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Jim Wyckoff's Morning Report: Markets Mostly Firmer Overnight

22 July 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - It’s a “risk-on” trading day in the market place early Monday, as the U.S. dollar index is under selling pressure while crude oil and gold prices are posting gains.

It appears U.S. Federal Reserve Chairman Ben Bernanke has made progress in convincing the market place that its monetary policy will remain very accommodative for some time to come.

The commodity markets are also seeing some buying support coming from last Friday’s move by China’s central bank to lower the interest rate floor on China’s banks’ lending rates.

Just a few weeks ago a liquidity crunch in China’s banking system spooked the world market place. European stocks were mostly weaker in subdued summertime trading Monday, while Asian stock markets were mostly firmer.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and existing home sales. - Jim

U.S. Dollar Index

The September U.S. dollar index is lower and hit a four-week low in early U.S. trading. Bulls have faded badly.

Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 82.50 and then at the overnight high of 82.740. Shorter-term support is seen at the overnight low of 82.365 and then at 82.000. Wyckoff's Intra Day Market Rating: 4.0

NYMEX Crude Oil

Crude oil prices are higher early today and hovering near a 14-month high. Nymex WTI prices pushed above Brent crude prices for the first time in a long time.

Bulls have upside near-term technical momentum. In September Nymex crude, look for buy stops to reside just above resistance at last week’s high of $108.93 and then at $109.00. Look for sell stops
just below technical support at the overnight low of $107.88 and then at $106.91. Wyckoff's Intra-Day Market Rating: 6.0

Grains

Markets were mixed but mostly firmer in overnight trading. The U.S. Corn Belt received only spotty rains during the weekend, but more rain chances are in the forecast for this week, along with cooler temperatures.

Traders are giving the present weather patterns and the forecast for the Corn Belt a slightly bearish read. Still, recent Corn Belt weather forecasts have seen a trend of actual rainfall amounts not meeting forecast expectations. Corn is now in its critical pollination period in much of the Corn Belt.

The key “outside markets” have turned to a bullish posture for the grains, as the U.S. dollar index has weakened and crude oil prices are trending higher.

TheCropSite News Desk

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