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Jim Wyckoff's Morning Report: Markets Firmer Overnight

26 July 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - It’s another quiet, summertime trading affair Friday morning. There has been a lack of major, market-moving news late this week.

Traders and investors are looking ahead to next week, when the U.S. Federal Open Market Committee meets and the U.S. employment report is released. With August right around the corner, trading volumes in many markets are likely to decline as summertime family vacations take many
traders away from the markets.

The European stock markets were weaker overnight as focus there is on corporate earnings. Asian stocks were mixed, with Japan’s Nikkei stock index down and China’s Shanhai were higher.

The International Monetary Fund (IMF) reported Friday that central banks in emerging market countries continued to add to their gold reserves in June.

Russia was also a buyer, while Germany was reported as a seller of gold last month. The gold market bulls who have done some bargain hunting at lower price levels recently have to feel pretty good about the fact that central banks of sovereign nations are doing the same. U.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey. - Jim

U.S. Dollar Index

The September U.S. dollar index is lower in early U.S. trading and hit a fresh five-week low overnight.

Bears have the overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today.

The dollar index finds shorter-term technical resistance at the overnight high of 81.915 and then at 82.000.

Shorter-term support is seen at the overnight low of 81.670 and then at 81.500. Wyckoff's Intra Day Market Rating: 4.0

NYMEX Crude Oil

Crude oil prices are lower again early today, on more profit taking. Bulls still have the overall near-term technical advantage, but are fading.

In September Nymex crude, look for buy stops to reside just above resistance at $105.00 and then at the overnight high of $105.63. Look for sell stops just below technical support at this week’s low of $104.08 and then at $103.00. Wyckoff's Intra-Day Market Rating: 4.0

Grains

Markets were narrowly mixed in overnight trading, on some short covering from recent strong selling pressure.

Corn and wheat futures are in strong bear markets, while soybeans have also entered bearish territory late this week.

The U.S. Corn Belt weather has turned benign for the corn and soybean crops, and that’s bearish. Cash corn and soybean basis levels in the central US have collapsed this week, which adds to the bearish tone in the futures markets.

The one bright spot in the grain markets at present is good world demand for U.S. grains. My bias is
that there is not strong downside price pressure left in the grain markets.

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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