Are US And European Economies Headed In Opposite Directions?

Technical Outlook

#BONDS (JUN) 04/06/04: It is a slightly negative
indicator that the close was lower than the pivot swing number. Near-term
resistance for bonds is at 110.17 and then again at 111.07, while swing support
hits at 109.16 and below there at 109.05. 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 109.05. The 9-day RSI under 30 indicates the market is approaching
oversold levels.

T-NOTES(JUN) Daily stochastics are trending
lower, but have declined into oversold territory. The next downside objective is
now at 111.27. The market’s close below the pivot swing number is a mildly
negative setup. Near-term resistance for the T-Notes is at 112.26 and then again
at 113.07, while swing support hits at 112.04 and below there at 111.27. 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.

 

STOCK INDICES RECAP

4/5/2004

The stock market acted like it was simply
overbought as US economic information released Monday morning was certainly
strong enough to propel prices higher within the recent range. One would have
expected the stock market to rally off news that manufacturing profits increased
by 7% and that the ISM Non-manufacturing Index came in at the highest level
ever. The market might have been waiting on the start of the earnings season
before attempting to push prices to a new higher trading zone.

Technical Outlook

#S&P500 (JUN) 04/06/04: With the close over the
1st swing resistance number, the market is in a moderately positive position.
Underlying support comes in at 1143.90 and 1137.50, with overhead resistance at
1153.10 and 1155.90. 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 1155.90. With a reading
over 70, the 9-day RSI is approaching overbought levels.

S&P E-Mini (JUN): Rising stochastics at
overbought levels warrant some caution for bulls. The next upside objective is
1157.63. The market has a slightly positive tilt with the close over the swing
pivot. Near-term resistance for the S&P Mini is at 1154.25 and then again at
1157.63, while swing support hits at 1142.75 and below there at 1134.63. A
positive signal for trend short-term was given on a close over the 9-bar moving
average. The market is approaching overbought levels with an RSI over 70.

NASDAQ (JUN) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. A positive setup
occurred with the close over the 1st swing resistance. The market should run
into resistance at 1520.25 and above there at 1525.88 with support at 1499.75
and 1484.88. The 9-day RSI over 70 indicates the market is approaching
overbought levels. Studies are showing positive momentum, but are now in
overbought territory so some caution is warranted. The next upside target is
1525.9.

MINI DOW (JUN) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. The market should
run into resistance at 10584 and above there at 10617 with support at 10476 and
10401. Studies are showing positive momentum, but are now in overbought
territory so some caution is warranted. The next upside target is 10617. A
positive setup occurred with the close over the 1st swing resistance. The 9-day
RSI over 70 indicates the market is approaching overbought levels.

 

CURRENCY MARKET RECAP

4/5/2004

The Dollar was boosted by weak European economic
numbers and by stronger than expected US economic numbers. The Dollar might have
been held back from even bigger gains by the fact that violence in Iraq was
creating concern for US policies in Iraq. With the UK also posting weak economic
numbers the Pound also came under significant pressure. In fact, from the
economic information released Monday it would seem like the US and European
economies are headed in opposite directions.

Technical Outlook

#CURRENCIES 04/06/04: YEN (JUN): The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The swing indicator gave a moderately negative reading with the close
below the 1st support number. Swing resistance is targeted at 95.76 and above
there at 96.04, with the yen finding support around 95.11 and below there at
94.74. Daily stochastics turning lower from overbought levels is bearish and
will tend to reinforce a downside break especially if near-term support is
penetrated. The next downside target is 94.74.

EURO (JUN): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
1.1917. The market is in a bearish position with the close below the 2nd swing
support number. Swing support for the Euro comes in at 1.1917, with overhead
resistance at 1.2073. 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

4/5/2004

The gold market extended the downside wash, as
the Dollar continued to rise and US economic information continued to come in
strong. The trade suggested that gold failed to hold at critical support on the
charts around $416 and that seemed to spark another liquidation wave. Apparently
gold didn’t get any support off the realization that prices within the ISM
Non-manufacturing report were very hot. Given the Dollar climb we suspect that
the bear camp will continue to dominate gold and silver action, but it should be
noted that silver is holding together much better than gold under the current
liquidation phase.

Technical Outlook

#P-METALS 04/06/04: SILVER (MAY): It is a
slightly negative indicator that the close was lower than the pivot swing
number. Initial support for silver is at 802.7 and below there at 793.4 with
resistance likely at 813.2 and 820.7. The market’s close above the 9-day moving
average suggests the short-term trend remains positive. Daily stochastics
turning lower from overbought levels is bearish and will tend to reinforce a
downside break especially if near-term support is penetrated. The next downside
target is 793.4. The 9-day RSI over 70 indicates the market is approaching
overbought levels.

GOLD (JUN): Support for gold today comes in near
409.63, while resistance is pegged at 425.03. 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 409.63. Daily studies
pointing down suggests selling minor rallies. The market’s close below the 1st
swing support number suggests a moderately negative setup for today. The
market’s short-term trend is negative as the close remains below the 9-day
moving average.

 

COPPER MARKET RECAP

4/5/2004

The copper simply fell apart Monday even though
the macro economic case continues to improve. Traders suggested that the soaring
Dollar undermined copper as the arbitrage interest in US copper declined rapidly
with the ongoing rise in the Dollar. Traders also suggested that copper failed
to hold several critical chart points and then began to run into heavy stop loss
selling. After being down by nearly 600 points copper did manage to mitigate the
losses but the bias would seem to be pointing down.

 

ENERGY MARKET RECAP

4/5/2004

The energy market remained weak and with the
trade fearing additional inventory builds on Wednesday prices might remain weak.
Surprisingly the Saudi Oil Company reduced some spot crude prices but didn’t
reduce spot crude sales to the US. With US temps seeing mostly below normal
levels into the middle of April it is possible that heating demand is propping
up demand for heating oil and crude oil. While the market didn’t get too much
support from the ongoing Iraqi troubles the developments there did provide some
support to prices. However, recent developments inside Iraqi have not been close
to pipelines or oil facilities.

Technical Outlook

#ENERGIES 04/06/04: CRUDE OIL (MAY): It is a
mildly bullish indicator that the market closed over the pivot swing number.
Support for crude is keyed on 34.11 and below there at 33.78, with resistance
pegged at 34.66 and 34.88. The market’s short-term trend is negative as the
close remains below the 9-day moving average. Daily stochastics are trending
lower, but have declined into oversold territory. The next downside objective is
now at 33.78.

UNLEADED GAS (MAY): Negative momentum studies in
the neutral zone will tend to reinforce lower price action. The next downside
target is 103.53. It is a slightly negative indicator that the close was lower
than the pivot swing number. Resistance today is at 108.33, while support should
be found around 103.53. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative.

HEATING OIL (MAY): It is a mildly bullish
indicator that the market closed over the pivot swing number. Heating oil should
encounter support around 84.00, with resistance is at 86.50. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. Daily stochastics are trending lower, but have declined into oversold
territory. The next downside objective is now at 84.00. The daily closing price
reversal down puts the market on the defensive.

 

CORN MARKET RECAP

4/5/2004

The market moved to a new contract high early in
the session so the lower close on the session would represent a closing price
reversal from a contract high which might attract some technical selling
interest from technicians. Disappointing exports and fears of fund traders
beginning to liquidate a massive (record) net long position helped to pressure
old crop futures but December managed to close higher due to potential tightness
ahead. The market continues to find support from expectations for the export
demand to remain strong with weekend talk that Malaysia is in the market for
significant tonnage from the US or Argentina. Weekly export inspections came in
at 28.4 million bushels as compared with 32-36 million expected. Cumulative
exports have now hit 1.104 billion bushels as compared with 884.4 million last
year at this time. Gulf basis levels were firming-up this morning in spite of
the move to new highs for futures as demand for grain from exporters is solid.
New crop sales were seem as more active from producers.

Technical Outlook

#CORN (MAY) 04/06/04: Momentum studies are
trending higher, but have entered overbought levels. The near-term upside
objective is at 338 3/4. It is a mildly bullish indicator that the market closed
over the pivot swing number. Market resistance comes in at 338 3/4 today, with
support at 321 1/4. The upside crossover (9 above 18) of the moving averages
suggests a developing short-term uptrend. With a reading over 70, the 9-day RSI
is approaching overbought levels. The rally brought the market to a new contract
high. The daily closing price reversal down puts the market on the defensive.

 

SOY COMPLEX RECAP

4/5/2004

The sweeping reversal from a new contract high
leaves the market vulnerable to aggressive technical selling on signs of a
near-term top. The market pushed high enough early in the session to just barely
reach a new contract high before a significant break off of the highs into
mid-session. The lack of new news regarding demand from China or yield
information from South America left the market with a lack of new news and
futures may have been influenced more by technical considerations. Weekly export
inspections came in at 6.95 million bushels as compared with 10-13 million
expected. Cumulative exports have now hit 767.4 million bushels as compared with
873.5 million last year at this time. The market continues to find support from
fears of declining US stocks as crushers do not seem to be in a position yet to
see the crush pace fall as quickly as world be necessary for a recovery. As a
result, there is more and more talk of importing South American meal and oil.
Traders believe the rains in Argentina and southern Brazil over the weekend were
“too little, too late” to help yields recovery from the dry spells of the past
month. Basis levels in the US were softer due to the recent increase in sales
and a lack of new news on the export front.

Technical Outlook

#SOYBEANS (MAY) 04/06/04: The new contract high
and close below the previous day’s low constitutes a key reversal which is a
bearish signal. The outside day down and close below the previous day’s low is a
negative signal. A new contract high was made on the rally. 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. The
next area of resistance is around 1045 1/2 and 1075 3/4, while 1st support hits
today at 1003 1/2 and below there at 991 3/4. The market’s close above the 9-day
moving average suggests the short-term trend remains positive. Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The next
downside target is 991 3/4.

MEAL (MAY): The daily stochastic’s gave a bearish
indicator with a crossover down. 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 313.1. 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. First resistance comes in at 335.0, with
support at 318.1. The market’s short-term trend is positive on a close above the
9-day moving average. The market’s close below the 1st swing support number
suggests a moderately negative setup for today.

BEAN OIL (MAY): 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 32.10. With the close higher than the pivot swing number, the
market is in a slightly bullish posture. Daily swing resistance is found at
33.14 and above there at 33.70. Support should be encountered at 32.34 and
32.10.

 

WHEAT MARKET RECAP

4/5/2004

Both May and July wheat hit new contract highs
early in the session as strength in the other grains and dry weather in the
western plains helped support. While there was some expectation last week that
this week’s rains could hit the western plains, a shift to a drier forecast for
this week helped support some of the early buying today. In addition, traders
will be watching the weekly crop progress reports closely. The lower close on
the session leaves the market vulnerable to increased technical selling as the
technical reversal is seen as a possible near-term top from chart-based traders.
Weekly export inspections came in at 20.5 million bushels as compared with 18-22
million expected. Cumulative exports have now hit 946.4 million bushels as
compared with 721.5 million last year at this time. The lack of new news on the
China situation and a slow export tender wire could be a factor to contribute to
the sell-off off of the highs as profit-taking selling set in. China was noted
in the weekly report as shipping another 1.1 million bushels for the week.

Technical Outlook

#WHEAT (MAY) 04/06/04: A new contract high was
made on the rally. The downside closing price reversal on the daily chart is
somewhat negative. It is a slightly negative indicator that the close was lower
than the pivot swing number. Look for near-term support at 406 1/2 and below
there at 400 1/4, with resistance levels at 421 1/2 and 430 1/4. The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. Studies are showing positive momentum, but are now in overbought
territory so some caution is warranted. The next upside target is 430 1/4.

 

LIVE CATTLE RECAP

4/5/2004

The market closed moderately higher on the
session with help from strong beef prices and expectations for the spread of
futures to cash to begin to narrow. Slaughter for Monday was 78,000 head as
compared with expectations at 110,000-115,000 head. Boxed-beef cut-out values
were up $2.48 cents to $142.71 as compared with $138.17 last week at this time.
Cash cattle traded at $84.00 late last week with offers to start this week at
$86.00-$87.00. The sharply higher trade is expected to support higher bids from
packers this week.

Technical Outlook

#CATTLE (JUN) 04/06/04: Positive momentum studies
in the neutral zone will tend to reinforce higher price action. The next upside
target is 77.20. With the close higher than the pivot swing number, the market
is in a slightly bullish posture. Support should be encountered at 75.55 and
below there at 74.60. Market resistance is at 76.85 and then again at 77.20. The
daily closing price reversal up is positive. The market’s close above the 9-day
moving average suggests the short-term trend remains positive.

 

LEAN HOGS RECAP

4/5/2004

The rollover to June hogs helped to pressure
April and support the June contract but weak cash market news helped to pressure
early. June closed 7 higher on the session but 90 off of the lows of the day.
Peoria hogs were steady with some locations weaker. The 2-day lean index was
down 77 points to $66.07 as compared with $68.24 one week previous. Slaughter
for Monday was 388,000 head as compared with expectations at 375,000-383,000
head. Talk of weak domestic demand ahead of the Easter Holiday helped to limit
the support.

Technical Outlook

#HOGS (JUN) 04/06/04: The market’s close below
the pivot swing number is a mildly negative setup. Resistance levels comes in at
73.40 and 73.70 today, while support is around 72.37 and then 71.65. The upside
closing price reversal on the daily chart is somewhat bullish. The market’s
short-term trend is negative as the close remains below 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 71.65.

 

COCOA MARKET RECAP

4/5/2004

After making another new low for the move July
cocoa managed to close higher on the session. Apparently forecasts that arrivals
were pegged at 1.01 million tons up to March 31st didn’t discourage buyers even
though many forecasters think that the arrival rate is actually going to come in
above the 1.01 million mark. In short slightly higher physical supply flow is
feared but yet that isn’t preventing buying from pushing up prices. Private
forecasts continue to predict a surplus of 40,000 to 70,000 tons from the coming
year, which is a little limiting.

Technical Outlook

COCOA (MAY) 04/06/04 The market tilt is slightly
negative with the close under the pivot. Cocoa should run into resistance at
1450 and above there at 1458 with support at 1423 and 1404. Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The next
downside target is 1404.25.

 

COFFEE MARKET RECAP

4/5/2004

July coffee finished 145 points lower and might
be targeting the March lows on the charts. Supposedly origin selling forced
coffee prices lower Monday, as there apparently wasn’t enough speculative buying
interest to countervail physical selling pressure. There were also reports of
heavy spread profit taking, which might have prompted more price weakness than
was necessary given the fundamentals of the day.

Technical Outlook

COFFEE (MAY) 4/6/04 The close below the 1st swing
support could weigh on the market. Momentum studies are declining, but have
fallen to oversold levels. The next downside objective is now at 70.95. The
Coffee contract should run into resistance at 72.60 and above there at 73.55
with support at 71.3 and 70.95. The market’s short-term trend is negative as the
close remains below the 9-day moving average. Daily studies pointing down
suggests selling minor rallies.

 

SUGAR MARKET RECAP

4/5/2004

May sugar was 5 ticks on the session and appears
to be favor the top of the last 8 sessions trading range. Apparently the market
was seeing aggressive rolling from the May to August contract and that might
have weakened the front end of the market slightly. While some traders think the
sugar is due a short covering rally we have to think that the market is
attempting to decide if it has the fundamentals to bottom. From a production
outlook it would not seem like sugar has much production at risk and demand
seems fairly constant.

Technical Outlook

#SUGAR (MAY) 04/06/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Swing resistance
comes in at 6.47, with support found at 6.15. The market’s short-term trend is
negative as the close remains below the 9-day moving average. Daily stochastics
are trending lower, but have declined into oversold territory. The next downside
objective is now at 6.15.

 

COTTON MARKET RECAP

4/5/2004

The May contract continued to show weakness with
the market managing to hold above the contract lows forged last week. Reports of
aggressive fund selling weighed on prices but with the funds already net short
in the last COT report and the cotton market down significantly since the last
COT report was measured we have to think that cotton is into oversold territory.
Some traders estimate that cotton will come into the session Tuesday net short
6,000 contracts. It also seems like a strong Dollar is serving to dampen hopes
of an improvement in the export market.

Technical Outlook

#COTTON (MAY) 04/06/04: The market’s close below
the 9-day moving average is an indication the short-term trend remains negative.
It is a slightly negative indicator that the close was lower than the pivot
swing number. Next resistance area comes in at 63.02 and then again at 63.75,
while support is targeted at 61.35 and 60.41. Momentum studies are declining,
but have fallen to oversold levels. The next downside target is 60.41.