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Jim Wyckoff's Morning Report: Markets Slightly Lower Overnight

27 August 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - It’s a “risk-off” day in the world market place Tuesday, as the US appears poised to take military action against Syria after the government regime used chemical weapons against its citizens.

Gold prices hit a fresh three-month high above $1,410 Tuesday, on safe-haven demand. Asian and European stock markets sold off and U.S. stock indexes are under pressure before the open Tuesday morning.

There are worries any U.S. intervention in Syria could escalate into further instability in the already volatile Middle East.

Emerging country financial markets and currencies are again seeing strains amid the risk aversion in the market place.

The Indian rupee hit another record low versus the U.S. dollar. In European Union news Tuesday, the German Ifo business confidence index rose for the fourth month in a row and to its highest level in over a year, to 107.5 in August from 106.2 in July.

This is yet another signal that the EU’s biggest economy is helping to pull the Euro zone out of economic recession. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the Chicago Fed Midwest manufacturing index, the consumer confidence index, the Richmond Fed business activity survey, and the Case-Shiller
home price index.--Jim

U.S. Dollar Index

The September U.S. dollar index is slightly higher in early U.S. trading, on more short covering. The 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 last Friday’s high of 81.700 and then at 82.000.

Shorter-term support is seen at the overnight low of 81.305 and then at last Friday’s low of 81.245. Wyckoff's Intra Day Market Rating: 5.5

NYMEX Crude Oil

October Nymex crude oil prices are solidly higher early today and hovering near the recent contract high.

The Middle East unrest is boosting oil. Crude bulls have the solid overall near-term technical advantage. In October Nymex crude, look for buy stops to reside just above resistance at the contract high of $107.95 and then at $108.50.

Look for sell stops just below technical support at $107.00 and then at $106.50. Wyckoff's Intra-Day Market Rating: 6.5

Grains

Markets were slightly lower overnight, on corrective price pullbacks from Monday’s sharp gains. Scorching heat and no rain are in the U.S. Corn Belt weather forecast for the next week.

That is very bullish for soybeans and corn. A major weather market is playing out in the grains. Corn and soybean yields potential will decline over the next week.

The technical postures of corn and soybeans have turned more bullish recently. Wheat remains overall technically bearish, but will follow corn and soybeans if those markets continue to rally.

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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