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Jim Wyckoff's Morning Report: EU Emerges from Six-quarter Recession

14 August 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news, the European Union has emerged from its six-quarter economic recession, EU data showed Wednesday.

The EU second-quarter GDP rose 0.3% from the first quarter. However, the year-on-year figure was down 0.7%.

The German government auctioned its 10-year bond Wednesday and it fetched a yield of 1.80%, which is the highest level in a year and a half.

That also suggests European investors have better feelings about the recovery of the European Union economy.

Recent EU data has shown slight improvement, overall. Traders are also awaiting more U.S. economic data this week. Many believe the 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.

Many also look for the Federal Reserve to announce it is “tapering” is bond buying at its next FOMC meeting in September.

The market place is keeping a close eye on developments in Egypt. Anti-government demonstrations in Cairo turned deadly Wednesday, with 10 civilians reportedly killed.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the producer price index, and the weekly DOE liquid energy stocks report. - Jim

U.S. Dollar Index

The September U.S. dollar index is slightly higher in early U.S. trading, on more short covering. While the bears still have the overall near-term technical advantage, the greenback bulls are having a good week this week.

Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 82.000 and then at 82.250.

Shorter-term support is seen at the overnight low of 81.745 and then at 81.500. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

Crude oil prices are weaker early today. Bulls still 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 $106.69 and then at this week’s high of $107.20.

Look for sell stops just below technical support at the overnight low of $105.92 and then at $105.00. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were mixed in overnight trading. Corn was slightly higher and soybeans and wheat were weaker.

Corn and soybean market bulls have quickly faded after the surprising bullish results of Monday’s monthly USDA supply and demand report.

Corn and wheat market bulls need to show fresh power yet this week, to avoid a fresh leg down in prices in the near term. Dry weather in parts of the U.S. Corn Belt is a bullish input for soybeans and to a lesser degree corn.

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.

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