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Jim Wyckoff's Morning Report: Markets on Hold Overnight

22 October 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Many markets were on hold overnight, awaiting the big U.S. economic report early this week: the employment report for September, which is 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 questionable how much the markets will react, and for how long, to the jobs data, because the report is out 18 days late.

The market place may quickly discount the jobs report and look to upcoming fresher U.S. economic data for direction.

In other overnight news, reports from China said housing prices in China are rising rapidly, which is read as a negative due to the inflationary implications that could cause China’s central bank to pull in the reins on its monetary policy.

Recent economic data out of China has been upbeat, suggesting the world’s second-largest economy remains robust. China is a huge importer of raw commodities.

The U.S. dollar index is slightly higher Tuesday on short covering ahead of the jobs report. The index is hovering just above last week’s 10.5-month low.

Meantime, Nymex crude oil futures have fallen below the $100.00 level this week. The recently weaker greenback is bullish for the raw commodity sector, but the solid near-term price downtrend in crude oil prices is bearish—so these two key “outside market” forces have worked to cancel each other out.

Other U.S. economic data due for release Monday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, construction spending, and the Richmond Fed business survey.--Jim

U.S. Dollar Index

The December U.S. dollar index is slightly higher 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 neutral early today.

The dollar index finds shorter-term technical resistance at 80.000 and then at 80.155. Shorter-term support is seen at Monday’s 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

December Nymex crude oil prices are slightly lower early today 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 December Nymex crude, look for buy stops to reside just above resistance at $100.00 and then at $101.00.

Look for sell stops just below technical support at the overnight low of $99.25 and then at $99.00. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were weaker overnight. Harvest progress in the U.S. Corn Belt, with many higher-than expected yields, is a bearish underlying market factor for corn and soybeans.

Monday afternoon’s weekly crop progress data showed the U.S. corn crop 39% harvested, which is less than expected.

Soybean harvest was put at 69% complete, which was about in line with expectations. Technically, the corn bears are in command, soybean bears have the slight chart advantage, and wheat bulls still 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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