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Jim Wyckoff's Morning Report: Markets Narrowly Mixed Overnight

18 September 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - After weeks or even months of anticipation and speculation in the market place, today is the day many traders and investors have been eagerly awaiting.

Wednesday afternoon the market place gets the results of this week’s FOMC meeting, including a press conference by Fed Chairman Ben Bernanke.

Most hope the Fed will lay out the specific timing of a scaling back of its $85 billion-a-month bond-buying program, which is also called quantitative easing.

A majority of the market place believes the U.S. central bank will announce it will begin to scale back, or “taper” its monthly bond purchases by around $10 billion or $15 billion.

The surprise to the markets could be if the Fed either does nothing at this meeting, or is more aggressive in its initial reduction in bond purchases. Importantly, the FOMC on Wednesday will also update its forecasts for U.S. economic conditions in the coming months, which will also be closely examined by the market place.

Look for active trading in markets Wednesday afternoon after the FOMC information is out, including potential high volatility in some markets.

In other overnight news, European Union construction activity rose for the fourth month in a row in
July, at up 0.3% from June, but still down 1.2% from July of 2012. Germany led the rise, while Spain’s decline in construction activity weighed down the collective rise in activity.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, and the weekly DOE liquid energy stocks report.--Jim

U.S. Dollar Index

The September U.S. dollar index is near steady early today. Bulls are weakening, technically. Slow stochastics for the dollar index are bearish early today.

The dollar index finds shorter-term technical resistance at this week’s high of 81.505 and then at 81.750. Shorter-term support is seen at this week’s low of 81.135 and then at 81.000. Wyckoff's
Intra Day Market Rating: 5.0

NYMEX Crude Oil

October Nymex crude oil prices are firmer early today on a corrective bounce from selling pressure seen Monday and Tuesday.

Crude oil bulls still have the overall near-term technical advantage but have faded this week. In October Nymex crude, look for buy stops to reside just above resistance at the overnight high of $106.57 and then at $107.00. Look for sell stops just below technical support at this week’s low of $104.94 and then at the September low of $104.21. Wyckoff's Intra-Day Market Rating: 5.5

Grains

Markets were narrowly mixed overnight. Rainfall in the U.S. Corn Belt the past several days is somewhat helping late-maturing soybeans, and that’s been bearish for futures prices this week. Focus is on early yield reports on the harvesting of the U.S. corn and soybean crops in the Corn
Belt—and on any fresh export demand for U.S. grains.

Technically, the soybean bulls still have the overall advantage, while corn and wheat market bears are in firm technical command.

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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