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Jim Wyckoff's Morning Report: Markets Weaker Overnight

16 August 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight developments, reports said hundreds of people have died the past few days in anti-government violence in Egypt.

The Muslim Brotherhood has called for mass protests as government officials have established a state of emergency in the country.

Government troops have reportedly shot citizens protesting in the streets. This news has helped to support the safe-haven gold market and may have helped put some downside pressure on the U.S. stock market Thursday.

The market place will continue to closely monitor this situation. Egypt controls the Suez Canal, through which a good percentage of the world’s oil traffic and other commerce flow.

In other news Friday, the European Union recorded a monthly consumer price index reading of down 0.5% in July versus June, but up 1.6% year-on-year.

This data suggests inflation is still not close to being problematic in the EU, despite years of aggressive monetary policy stimulus. U.S. economic data due for release Friday includes preliminary productivity and costs, new residential construction, and the University of Michigan consumer sentiment survey.

The U.S. stock index bulls have faded this week and technically bearish weekly low closes on Friday (today) would be an early clue the stock indexes have put in at least near-term market tops.--Jim

U.S. Dollar Index

The September U.S. dollar index is slightly higher in early U.S. trading, on a corrective bounce from solid losses Thursday.

The bears have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today.

The dollar index finds shorter-term technical resistance at the overnight high of 81.345 and then at
81.500. Shorter-term support is seen at the overnight low of 81.155 and then at 81.000. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

Crude oil prices are firmer early today. Bulls have the solid overall near-term technical advantage. In September Nymex crude, look for buy stops to reside just above resistance at this week’s high of $107.87 and then at the July high of $108.93. Look for sell stops just below technical support at $107.00 and then at $106.00. Wyckoff's Intra-Day Market Rating: 5.5

Grains

Markets were weaker in overnight trading, on a corrective pullback from gains seen Thursday. The solid gains in corn Thursday suggest that market has put in a bottom, or is very close to doing such.

For soybeans, the strong gains suggest prices can continue to trend sideways to higher in the near term. Wheat will follow corn. Recent export demand for U.S. grains has been good. Dry weather in parts of the U.S. Corn Belt is becoming a more bullish input for soybeans and to a lesser degree corn.

TheCropSite News Desk

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