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Wyckoff's Morning Report: Markets Firmer Overnight

19 September 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Most world stock, financial and commodity markets were cheered by the surprising news from the FOMC Wednesday afternoon.

The FOMC’s decision to not taper its $85 billion- a-month bond-buying program, which is also called quantitative easing, caught the market place completely off guard.

The FOMC members said they are still not convinced the U.S. economy is healthy enough to begin winding down QE.

The Fed members are worried about the recent rise in U.S. interest rates choking off the fledgling economic recovery.

Given the markets’ reactions to the FOMC meeting results, it appears no tapering could be at least a near-term game-changer for many markets.

The printing presses of the Federal Reserve will continue to run at high speed for at least a while, or even for longer.

That’s bullish for stock, bond and commodity markets as it keeps the market place awash in cash that is looking for an asset home.

However, the market place has to once again try to figure out when the Federal Reserve will reduce its monthly bond buying.

It could be that after a short rally in the aforementioned markets, trader and investor uncertainty due to the still-unresolved timing of any Fed monetary policy change again pervades the market place.

Keener uncertainty on major issues in the market place is usually a bearish underlying factor. The looming U.S. budget and debt ceiling issues that will soon be hotly debated by the U.S. Congress and the Obama administration will become a front-burner matter for the market place, and one that is likely to be bearish for most markets, as there is already talk the U.S. government could shut down for a short time.

U.S. economic data due for release Thursday includes the weekly jobless claims report, existing home sales, leading economic indicators and the Philadelphia Fed business outlook survey.--Jim

U.S. Dollar Index

The September U.S. dollar index is weaker early today and hit a fresh 7.5-month low overnight. Bears are in technical command. Slow stochastics for the dollar index are bearish early today.

The dollar index finds shorter-term technical resistance at 80.500 and then at 80.750. Shorter-term support is seen at the overnight low of 80.155 and then at 80.000. Wyckoff's Intra Day Market Rating: 4.0

NYMEX Crude Oil

October Nymex crude oil prices are slightly higher early today on mild follow-through buying from Wednesday’s strong gains. Crude oil bulls have the solid overall near-term technical advantage.

In October Nymex crude, look for buy stops to reside just above resistance at the overnight high of $108.99 and then at $110.00.

Look for sell stops just below technical support at $108.00 and then at $107.50. Wyckoff's Intra-Day Market Rating: 5.5


Markets were firmer overnight, supported by the bullish effect of the FOMC news on Wednesday. Focus is on early yield reports on the harvesting of the U.S. corn and soybean crops in the Corn Belt—and on any fresh export demand for U.S. grains.

Technically, the soybean bulls still have the overall advantage, while corn and wheat market bears are in firm technical command. My bias is that the corn and wheat markets do not have strong downside price potential at present levels.

TheCattleSite 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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