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Jim Wyckoff's Morning Report: Market Place Awaits Data

13 August 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The market place is awaiting a slew of U.S. economic data being released this week, starting out with retail sales on Tuesday.

Many believe this week’s U.S. data will show an improving U.S. economy, one that is possibly strong enough to begin to wean it from the Fed’s monthly bond-buying program, also known as quantitative easing.

In the European Union industrial output rose by 0.7% from May to June. In the second quarter, output was up 1.1% from the first quarter.

The closely watched German ZEW economic expectations index for August came in at 42.0 versus 36.3 in July.

The data hints the Euro zone economy is also on the upswing. Recent news reports cite a significant increase in demand for physical gold coming out of China.

Demand for gold from Chinese consumers hit a record of 385.5 metric tons in the second quarter, according to a Chinese trade group.

The reports also said China is poised to take over leadership from India as the world’s leading consumer of gold.

Consumer demand for physical gold from India is also on the upswing, the reports said. Also, India has again raised its import taxes on gold and silver in an effort to curb its current-account deficit.

U.S. economic data due for release Tuesday includes the retail sales report, the NFIB index of small business optimism, the weekly Goldman Sachs and Johnson Redbook retail sales reports, import and export prices, manufacturing and trade inventories and sales.

Atlanta Fed president Dennis Lockhart also speaks at a Kiwanis meeting Tuesday. - Jim

U.S. Dollar Index

The September U.S. dollar index is higher in early U.S. trading, on more 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 81.750 and then at 82.000. Shorter-term support is seen at the overnight low of 81.435 and then at Monday’s low of 81.110. Wyckoff's Intra Day Market Rating: 6.0

NYMEX Crude Oil

Crude oil prices are slightly higher early today. Bulls have the overall near-term technical advantage.

In September Nymex crude, look for buy stops to reside just above resistance at the overnight high of $107.20 and then at $108.00.

Look for sell stops just below technical support at the overnight low of $105.95 and then at $105.00. Wyckoff's Intra-Day Market Rating: 5.5

Grains

Markets were firmer in overnight trading. Grain traders are still digesting the surprising results of Monday’s monthly USDA supply and demand report. The government forecast the size of the U.S. corn and soybean crops at lower levels than a month ago.

Most traders had reckoned the USDA would slightly raise the size of the U.S. corn crop.

Given Monday’s upside price action in corn and soybeans, gains in those markets today would suggest they have put in at least near-term lows, if not major lows.

Wheat will remain a follower. Dry weather in parts of the U.S. Corn Belt is also a bullish input for corn and soybeans.

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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