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Jim Wyckoff's Morning Report: China to Become More Market Orientated

12 November 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news, Chinese leaders at their annual Communist party meeting pledged to enact fiscal and land reforms, ease controls on investment and become more market-oriented, reports overnight said.

The Organization for Economic Cooperation and Development (OECD) reported Tuesday that the economies of the European Union, China and the U.K. will see better economic growth in the coming year. However, India, Brazil and Russia are likely to see weaker economic growth in the coming year. The OECD said little change in the rate of economic growth is expected in the U.S. and Japan.

The U.S. dollar is firmer Tuesday, seeing support the past week on ideas the U.S. Federal Reserve will begin to back off on its easing of monetary policy in the not-too-distant future. Some in the market place now expect the Fed to begin “tapering” its monthly bond-buying program (quantitative easing) as early as December. The greenback is also supported by last week’s surprise move by the European Central Bank to lower its main interest rate to a record-low
0.25%.

There continue to be reports of weak demand for physical gold coming from Asian countries, which remains an underlying bearish fundamental factor for the gold market.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, the Chicago Fed national activity index, and the employment trends index.

Monday’s Wyckoff’s Daily Risk Rating: 5.0 (No major developments overnight and no major economic reports out Tuesday.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off).

US Dollar Index

The December U.S. dollar index is higher early today and hovering near the recent two-month high. Bulls have upside momentum. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at last week’s high of 81.580 and then at 81.750. Shorter-term support is seen at the overnight low of 81.175 and then at 81.000. Wyckoff's Intra Day Market Rating: 6.0

NYMEX Crude Oil

December Nymex crude oil prices are weaker early today and hovering not far above last week’s four-month low. Bears have the overall near-term technical advantage. Prices are in a 10-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 last week’s high of $95.40. Look for sell stops just below technical support at the overnight low of $94.31 and then at $94.00. Wyckoff's Intra-Day Market Rating: 4.5

Grains

Markets were firmer. Corn and soybean bulls are gaining upside technical momentum. The upside price action in corn and soybeans hints that seasonal harvest lows are in place. Wheat is still technically bearish but will be a follower for at least the near term. With the U.S. corn and soybean
harvest winding down, focus of grain market traders now turns from U.S. production to overall worldwide demand for grains, and on the upcoming South American planting and growing season. 

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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