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Jim Wyckoff's Morning Report: Markets Firmer Overnight

21 October 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The flow of backed-up U.S. government economic data starts Monday. The big economic report early this week will be the U.S. employment report for September, which is due out Tuesday morning.

The key non-farm payrolls number of the jobs report is expected to come in at up 180,000, while the overall unemployment rate is expected to be unchanged at 7.3%.

It’s likely some of the postponed U.S. economic data that was due out during the two weeks the U.S. government was shut down will be cancelled.

The fresh batch of U.S. economic data could make for more volatile price action in many markets that had seen a dearth of fresh U.S. economic/fundamental news for over two weeks.

The U.S. dollar index is near steady Monday and hovering just above last week’s 10.5-month low.

The market place has realized the U.S. budget/debt deal reached last week is just temporary, with the same situation potentially arising in the first quarter of next year.

Also greenback-bearish is the dysfunction of U.S. lawmakers in October, which likely caused the U.S. Federal Reserve to delay any plans it had to start to wind down its quantitative easing of monetary policy.

This week’s bunch of U.S. economic data is likely to have a significant impact on the U.S. dollar index, which is an important daily “outside market” that can impact many other markets.

The weaker U.S. dollar has been an underlying bullish factor for most raw commodity markets the past couple weeks.

Asian stock markets were supported Monday on positive comments coming from Chinese government officials, who said Sunday that Chinese government economic targets will be met, due to recent better China economic data.

U.S. economic data due for release Monday includes the Chicago national activity index, existing home sales, and the weekly DOE energy stocks report.--Jim

U.S. Dollar Index

The December U.S. dollar index is near steady early today and hovering near last week’s 10.5 month low.

Bears remain in firm overall near-term technical control. Slow stochastics for the dollar index are bearish early today.

The dollar index finds shorter-term technical resistance at 80.000 and then at 80.155. Shorter-term support is seen at the overnight low of 79.680 and then at last week’s low of 79.550. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

November Nymex crude oil prices are lower early today, dropped below $100.00 and hit a nearly four-month low overnight.

Bears have the overall near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart. In November Nymex crude, look for buy stops to reside just above resistance at the overnight high of $100.95 and then at $101.00. Look for sell stops just below
technical support at the overnight low of $99.77 and then at $99.00. Wyckoff's Intra-Day Market Rating: 4.0

Grains

Markets were firmer overnight. Short covering was featured in corn and soybeans following losses late last week.

Wheat futures hit a fresh four-month high overnight amid recent good export demand for U.S. wheat and reports of weather problems with Russia’s wheat crop.

USDA reports are flowing again, and Monday afternoon’s weekly crop progress data is expected to show U.S. corn and soybean harvesting past the half-way mark.

Technically, the corn bears are still in command, soybean bears have the slight chart advantage, and wheat bulls possess the near-term technical advantage.

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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