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Jim Wyckoff's Morning Report: Markets Firmer Overnight

24 September 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Amid a lack of major geopolitical developments or markets- moving economic data the past several days, the world market place continues to buzz about last week’s decision by the U.S. Federal Reserve to not “taper” its monthly bond-buying program—and when might the Fed begin that endeavor.

Several Federal Reserve officials have already spoken so far early this week, with the common thread among them being that the Fed would begin to wind down its quantitative easing when U.S. economic conditions warrant.

At present, most of those Fed officials do not believe the U.S. economy is quite strong enough to pull away from the monthly bond buying. 

However, some of those Fed officials have suggested the tapering could still come in 2013. Just Tuesday morning, New York Fed president William Dudley told CNBC the Fed could implement tapering yet this year and be finished with the bond buying entirely sometime during 2014.

Ironically, Fed Chairman Ben Bernanke’s vision of a more transparent Fed during his tenure has been severely blurred as his leadership comes to an end, due to the market place’s inability to clearly read the monetary course of Bernanke and the FOMC.

Meantime, European Central Bank officials Tuesday suggested the ECB could implement new monetary policy easing measures if the European Union economies do not show better growth prospects.

That helped to put downside price pressure on the Euro currency. The U.S. budget and debt ceiling issues are looming and will be 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 Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P/Case-Shiller home price index, the monthly house price index, the consumer confidence index, and the Richmond Fed business survey.--Jim

U.S. Dollar Index

The December U.S. dollar index is slightly higher early today on short covering in a bear market. 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 bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.740 and then at 80.949.

Shorter-term support is seen at the overnight low of 80.520 and then at Monday’s low of 80.395. Wyckoff's Intra Day Market Rating: 5.5

NYMEX Crude Oil

November Nymex crude oil prices are slightly lower early today and hit a six-week low overnight. In November Nymex crude, look for buy stops to reside just above resistance at $104.00 and then at $105.00.

Look for sell stops just below technical support at the overnight low of $103.00 and then at $102.50. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were firmer overnight on short covering. Not much new. Soybean and some corn harvesting are picking up speed this week.

Focus is on early yield reports in the U.S. Corn Belt. Technically, the soybean bulls still have the overall advantage, but are fading.

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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