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Jim Wyckoff's Morning Report: Markets Mixed Overnight

23 September 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - German elections on Sunday saw Chancellor Angela Merkel win a third term. The result is what the market place expected.

The data provider Markit on Monday said its monthly gauge of business activity in the European Union rose in September to 52.1, the highest level in over two years.

August showed a 51.5 figure. A reading above 50.0 suggests growth. European stocks were mostly firmer Monday on the aforementioned news.

In China overnight, the HSBC manufacturing PMI rose to a six-month high of 51.2 in September, compared to a reading of 50.1 in August.

This report continued a string of generally upbeat economic news coming out of the world’s second-largest economy. Japanese markets were closed for a holiday Monday, while Hong Kong shut down early due to a typhoon.

Other Asian stock markets were firmer Monday. The market place continues to reflect upon last week’s surprise move by the U.S. Federal Reserve to not start to wind down its monthly bond-buying program.

Traders and investors are awaiting fresh clues from the Fed on its future monetary policy moves, especially the timing of such moves. Fed official James Bullard last Friday said the Fed could
announce a “tapering” move as soon as its October FOMC meeting.

There are several Federal Reserve officials speaking this week, including three today, and their comments will be closely scrutinized by the market place.

The U.S. budget and debt ceiling issues are looming and will be hotly debated by the U.S. Congress and the Obama administration the next few weeks.

This will become a front-burner matter for the market place, and one that could be significantly bearish for most markets, as there is already talk the U.S. government could shut down for a short time. U.S. economic data due for release Monday includes the Chicago Fed national activity index and the U.S. flash manufacturing PMI. - Jim

U.S. Dollar Index

The December U.S. dollar index is slightly lower early today. Prices are hovering not far above last week’s 7.5-month low.

Bears are in technical command. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Friday’s high of 80.685 and then at 80.949. Shorter-term support is seen at the overnight low of 80.395 and then at last week’s low of 80.155. Wyckoff's Intra Day Market Rating: 4.5

NYMEX Crude Oil

November Nymex crude oil prices are near steady early today. Prices hit a three-week low overnight.

In November Nymex crude, look for buy stops to reside just above resistance at the overnight high of $105.12 and then at $105.00.

Look for sell stops just below technical support at the overnight low of $104.10 and then at the September low of $103.74. Wyckoff's Intra-Day Market Rating: 5.0

Grains

Markets were narrowly mixed overnight. Soybean and some corn harvesting will pick up speed this week.

Focus will be on early yield reports in the U.S. Corn Belt. Technically, the soybean bulls still have the overall advantage, but are fading a bit. Corn and wheat market bears remain in firm technical command.

My bias is that the corn and wheat markets do not have strong downside price potential at present levels. It’s also my bias that soybeans will trade sideways to lower in the coming weeks.

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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