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Jim Wyckoff's Morning Report: Markets Higher Overnight

19 August 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The “dog days” of summer are upon the market place to start the new trading week, as conditions are mostly calmer and quieter.

The exception is the sharp drop in the Indian Rupee currency overnight. The Rupee has been on a sharp downslide recently, which has the world market place paying attention but yet overly concerned.

There are a couple of key data points later this week: the release of the U.S. Federal Reserve’s FOMC minutes on Wednesday and China manufacturing data on Thursday. Traders and investors are still watching the Egypt unrest, which was violent over the weekend.

An escalation in violence is likely to impact the market place, and could prompt a rise in demand for safe-haven assets, including gold.

Of importance to the entire market place is the continued rise in government bond yields worldwide, with the U.S. 10-year note fetching 2.87% and the German 10-year bund yield at 1.91%.

Both rates are the highest in well over a year. The rising bond yields are an early clue that problematic inflation could creep back into the major world economies at some point down the road. There is no major U.S. economic data due for release Monday.--Jim

U.S. Dollar Index

The September U.S. dollar index is slightly lower in early U.S. trading. 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 81.415 and then at 81.500. Shorter-term support is seen at the overnight low of 81.170 and then at 81.000. Wyckoff's Intra Day Market Rating: 4.5

NYMEX Crude Oil

October Nymex crude oil prices are slightly lower early today on profit taking from recent gains. Bulls still have the solid overall near-term technical advantage.

In October Nymex crude, look for buy stops to reside just above resistance at Friday’s contract high of $107.95 and then at $108.50. Look for sell stops just below technical support at $106.00 and then at $105.50. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were higher in overnight trading, with soybeans leading the way. As summer winds down a weather market has developed in the grains—especially for soybeans.

The western U.S. Corn Belt has seen portions remain very dry for weeks. The solid gains in corn last week suggested that market has put in a bottom.

For soybeans, the strong gains suggest prices can continue to trend sideways to higher in the near term.

Wheat will follow corn. The Pro Farmer Midwest Crop Tour kicks off Monday, and the grain markets
will watch daily results.

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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