Are Traders Finally Buying Into The Positives?

Technical Outlook

#BONDS (JUN) 4/23/2004: The market has a slightly
positive tilt with the close over the swing pivot. Near-term resistance for
bonds is at 108.20 and then again at 108.30, while swing support hits at 107.24
and below there at 107.06. A negative signal for trend short-term was given on a
close under the 9-bar moving average. A bullish signal was given with an upside
crossover of the daily stochastics. The next upside objective is 108.30.

T-NOTES(JUN) The daily stochastics gave a bullish
indicator with a crossover up. The near-term upside objective is at 111.29. With
the close over the 1st swing resistance number, the market is in a moderately
positive position. Near-term resistance for the T-Notes is at 111.21 and then
again at 111.29, while swing support hits at 110.30 and below there at 110.14.
The market’s short-term trend is negative as the close remains below the 9-day
moving average.

 

STOCK INDICES RECAP

4/22/2004

The stock market followed through to the upside
partially off the ever-improving corporate earnings situation. With stock prices
still below the April 2 Non-farm payroll release reaction, it would seem that
the market deserves an upward appreciation off the improvement in the economy.
Even in the face of soaring energy prices and negative reactions in the Dollar
and Treasury markets, investors decided to buy stocks and that might be a sign
that the stock market is finally buying into the positives.

Technical Outlook

#S&P500 (JUN) 4/23/2004: There could be more
upside follow through since the market closed above the 2nd swing resistance.
Underlying support comes in at 1126.05 and 1111.73, with overhead resistance at
1148.35 and 1156.33. The close above the 9-day moving average is a positive
short-term indicator for trend. The cross over and close above the 40-day moving
average is an indication the longer-term trend is up. Stochastics trending lower
at midrange will tend to reinforce a move lower especially if support levels are
taken out. The next downside objective is now at 1111.73.

S&P E-Mini (JUN): Negative momentum studies in
the neutral zone will tend to reinforce lower price action. The next downside
target is 1109.81. The market has a bullish tilt coming into today’s trade with
the close above the 2nd swing resistance. Near-term resistance for the S&P Mini
is at 1148.88 and then again at 1157.31, while swing support hits at 1125.13 and
below there at 1109.81. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative.

NASDAQ (JUN) A negative indicator was given with
the downside crossover of the 9 & 18 bar moving average. The market has a
bullish tilt coming into today’s trade with the close above the 2nd swing
resistance. The market should run into resistance at 1505.00 and above there at
1519.00 with support at 1463.00 and 1435.00. Momentum studies trending lower at
mid-range could accelerate a price break if support levels are broken. The next
downside objective is 1435.00. The market now above the 40-day moving average
suggests the longer-term trend is up.

MINI DOW (MAR) The close above the 9-day moving
average is a positive short-term indicator for trend. The market should run into
resistance at 10552 and above there at 10628 with support at 10328 and 10180.
Stochastics trending lower at midrange will tend to reinforce a move lower
especially if support levels are taken out. The next downside target is now at
10180. The cross over and close above the 40-day moving average is an indication
the longer-term trend is up. There could be more upside follow through since the
market closed above the 2nd swing resistance.

 

CURRENCY MARKET RECAP

4/22/2004

The US economic information released Thursday was
a mixed bag for the Dollar but the trade apparently viewed the information in a
slightly negative light after all was said and done. However, as the US stock
market gathered positive momentum during the session that seemed to lift the
Greenback. We suspect that the dramatic improvement in US corporate earnings
could be enough to keep the Dollar in favor even thought the scheduled report
slate might fail to inspire buyers.

Technical Outlook

#CURRENCIES 4/23/2004: YEN (JUN): A negative
signal for trend short-term was given on a close under the 9-bar moving average.
The market tilt is slightly negative with the close under the pivot. Swing
resistance is targeted at 91.71 and above there at 92.05, with the yen finding
support around 91.07 and below there at 90.77. The market back below the 40-day
moving average suggests the longer-term trend could be turning down. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The next downside objective is 90.77.

EURO (JUN): The crossover up in the daily
stochastics is a bullish signal. The near-term upside target is at 1.1935. The
defensive setup, with the close under the 2nd swing support, could cause some
early weakness. Swing support for the Euro comes in at 1.1797, with overhead
resistance at 1.1935. The close below the 9-day moving average is a negative
short-term indicator for trend. The close below the 40-day moving average is an
indication the longer-term trend is down. More selling pressure is likely given
yesterday’s gap lower price action on the day session chart.

 

PRECIOUS METALS RECAP

4/22/2004

After a successful test of the prior days lows,
the June gold market managed some short covering. The silver market continued to
show moderate weakness and would seem to remain vulnerable to more stop loss
fund selling. We still don’t get the sense that the metals markets have
transitioned to a new focus and without a new focus we have to wonder what will
spark the funds back into the market on the long side. From a technical
perspective the silver market continues to be the most vulnerable of the metals
complex.

Technical Outlook

#P-METALS 4/23/2004: SILVER (JUL): The market
tilt is slightly negative with the close under the pivot. Initial support for
silver is at 626.5 and below there at 626.5 with resistance likely at 626.5 and
626.5. A negative signal for trend short-term was given on a close under the
9-bar moving average. Daily stochastics declining into oversold territory
suggest the selling may be drying up soon. The next downside objective is 626.5.
More downside action may be limited by the RSI under 20 putting the market in
extremely oversold territory.

GOLD (JUN): Support for gold today comes in near
389.45, while resistance is pegged at 397.05. Momentum studies are still
bearish, but are now at oversold levels and will tend to support reversal action
if it occurs. The next downside target is now at 389.45. The close over the
pivot swing is a somewhat positive setup. The close below the 9-day moving
average is a negative short-term indicator for trend.

 

COPPER MARKET RECAP

4/22/2004

About the best thing that can be said about the
copper action Thursday is that prices respected the prior days low. The market
had to weather news of increased production but because the Dollar was lower and
the US stock market significantly higher the market found some light buying
interest. However, rumors of potentially two new SARS cases in Chinese probably
kept the market on edge and could easily spark a big break the issues spreads
again. The copper market really needs to see some sign of renewed demand from
China and with the weekly Chinese copper stocks report Friday morning the market
could make a major decision.

 

ENERGY MARKET RECAP

4/22/2004

The energy complex exploded off rumors that the
EPA would not allow any waiver of the summer gas rules. The fact that the US
stock market was sharply higher added to the upside tilt created by the gasoline
rumors. Natural gas saw a weekly storage build of 28 bcf, which is a middle of
the road reading. However, because the regular energy complex soared that gave
additional strength to natural gas. Hampering the upside tilt in crude Thursday
were suggestions that Nigeria was not planning to limit production to any
pre-determined level. In other words, it would seem that Nigeria and Libya are
prone to over produce.

Technical Outlook

#ENERGIES 4/23/2004: CRUDE OIL (JUN): Market
positioning is positive with the close over the 1st swing resistance. Support
for crude is keyed on 36.06 and below there at 35.31, with resistance pegged at
37.36 and 37.91. The close above the 9-day moving average is a positive
short-term indicator for trend. Momentum studies trending lower from overbought
levels is a bearish indicator and would tend to reinforce lower price action.
The next downside target is now at 35.31.

UNLEADED GAS (JUN): A bullish signal was given
with an upside crossover of the daily stochastics. The next upside objective is
122.14. The market has a bullish tilt coming into today’s trade with the close
above the 2nd swing resistance. Resistance today is at 122.14, while support
should be found around 111.34. The market made a new contract high on the rally.
A positive signal for trend short-term was given on a close over the 9-bar
moving average.

HEATING OIL (JUN): There could be more upside
follow through since the market closed above the 2nd swing resistance. Heating
oil should encounter support around 88.99, with resistance is at 96.59. The
close above the 9-day moving average is a positive short-term indicator for
trend. Momentum studies trending lower from overbought levels is a bearish
indicator and would tend to reinforce lower price action. The next downside
target is now at 88.99.

 

CORN MARKET RECAP

4/22/2004

December closed strong but traders were not too
impressed with the nearby contracts with futures slipping below the 9:30
openings late in the session. The rain in the Midwest forecast is seen as a
bearish factor for the 25% (or so) of the crop which is planted but the rain
could also slow the planting progress. The market is finding support from ideas
of an oversold condition after yesterday’s wash-out and from a slowdown in
selling after strong demand news this morning. The USDA announced a sale of
134,000 tons of US corn to unknown destination this morning which is beginning
to be a daily occurrence. Weekly export sales came in at 1.276 million tons as
compared with trade expectations of 700,000-950,000 tons. Old crop sales were
1.149 million tons as compared with 533,800 tons necessary each week to reach
the USDA projection. Cumulative sales have reached 79.3% of the USDA forecast
for the year as compared with 73.4% on average for this time of the year. The EU
granted import licenses for 275,000 tonnes of maize in the week ending April
20th which brought total imports since the start of the season to 4.272 million
tons. Gulf basis slipped at mid-session in spite of the bullish demand news.
Short-term support for December corn comes in at 300 1/2 with 306 1/4 and 312
3/4 as resistance.

Technical Outlook

#CORN (JUL) 4/23/2004: Momentum studies are still
bearish, but are now at oversold levels and will tend to support reversal action
if it occurs. The next downside target is now at 306 1/4. The close over the
pivot swing is a somewhat positive setup. Market resistance comes in at 314 1/4
today, with support at 306 1/4. The close below the 9-day moving average is a
negative short-term indicator for trend.

 

SOY COMPLEX RECAP

4/22/2004

The market is finding support from ideas that
futures are overbought after the recent sharp break and the rally was led by
meal with tightness expected to develop if crush slows further into May. Buying
support is limited by concerns with China demand due to poor crush margins and
weak internal oil and meal pricing. In addition, there are rumors of a suspected
SARS case in China and talk of possible cancellations of recent imports from
South America for soybeans and oil due to weak crush margins. A forecast for
more rain across the Midwest is seen as a potentially bearish factor for the
market as rain is needed, especially in the western cornbelt. However, rains
could slow planting progress for corn and could slow the talk of a major shift
in acreage from soybeans to corn. Weekly export sales came in at 154,400 tons as
compared with trade expectations of 200,000-400,000 tons. Old crop sales were
126,200 tons as compared with 32,200 tons necessary each week to reach the USDA
projection. Cumulative sales have reached 97.4% of the USDA forecast for the
year as compared with 90.6% on average for this time of the year. Old crop meal
sales were 48,500 tons as compared with 20,900 tons necessary each week to reach
the USDA projection. Cumulative sales have reached 86.9% of the USDA forecast
for the year as compared with 74.5% on average for this time of the year. Oil
sales were just 1000 tons as compared with 0-5000 expected. Near-term support
for November soybeans comes in at 728 3/4 with 738 1/2 (50-day ma) and 745 as
resistance.

Technical Outlook

#SOYBEANS (JUL) 04/23/04 The market has a
slightly positive tilt with the close over the swing pivot. The next area of
resistance is around 947 and 954 2/4, while 1st support hits today at 932 2/4
and below there at 925 2/4. A negative signal for trend short-term was given on
a close under the 9-bar moving average. Daily stochastics declining into
oversold territory suggest the selling may be drying up soon. The next downside
objective is 925 2/4.

MEAL (JUL): Momentum studies are still bearish,
but are now at oversold levels and will tend to support reversal action if it
occurs. The next downside target is now at 291.4. First resistance comes in at
299.1, with support at 294.3. The close below the 9-day moving average is a
negative short-term indicator for trend. Market positioning is positive with the
close over the 1st swing resistance.

BEAN OIL (JUL): A negative signal for trend
short-term was given on a close under the 9-bar moving average. A bearish signal
was triggered on a crossover down in the daily stochastics. The next downside
objective is 31.12. With the close higher than the pivot swing number, the
market is in a slightly bullish posture. Daily swing resistance is found at
31.60 and above there at 31.76. Support should be encountered at 31.28 and
31.12.

 

WHEAT MARKET RECAP

4/22/2004

The lowest close since March 16th leaves the
market vulnerable to more long liquidation selling from speculators. The market
bounced early on ideas of an oversold condition after yesterdays break, however,
the forecast for good rains in the plains and a lack of confirmation of demand
from China helped to turn the market lower shortly after the opening. Part of
the rally early in the week was based on rumors that China bought another 2
million tons of US wheat. While there has been no confirmation of the rumor, the
market tone is even more negative on news that China is selling reserve stocks
to wheat millers (1.88 million tons) to help alleviate tightness ahead of their
harvest in June. Canadian producers in the Prairies are waiting for rain in
order to get the crop planted in many areas which have soils which are too dry.
Stats Canada on Friday will release their survey of farmer intensions to plant.
A lack of news from Egypt and Iraq added to the bearish export outlook. Japan
bought 131,000 tons of wheat at their weekly tender with 65,000 tons from the
US. Weekly export sales came in at 259,600 tons as compared with trade
expectations of 100,000-450,000 tons. Old crop sales were 86,600 tons as
compared with 240,300 tons necessary each week to reach the USDA projection.
Cumulative sales have reached 95% of the USDA forecast for the year as compared
with 89.4% on average for this time of the year. July wheat support comes in at
380 1/2 with resistance at 389 1/2 and 393.

Technical Outlook

#WHEAT (JUL) 4/23/2004: Bearish daily studies
indicate selling minor rallies this session. The close below the 1st swing
support could weigh on the market. Expect near-term support around 383 and below
there at 380 2/4, with resistance levels at 391 and 397. A negative signal for
trend short-term was given on a close under the 9-bar moving average. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The next downside objective is 380 2/4.

 

LIVE CATTLE RECAP

4/22/2004

June cattle collapsed to close sharply lower on
the session as a late surge in fund selling helped to drive the market down to
test last weeks lows. Cash cattle traded moderate volume at $85.00 in the
southern plains which was $1.00 lower on the week and $1.00-$3.00 below trade
expectations. Ideas that supplies of market-ready cattle are on the rise and
that Canadian cattle will be allowed into the US any day now helped trigger some
of the aggressive long liquidation selling from funds and professionals.
Boxed-beef cut-out values were down 56 cents to $159.72 as compared with $162.97
last week at this time. Slaughter came in at 125,000 head as compared with trade
expectations at 120,000-128,000 head.

Technical Outlook

#CATTLE (JUN) 4/23/2004: Momentum studies
trending lower at mid-range could accelerate a price break if support levels are
broken. The next downside objective is 74.72. There could be some early pressure
today given the market’s negative setup with the close below the 2nd swing
support. Support should be encountered at 75.05 and below there at 74.72. Market
resistance is at 76.30 and then again at 77.22. A negative signal for trend
short-term was given on a close under the 9-bar moving average.

 

LEAN HOGS RECAP

4/22/2004

June hogs closed sharply higher on the session
after opening near 50 lower on the day as the bullish cold storage report and
hopes of continued strong exports helped to trigger solid buying support on the
test of 70.00. Weakness in the belly market from a slightly negative monthly
cold storage report and news that cash markets were $1.00 lower helped to cause
the move lower early in the session. However, the sharp drop in total pork in
cold storage in spite of huge pork production during the month of March helped
to turn the psychology bullish. For the week ending April 17th, weekly average
weights for Iowa/Minn came in at 265.1 pounds, unchanged from this past week,
but up 1.9 pounds from last year. Slaughter came in at 385,000 head as compared
with expectations at 380,000 to 390,000 head.

Technical Outlook

#HOGS (JUN) 4/23/2004: Market positioning is
positive with the close over the 1st swing resistance. Resistance levels comes
in at 72.82 and 73.67 today, while support is around 70.57 and then 69.17. The
outside day up gives the market a positive tilt. The upside daily closing price
reversal gives the market a bullish tilt. The close below the 9-day moving
average is a negative short-term indicator for trend. The cross over and close
above the 40-day moving average is an indication the longer-term trend is up.
Momentum studies are still bearish, but are now at oversold levels and will tend
to support reversal action if it occurs. The next downside target is now at
69.17.

 

COCOA MARKET RECAP

4/22/2004

The cocoa market managed a slight corrective
bounce but in order to turn the tide the market will have to come up with a
fresh theme. Right now there doesn’t appear to be much uncertainty toward supply
and physical buyers are uninterested in the market at current price levels.
Maybe the funds decided the recent lows were low enough and decided to bank
profits as they were probably approaching a net short of 20,000 contracts. The
Ivory Coast did suggest that the marketing board would move back to a minimum
price floor buying system and that could in an indirect fashion help to build a
low.

Technical Outlook

COCOA (JUL) 04/23/04 The downside closing price
reversal on the daily chart is somewhat negative. The market tilt is slightly
negative with the close under the pivot. Cocoa should run into resistance at
1349 and above there at 1362 with support at 1327 and 1318. Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
1318.00.

 

COFFEE MARKET RECAP

4/22/2004

July Coffee closed 70 higher on the session after
hitting the lowest level since January 5th early in the session. The reversal
may attract some follow-through technical buying early in the session on Friday.
A slowdown in speculative selling which was active this week and ideas that the
market is oversold helped to support. On the sharp break yesterday, open
interest fell by more than 3000 contracts to 94,933 contracts. Industry buyers
turned more active on the weaker opening which might signal a perception that
prices are at good value. In addition, buyers might view the break as an
opportunity to extend coverage ahead of the official Brazil crop production
forecast for the 2004/2005 season next week.

Technical Outlook

COFFEE (JUL) 4/23/04 The daily closing price
reversal up is positive. The market has a slightly positive tilt with the close
over the swing pivot. Momentum studies are declining, but have fallen to
oversold levels. The next downside objective is now at 68.80. The Coffee
contract should run into resistance at 71.10 and above there at 71.60 with
support at 69.7 and 68.80. The market’s short-term trend is negative as the
close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

4/22/2004

The sugar market inched higher in quiet trade
with July sugar closing 1 tick higher on the session. While Egypt is tendering
for 160,000 tons, cash dealers in London believe they may only but
80,000-100,000 tons at the tender. The lack of selling from fund traders this
week has probably been seen as the most positive development for the market.
Perhaps the two-week consolidation has corrected the overbought condition and
the market is poised for a resumption of the uptrend and another leg higher over
the near-term. Key importers have been waiting for a good break to buy but the
break has not materialized and the pent-up demand could support higher prices
ahead if buyers extend coverage soon. Traders are still in the process of
exiting or rolling out of the May contract which expires on April 30th.

Technical Outlook

#SUGAR (JUL) 4/23/2004: The close over the pivot
swing is a somewhat positive setup. Swing resistance comes in at 6.97, with
support found at 6.77. The close below the 9-day moving average is a negative
short-term indicator for trend. Stochastics trending lower at midrange will tend
to reinforce a move lower especially if support levels are taken out. The next
downside target is now at 6.77.

 

COTTON MARKET RECAP

4/22/2004

The cotton market pushed sharply higher on the
session after early choppy, two-sided trade. In the recent past, the market has
had a tendency to fail to react to friendly demand news but with more talk of
losing near 250,000-400,000 acres to the other grains this season and developing
dryness in the Southeast, (dry Georgia) the market is beginning to turn more
optimistic for higher pricing ahead. Weekly export sales came in at 390,900
bales as compared with trade expectations of 175,000-225,000 bales. China and
Mexico were the largest buyers. Old crop sales were 171,900 bales as compared
with 36,700 bales necessary each week to reach the USDA projection. Cumulative
sales have reached 95.4% of the USDA forecast for the year as compared with
97.8% on average for this time of the year. Shipments were at 323,400 bales for
the week was down from last weeks marketing year high but still considered very
active. China shipped 125,700 bales on the week.

Technical Outlook

#COTTON (JUL) 4/23/2004: A positive signal for
trend short-term was given on a close over the 9-bar moving average. The market
has a slightly positive tilt with the close over the swing pivot. Next
resistance area comes in at 63.79 and then again at 64.09, while support is
targeted at 62.74 and 61.99. Stochastics are at mid-range, but trending higher
which should reinforce a move higher if resistance levels are taken out. The
next upside objective is 64.09.