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Jim Wyckoff's Morning Report: Anxious Marketplace Remains

04 September 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The market place is still anxious regarding the U.S. threat to attack Syria after the Assad regime allegedly used chemical weapons against Syrian citizens.

The U.S. Congress appears to be backing President Obama on his notion to use U.S. firepower to strike Syria.

Still, it appears unlikely that a U.S. strike will occur this week, as congressional debate and voting on the matter will not be completed likely until sometime next week. European and Asian stocks were weaker due in part to the worries regarding the Syrian situation.

However, losses in European stocks were limited by some more upbeat economic data coming out of the European Union.

The data company Markit reported EU business activity is on the upswing, as its PMI rose to 51.5 in August from 50.5 in July.

Interest rates continue to rise in the major economies of the world. German five-year notes fetched a 21-month high yield of 1.00% Wednesday. U.S. bond yields are also at two-plus year highs.

Such suggests growing world economies, which in turn is a bullish factor for the raw commodity sector, from a demand perspective. Major world economic data is just around the corner. The important U.S. jobs report is out on Friday.

The Bank Japan, Bank of England and European Central Bank hold their monthly monetary policy meetings on Thursday.

There is a Group of 20 nations meeting this week. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Goldman Sachs and Johnson Redbook retail sales surveys, the trade deficit report, the Fed’s beige book, the ISM New York business report, the IDB/TIPP economic optimism index, and domestic auto sales.--Jim

U.S. Dollar Index

The September U.S. dollar index is weaker on mild profit taking after hitting a six-week high on Tuesday.

Bulls still have some near-term technical momentum on their side. Slow stochastics for the dollar index are bearish early today.

The dollar index finds shorter-term technical resistance at the overnight high of 82.710 and then at Tuesday’s high of 82.970. Shorter-term support is seen at 82.315 and then at 82.185. Wyckoff's Intra Day Market Rating: 4.5

NYMEX Crude Oil

October Nymex crude oil prices are weaker early today on more corrective downside pressure after hitting a more than two-year high last week.

Crude bulls still have the overall near-term technical advantage. However, the bulls may have become exhausted with last week’s big push higher in prices.

In October Nymex crude, look for buy stops to reside just above resistance at Tuesday’s high of $108.83 and then at $109.00. Look for sell stops just below technical support at $107.50 and then at $107.00. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were lower overnight, with soybeans leading losses. The weather forecasts for the U.S. Corn Belt call for the next week to be very warm and dry in the region.

That is somewhat bullish for soybeans. But as the late-summer weather market plays out in the grain futures markets, it’s now the case of the damage to the crops already being mostly factored into present prices.

A bull market must be fed “fresh” fundamental inputs often, and the dry and warm weather in the Corn Belt is not fresh any more.

For grain market prices to gain more upside in the near term, some new fundamental news will have to occur.

Maybe that will come from the demand side, or from actual yield results once the corn and soybean harvests begin in earnest.

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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