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Wyckoff's Morning Report: US Shutdown Continues to Affect Markets

04 October 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Asian and European markets were weaker in a subdued atmosphere Friday, as the partial U.S. government shutdown enters its fourth day with no end in sight.

There is growing anxiety in the world market place but not yet panic. If the situation drags on over the weekend and into next week, which appears likely at this time, then trader and investor anxiety will increase come Monday morning.

If confidence in the market place continues to wane, the odds will grow that daily price volatility will increase in many markets.

In mid-October the U.S. government will hit its debt ceiling. If that arguably more important matter cannot be agreed upon by U.S. lawmakers in a timely manner, then it could be a much bigger event for the market place than the current budget impasse.

Fresh U.S. budget news coming out of Washington Friday could be market-sensitive. There is no U.S. economic data due for release Friday with the U.S. government partially shut down.

The Labor Department’s employment report was due out Friday morning. There are four Federal Reserve officials due to give speeches Friday afternoon. They will be closely monitored, to see if those Fed officials remark about the U.S. budget impasse’s potential impact on the U.S. economy.--Jim

U.S. Dollar Index

The December U.S. dollar index is firmer early today on short covering in a bear market after prices Thursday hit an eight-month low. Bears remain in firm overall near-term technical command. Slow stochastics for the dollar index are neutral early today.

The dollar index finds shorter-term technical resistance at 80.155 and then at Wednesday’s high of 80.380. Shorter-term support is seen at the overnight low of 79.780 and then at this week’s low of 79.720. Wyckoff's Intra Day Market Rating: 5.5

NYMEX Crude Oil

November Nymex crude oil prices are firmer early today. Bulls and bears are back on a level near-term technical playing field.

In November Nymex crude, look for buy stops to reside just above resistance at this week’s high of
$104.38 and then at $105.00. Look for sell stops just below technical support at the overnight low of $102.90 and then at $102.50. Wyckoff's Intra-Day Market Rating: 5.5

Grains

Markets were mixed but mostly firmer overnight. Corn and wheat were slightly higher and soybeans were modestly weaker.

Wheat bulls continue to gain upside near-term technical momentum. The “risk-off” mentality in the market place this week is a bearish underlying factor for all of the grains. U.S. harvest of soybeans and corn is progressing rapidly this week, which is bearish for both markets.

With much of USDA closed, there is a lack of fresh fundamental news for grain traders to digest, and that favors the bearish camp due to the uncertainty of the matter.

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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