Traders Position For Strong GDP Tomorrow

Technical Outlook

#BONDS (JUN) 04/29/04: The close below the 2nd
swing support number puts the market on the defensive. Near-term resistance for
bonds is at 107.25 and then again at 108.22, while swing support hits at 106.16
and below there at 106.04. The market’s close below the 9-day moving average is
an indication the short-term trend remains negative. The daily stochastics have
crossed over down which is a bearish indication. The next downside target is
106.04. The 9-day RSI under 30 indicates the market is approaching oversold
levels.

T-NOTES(JUN) The daily stochastic’s gave a
bearish indicator with a crossover down. The next downside objective is now at
109.25. The market’s close below the 1st swing support number suggests a
moderately negative setup for today. Near-term resistance for the T-Notes is at
110.28 and then again at 111.15, while swing support hits at 110.01 and below
there at 109.25. The market’s short-term trend is negative as the close remains
below the 9-day moving average. With a reading under 30, the 9-day RSI is
approaching oversold levels.

 

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STOCK INDICES RECAP

4/28/2004

June S&P closed sharply lower on a combination of
interest rate hike fears, and declines in commodity and metals related stocks on
concerns that China will begin to tighten credit in an attempt to reign in their
torrid economic growth. China has been a major consumer of a diverse number of
raw commodities and reduced demand from China could impact several companies
bottom line. Escalating fighting in Iraq and a rash of terrorist attacks in the
Middle East also have investors jittery about owning stocks.

Technical Outlook

#S&P500 (JUN) 04/29/04: The market is in a
bearish position with the close below the 2nd swing support number. The gap down
on the day session chart is bearish with more selling pressure possible today.
Underlying support comes in at 1116.00 and 1110.90, with overhead resistance at
1130.20 and 1139.30. The market’s short-term trend is negative as the close
remains below the 9-day moving average. The major trend is down with the cross
over back below the 40-day moving average. The daily stochastic’s gave a bearish
indicator with a crossover down. The next downside objective is now at 1110.90.

S&P E-Mini (JUN): A bearish signal was triggered
on a crossover down in the daily stochastics. The next downside objective is
1107.81. There could be some early pressure today given the market’s negative
setup with the close below the 2nd swing support. Near-term resistance for the
S&P Mini is at 1132.13 and then again at 1144.31, while swing support hits at
1113.88 and below there at 1107.81. A positive signal for trend short-term was
given on a close over the 9-bar moving average.

NASDAQ (JUN) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. The close
below the 2nd swing support number puts the market on the defensive. The market
should run into resistance at 1472.00 and above there at 1490.00 with support at
1443.00 and 1432.00. The daily stochastics have crossed over down which is a
bearish indication. The next downside target is 1432.0.

MINI DOW (JUN) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. The
market should run into resistance at 10420 and above there at 10525 with support
at 10262 and 10209. The daily stochastics have crossed over down which is a
bearish indication. The next downside target is 10209. The close below the 2nd
swing support number puts the market on the defensive.

 

CURRENCY MARKET RECAP

4/28/2004

The June Dollar Index made a strong comeback on
Wednesday as traders position for what could be a surprisingly strong 1st
quarter US GDP number out tomorrow. The market has likely priced in a GDP as
high as 5.3%, but given the surprising strength in recent economic reports
(including Mar Payroll, home sales & consumer confidence, which have all come
out way above expectations), the market could face another surprise with the GDP
data. European indicators besides the UK continue to show anemic growth, which
throws the ball back to the Dollar bulls.

Technical Outlook

#CURRENCIES 04/29/04: YEN (JUN): The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative. The outside day down and close below the previous day’s low is
a negative signal. The downside closing price reversal on the daily chart is
somewhat negative. The swing indicator gave a moderately negative reading with
the close below the 1st support number. Swing resistance is targeted at 91.47
and above there at 92.00, with the yen finding support around 90.61 and below
there at 90.28. The close under the 40-day moving average indicates the
longer-term trend could be turning down. Momentum studies are declining, but
have fallen to oversold levels. The next downside target is 90.28. Short-term
indicators on the defensive. Consider selling an intraday bounce.

EURO (JUN): Daily momentum studies are on the
rise from low levels and should accelerate a move higher on a push through the
1st swing resistance. The near-term upside objective is at 1.1925. The market is
in a bearish position with the close below the 2nd swing support number. Swing
support for the Euro comes in at 1.1749, with overhead resistance at 1.1925. The
market’s short-term trend is negative as the close remains below the 9-day
moving average. The major trend is down with the cross over back below the
40-day moving average. The gap down on the day session chart is bearish with
more selling pressure possible today.

 

PRECIOUS METALS RECAP

4/28/2004

June gold closed over $13 lower, July platinum
$37 lower and July silver closed nearly 37 cents lower as fund and spec traders
bailed out of long positions on concerns that China’s demand for metals could
dramatically slow his year. The country’s State Council has implemented new
purchasing guidelines for companies in the cement, aluminum, steel and property
development areas, which in effect tightens their credit. While silver and
platinum are considered industrial metals along with copper, gold sold off in
sympathy. A stronger Dollar and fears that the Fed will soon have to raise rates
as recent economic reports have come in above expectations have compounded the
negative view in metals.

Technical Outlook

#P-METALS 04/29/04: SILVER (JUL): It is a
slightly negative indicator that the close was lower than the pivot swing
number. Initial support for silver is at 619.0 and below there at 619.0 with
resistance likely at 619.0 and 619.0. The market’s close below the 9-day moving
average is an indication the short-term trend remains negative. Momentum studies
are declining, but have fallen to oversold levels. The next downside target is
619.0. The 9-day RSI under 30 indicates the market is approaching oversold
levels.

GOLD (JUN): Support for gold today comes in near
375.95, while resistance is pegged at 399.95. The daily stochastic’s gave a
bearish indicator with a crossover down. The next downside objective is now at
375.95. The market is in a bearish position with the close below the 2nd swing
support number. The market’s short-term trend is negative as the close remains
below the 9-day moving average. With a reading under 30, the 9-day RSI is
approaching oversold levels. The gap down on the day session chart is bearish
with more selling pressure possible today.

 

COPPER MARKET RECAP

4/28/2004

Copper prices fell hard under the weight of heavy
liquidation as traders fear that China’s ravenous demand for the metal will
begin to slow since the country’s State Council has implemented new purchasing
guidelines which in effect tightens credit. While the US economic news has show
growth accelerating which could translate into stronger demand for copper
domestically, the market is fearful the Fed will raise rates soon and choke off
growth. A stronger dollar Wednesday also makes copper less attractive to foreign
buyers.

 

ENERGY MARKET RECAP

4/28/2004

June unleaded gas rallied to fresh contract
highs, but closed off the session highs on some minor profit taking. The API/EIA
stock report showed gasoline stocks fell for the week of April 23rd, with
reformulated gasoline nearly 1.15 million barrels. Tightening gasoline stocks
amid heightened anxiety over Middle East terrorist attacks on oil facilities has
gasoline futures in a nearly vertical price climb ahead of the summer driving
season, which is also dragging the rest of the complex higher.

Technical Outlook

#ENERGIES 04/29/04: CRUDE OIL (JUN): The rally
brought the market to a new contract high. The daily closing price reversal down
puts the market on the defensive. The market’s close below the pivot swing
number is a mildly negative setup. Support for crude is keyed on 36.78 and below
there at 36.11, with resistance pegged at 38.15 and 38.85. The market’s
short-term trend is positive on a close above the 9-day moving average. Momentum
studies are trending higher, but have entered overbought levels. The near-term
upside objective is at 38.85.

UNLEADED GAS (JUN): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 126.79. Since the close was above the 2nd swing resistance
number, the market’s posture is bullish and could see more upside follow-through
early in the session. Resistance today is at 126.79, while support should be
found around 116.59. A new contract high was made on the rally. The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The 9-day RSI over 70 indicates the market is approaching overbought
levels.

HEATING OIL (JUN): The market’s close below the
pivot swing number is a mildly negative setup. Heating oil should encounter
support around 90.79, with resistance is at 97.59. The market’s short-term trend
is positive on a close above the 9-day moving average. Momentum studies are
trending lower from high levels which should accelerate a move lower on a break
below the 1st swing support. The next downside objective is now at 90.79. The
daily closing price reversal down puts the market on the defensive.

 

CORN MARKET RECAP

4/28/2004

The market was hit with overflow selling
pressures from the soybean break, a strong US dollar, China demand concerns and
improving weather for planting in the western cornbelt just ahead. “Less”
concerns that cold weather this weekend could damage emerging corn plants added
to the more negative tone early in the session. The Belarus Agriculture Minister
launched a tender to buy 200,000 tons of feedgrain for May-June delivery. A
sharp drop in the CRB index and fears of additional long liquidation selling
from speculators into the end of the month was also seen as a bearish factor.
Weekly export sales, released before the opening, are expected to come in near
900,000-1.1 million tons as compared with 1.276 million tons last week at this
time. Brazil officials pegged the 2003/2004 corn crop at 42.6 million tons as
compared with the February forecast of 46.3 million tons. Short-term support for
December corn comes in at 307 1/2 and 304 with 314 1/4 and 319 1/2 as
resistance.

Technical Outlook

#CORN (JUL) 04/29/04: Daily stochastics are
trending lower, but have declined into oversold territory. The next downside
objective is now at 308 1/2. The market’s close below the pivot swing number is
a mildly negative setup. Market resistance comes in at 318 1/2 today, with
support at 308 1/2. The market’s short-term trend is positive on a close above
the 9-day moving average.

 

SOY COMPLEX RECAP

4/28/2004

The rally in the US dollar and renewed fears of a
slow-down in demand from China helped to trigger the early weakness. Rumors that
China may have cancelled up to 7 cargoes of South American soybeans helped to
trigger selling. In addition, comments from the China premier suggested that the
economy may have to slow from the recent fast pace and there was a concern that
commodities which are imported by China (such as soybeans) could see a drop in
demand. A sharp sell-off in the metal markets was led by aggressive fund selling
based on a theory that China officials may need to slow economic growth in their
country which might (in-turn) slow the import of commodities. The active South
America harvest period and profit-taking selling after yesterday’s surge added
to the bearish tone. Brazil officials pegged their soybean crop production at
50.1 million tons as compared with 57.7 million as their February estimate and
56 million by the USDA in the April Supply/Demand reports. Weekly export sales,
released before the opening, are expected to come in near 75,000-200,000 tons
for soybeans, 25,000-50,000 tons for meal and 1,000-5,000 tons for oil. For the
Census Bureau crush report in the morning, traders are looking for March crush
to come in near 128.5 million bushels and oil stocks near 1.925 billion pounds.
Volume was thought to be slow. Near-term support for November soybeans comes in
at 733 3/4 and 728 with 739 1/4 and 746 as resistance.

Technical Outlook

#SOYBEANS (JUL) 04/29/04: It is a slightly
negative indicator that the close was lower than the pivot swing number. The
next area of resistance is around 991 and 1003, while 1st support hits today at
969 and below there at 959. The market’s close above the 9-day moving average
suggests the short-term trend remains positive. Positive momentum studies in the
neutral zone will tend to reinforce higher price action. The next upside target
is 1003.

MEAL (JUL): Momentum studies are trending higher
from mid-range which should support a move higher if resistance levels are
penetrated. The near-term upside objective is at 310.6. First resistance comes
in at 308.2, with support at 302.9. The market’s short-term trend is positive on
a close above the 9-day moving average. The market’s close below the pivot swing
number is a mildly negative setup.

BEAN OIL (JUL): The moving average crossover up
(9 above 18) indicates a possible developing short-term uptrend. Positive
momentum studies in the neutral zone will tend to reinforce higher price action.
The next upside target is 34.21. The swing indicator gave a moderately negative
reading with the close below the 1st support number. Daily swing resistance is
found at 33.55 and above there at 34.21. Support should be encountered at 32.63
and 32.37.

 

WHEAT MARKET RECAP

4/28/2004

The market was called to open higher but weakness
in the other grains and fears of a slower China economy in the long run helped
trigger selling across a wide spectrum of commodity markets. The early call for
higher trade was based on concerns that temperatures this weekend may be cold
enough to cause some damage to the winter wheat crop this weekend. However, many
traders did not believe there would be much damage unless the cold reached into
the southern plains. Reports from crop scouts in Kansas may impact the market in
the days just ahead. Conditions in the central and eastern areas of the state
were seen as potentially reaching normal yield but the group indicated that
yields in the western part of the state are likely to drop significantly from
last year. Taiwan bought 42,500 tons of US wheat overnight. Weekly export sales,
released before the opening, are expected to come in near 300,000-600,000 tons
as compared with 259,600 tons last week at this time. July wheat support levels
come in at 381 1/4 and 379 with 386 and 387 3/4 as resistance.

Technical Outlook

#WHEAT (JUL) 04/29/04: Short-term indicators on
the defensive. Consider selling an intraday bounce. The swing indicator gave a
moderately negative reading with the close below the 1st support number. Look
for near-term support at 378 and below there at 374 1/4, with resistance levels
at 386 1/2 and 391 1/4. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative. Momentum studies are
declining, but have fallen to oversold levels. The next downside target is 374
1/4.

 

LIVE CATTLE RECAP

4/28/2004

Cattle futures surged sharply higher on the
session led by higher beef prices and the slow pace in which Canadian cattle and
beef will be allowed into the US. August and deferred futures hit new contract
highs for the third session in a row and June moved to a new contract high.
Nebraska cattle traded at $87 and packers raised bids in the southern plains to
$86 in the afternoon but feedlots seem to be holding out for $87-$88. Boxed-beef
cut-out values were up 21 cents to $157.46 as compared with $160.28 last week at
this time. August cattle has rallied 470 points off of Friday’s lows.

Technical Outlook

#CATTLE (JUN) 04/29/04: Positive momentum studies
in the neutral zone will tend to reinforce higher price action. The next upside
target is 82.95. Since the close was above the 2nd swing resistance number, the
market’s posture is bullish and could see more upside follow-through early in
the session. Support should be encountered at 78.90 and below there at 76.75.
Market resistance is at 82.00 and then again at 82.95. A new contract high was
made on the rally. The moving average crossover up (9 above 18) indicates a
possible developing short-term uptrend.

 

LEAN HOGS RECAP

4/28/2004

The market closed sharply higher on the session
and took back much of Tuesday’s losses as sharply higher pork cut-out values and
higher cash hog prices helped to support. Peoria hogs traded .50 higher at
$48.00 after traders anticipated weakness in the cash markets. Strength in the
cattle market and a bullish reaction to bearish news on the weekly cold storage
report in belly futures added to the positive tone. The CME 2-day Lean Index for
the period ending April 26th was up 32 cents to $68.40 as compared with 66.06
one week previous. Weekly average weights for Iowa/Minn for the week ending
April 24th came in at 264.3 pounds as compared with 265.1 the previous week and
263.3 pounds last year at this time.

Technical Outlook

#HOGS (JUN) 04/29/04: With the close over the 1st
swing resistance number, the market is in a moderately positive position.
Resistance levels comes in at 73.05 and 73.27 today, while support is around
72.25 and then 71.67. Consider buying pull-backs since daily studies are
bullish. The market’s short-term trend is positive on a close above the 9-day
moving average. The major trend could be turning up with the close back above
the 40-day moving average. The daily stochastics gave a bullish indicator with a
crossover up. The near-term upside objective is at 73.27.

 

COCOA MARKET RECAP

4/28/2004

Cocoa closed higher across the board today,
supported by commercial buying in New York and London. The strength was
surprising given the stronger action in US dollar, which had a negative effect
on sugar and other commodities. July cocoa closed 27 higher at $1405, its
highest close since April 8th and only $3 off the high of the day, while the
June dollar index closed 80 higher at 91.43. Reports of origin sellng in Ghana
and needed rains in Nigeria did not appear to constrain the market.

Technical Outlook

COCOA (JUL) 04/29/04 The market has a bullish
tilt coming into today’s trade with the close above the 2nd swing resistance.
Cocoa should run into resistance at 1419 and above there at 1427 with support at
1392 and 1373. Positive momentum studies in the neutral zone will tend to
reinforce higher price action. The next upside target is 1426.75.

 

COFFEE MARKET RECAP

4/28/2004

July Coffee closed 55 lower on the session as
mild long liquidation selling hit the coffee market after the market failed to
add to the early rally to the highest level in 5 trading sessions. Weakness in
many commodity markets due to fears of a slow-down in the China economy helped
to turn the psychology a bit more negative. London futures closed higher but
near the lows of the day. The NYBOT announced that minimum margin requirements
would be lowered for coffee futures trading. Traders in Brazil believe that the
“neutral” readings for El Nino or La Nina for this season could prompt colder
weather this winter.

Technical Outlook

COFFEE (JUL) 4/29/04 The downside closing price
reversal on the daily chart is somewhat negative. The close equal to the pivot
swing number is a neutral directional indicator. Daily stochastics are showing
positive momentum from oversold levels which should reinforce a move higher if
near-term resistance is taken out. The near-term upside objective is at 72.95.
The Coffee contract should run into resistance at 71.95 and above there at 72.95
with support at 70.1 and 69.25. The market’s short-term trend is negative as the
close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

4/28/2004

After hitting new contract highs early in the
session, July sugar closed 38 lower on the day and near the low end of a 60
point trading range. Export rumors to China and India supported the early gains
but a collapse in many commodity markets and massive long liquidation selling
from speculators helped to pressure. Ideas that China officials will need to
take forceful action to cool the economic growth helped to trigger selling in a
wide spectrum of commodity markets. Keep in mind; speculators were holding a net
long position of near 122,000 contracts as of April 20th and the mass exodus of
funds out of metals, grains and soft markets along with the activation of
sell-stops contributed to the sharp losses.

Technical Outlook

#SUGAR (JUL) 04/29/04: The market’s key reversal
down is a bearish signal. The outside day down is a negative signal. The rally
brought the market to a new contract high. The daily closing price reversal down
puts the market on the defensive. The market is in a bearish position with the
close below the 2nd swing support number. Swing resistance comes in at 7.47,
with support found at 6.27. The market’s short-term trend is negative as the
close remains below the 9-day moving average. The daily stochastic’s gave a
bearish indicator with a crossover down. The next downside objective is now at
6.27.

 

COTTON MARKET RECAP

4/28/2004

July and December cotton were limit-down after
the higher opening failed to attract new buying interest. Hopes of good exports
for the morning sales report helped support the early gains. Ideas that China
officials will need to take forceful action to cool the economic growth helped
to trigger selling in a wide spectrum of commodity markets. This is especially
true in markets where China is a significant importer as traders believe that a
slower China economy could slow import demand. The Cotlook A Index was steady at
70.00.

Technical Outlook

#COTTON (JUL) 04/29/04: The market’s close below
the 9-day moving average is an indication the short-term trend remains negative.
The close below the 2nd swing support number puts the market on the defensive.
Next resistance area comes in at 61.29 and then again at 63.78, while support is
targeted at 57.97 and 57.14. The daily stochastics have crossed over down which
is a bearish indication. The next downside target is 57.14. The outside day down
and close below the previous day’s low is a negative signal. The downside
closing price reversal on the daily chart is somewhat negative.