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Jim Wyckoff's Morning Report: Markets Mixed Overnight

04 November 2013

GLOBAL - The European Stoxx 600 index hit a five-year high overnight on ideas the European Central Bank could ease its monetary policy at Thursday’s meeting, and on upbeat economic data coming out of China.

The ECB could be compelled to try to boost the fragile economic recovery in the EU by lower interest rates—especially after EU data last week showed very low inflationary pressure in the bloc.

Meantime, China’s official non-manufacturing purchasing managers index rose to a 14-month high of 56.3 in October.

Germany’s better economic health lifted the collective number, as the periphery EU countries’ economies remain weak.

The data firm Markit also on Monday reported the European Union’s PMI came in at 51.3 in October versus 51.1 in September.

China’s Communist party meets this week, during which time major plans and reforms are unveiled by the leaders of the country.

The world market place will be closely watching for any proclamations coming from that confab. Reports say slack demand for physical gold from India, during its Diwali festival season, is a bearish underlying fundamental factor for the metal.

Indian government import restrictions and increased duties on gold imports have hurt consumer demand in that major gold-consuming nation.

U.S. economic data due for release Monday includes the New York ISM report on business, manufacturers’ shipments and orders, and the global manufacturing PMI.

There is a heavy slate of U.S. economic data due for release this week, including the key
U.S. jobs report on Friday.--Jim

U.S. Dollar Index

The December U.S. dollar index is weaker early today on profit taking after hitting a fresh six-week high early on.

While bears remain in overall near-term technical control, the bulls are making a strong move, to suggest a market low is in place.

Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term
technical resistance at the overnight high of 81.020 and then at 81.250.

Shorter-term support is seen at 80.500 and then at Friday’s low of 80.320. Wyckoff's Intra Day Market Rating: 4.5

NYMEX Crude Oil

December Nymex crude oil prices are lower early today and hit another fresh four-month low overnight.

Bears have the overall near-term technical advantage. Prices are in a nine- week-old downtrend on the daily bar chart.

In December Nymex crude, look for buy stops to reside just above resistance at $95.00 and then at $95.50.

Look for sell stops just below technical support at $94.00 and then at $93.50. Wyckoff's Intra-Day Market Rating: 4.0

Grains

Markets were narrowly mixed overnight. Bulls and bears are weighing conflicting factors to start the new trading week: the still-bearish specter of the U.S. corn and soybean harvest and the related hedge selling, and the better export demand for U.S. grains seen recently.

Traders will focus on USDA data this week, including Monday evening’s crop progress report and

Friday’s latest monthly supply and demand report. Technically, the corn bears are still in firm command, while soybeans are technically neutral on a near-term basis and wheat bears have the near-term technical advantage.

TheCropSite News Desk

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