as bulls have faded. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.910 and then at Tuesday’s high of 83.270.

Shorter-term support is seen at this week’s low of 82.525 and then at 82.250. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

Crude oil prices are slightly lower early today. Bulls still have upside near-term technical momentum as prices hover near a 14-month high. In August Nymex crude, look for buy stops to reside just above resistance at $106.00 and then at $107.00.

Look for sell stops just below technical support at the overnight low of $105.11 and then at this week’s low of $104.65. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were narrowly mixed but mostly weaker in overnight trading. Weather forecasts for the U.S. Corn Belt remain the dominant market factor in the grains. Updated forecasts Wednesday will drive the grain markets.

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 now at its critical pollination period in much of the Corn Belt.

Grain markets could also be impacted by today’s Bernanke testimony to U.S. lawmakers, if other key “outside markets” are also impacted significantly.

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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