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Jim Wyckoff's Morning Report: Markets Weaker Overnight

05 August 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news the HSBC China services purchasing managers index reading was steady in July versus June, at 51.3.

A PMI above 50.0 suggests economic expansion. Later this week China trade and industrial production data will be released and will be closely scrutinized by the market place.

The Markit company Euro zone composite purchasing managers index rose to 50.5 in July from 48.7 in June.

That’s the first reading above 50.0 since January of 2012. The better PMI reading adds to a string of slightly improving economic data coming out of the European Union.

Traders and investors have pretty much digested last Friday’s U.S. employment report that showed slightly weaker jobs growth than expectations, and added more uncertainty regarding when the Federal Reserve could start to “taper” its monthly bond-buying program, also known as quantitative easing.

U.S. economic data due for release Monday includes the employment trends index, the ISM non-manufacturing report on business, and the global servicers PMI. - Jim

U.S. Dollar Index

The September U.S. dollar index is slightly higher in early U.S. trading, on short covering. Bears still have the overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today.

The dollar index finds shorter-term technical resistance at the overnight high of 82.120 and then at 82.250. Shorter-term support is seen at the overnight low of 81.810 and then at last week’s low of 81.480. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

Crude oil prices are lower early today on some profit taking from recent gains. Bulls still have the overall near-term technical advantage.

However, if prices continue to back off this week a bearish double-top reversal pattern would form on the daily bar chart. In September Nymex crude, look for buy stops to reside just above resistance at $106.50 and then at $107.00. Look for sell stops just below technical support at $105.00 and then at $104.50. Wyckoff's Intra-Day Market Rating: 4.0

Grains

Markets were weaker in overnight trading. The grain market bears are still in firm near-term command.

The U.S. Corn Belt weather remains non-threatening for the corn and soybean crops and that remains fully bearish.

The next major data points for the grain markets are likely to be the monthly USDA supply and demand report and the Pro Farmer Midwest crop tour.

TheCropSite News Desk

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