Crude Crumbles! Here Are The Details…
BOND MARKET RECAP
12/2/2004
March Bonds closed down 0-10 at 109-21. This was 0-07
up from the low and 0-16 off the high.
March 10 Yr Treasury Notes finished down 0-040 at
111-070, 0-040 off the high and 0-070 up from the low.
The Treasury market fell to the lowest level
since early September during the action Thursday as some traders were fearful of
a strong non farm payroll report. Other longs supposedly exited the market
because of another significant slide in oil prices as that is thought to
facilitate economic growth. We also think that the chance of an international
currency crisis was downgraded slightly after ECB official comments hinted at
intervention against further Dollar losses. The market seems to be fairly
convinced that the monthly payroll report Friday will actually serve to extend
the interest rate projections beyond the upcoming FOMC. In other words, the
market has now begun to think that the Fed’s recent string of rate hikes is due
to be extended over the coming two meetings and possibly even further.
Technical Outlook
BONDS (MAR) 12/03/2004: The downside crossover (9
below 18) of the moving averages suggests a developing short-term downtrend.
Momentum studies are declining, but have fallen to oversold levels. The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative. The market setup is somewhat negative with the close under the
1st swing support. The next downside objective is 108-29. Some caution in
pressing the downside is warranted with the RSI under 30. The next area of
resistance is around 109-30 and 110-16, while 1st support hits today at 109-05
and below there at 108-29.
TNOTES (MAR) 12/03/2004: Daily stochastics are
trending lower but have declined into oversold territory. 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. The next downside
objective is 109-315. Some caution in pressing the downside is warranted with
the RSI under 30. The next area of resistance is around 110-230 and 111-000,
while 1st support hits today at 110-070 and below there at 109-315.
Â
STOCK INDICES RECAP
12/2/2004
December S&P finished up 0.7 at 1190.5, 5 off the
high and 3.4 up from the low.
December S&P E-Mini closed up 0.75 at 1190.5.
This was 3.5 up from the low and 5.25 off the high.
December Dow closed up 9 at 10600. This was 45 up
from the low and 45 off the high.
December Dow E-Mini finished up 28 at 10614, 25 off
the high and 64 up from the low.
The stock market was mostly higher during the session
Thursday but it was clear that persistently lower energy price action was
beginning to lose its ability to drive stock prices higher. Apparently the stock
market was disappointed in retailing projections that were floated Thursday
morning. We also think that a number of longs decided to bank profits ahead of
the monthly payroll report on Friday. In fact, some traders specifically
suggested that a strong payroll reading Friday could end up fostering
expectations of many more US rate hikes of the ¼% caliber. Therefore, the market
is a little concerned that too much economic optimism, in the wake of sharp
declines in oil prices could mean that the Fed becomes more aggressive.
Technical Outlook
S&P 500 (DEC) 12/03/2004: A new contract high was
made on the rally. The crossover up in the daily stochastics is a bullish
signal. Momentum studies are trending higher but have entered overbought levels.
A positive signal for trend short-term was given on a close over the 9-bar
moving average. The close over the pivot swing is a somewhat positive setup. The
next upside target is 1199.39. The next area of resistance is around 1194.89 and
1199.39, while 1st support hits today at 1186.50 and below there at
1182.60.
SP EMINI (DEC) 12/03/2004: A new contract high was
made on the rally. The crossover up in the daily stochastics is a bullish
signal. Daily stochastics have risen into overbought territory which will tend
to support reversal action if it occurs. The market’s close above the 9-day
moving average suggests the short-term trend remains positive. The market has a
slightly positive tilt with the close over the swing pivot. The near-term upside
objective is at 1199.81. The next area of resistance is around 1195.12 and
1199.81, while 1st support hits today at 1186.38 and below there at
1182.32.
NASDAQ (DEC) 12/03/2004: The market rallied to a new
contract high. The daily stochastics gave a bullish indicator with a crossover
up. Daily stochastics have risen into overbought territory which will tend to
support reversal action if it occurs. The market’s short-term trend is positive
on the close above the 9-day moving average. It is a mildly bullish indicator
that the market closed over the pivot swing number. The near-term upside target
is at 1638.87. The 9-day RSI over 70 indicates the market is approaching
overbought levels. The next area of resistance is around 1626.75 and 1638.87,
while 1st support hits today at 1601.25 and below there at 1587.88.
MINIDOW (DEC) 12/03/2004: A bullish signal was given
with an upside crossover of the daily stochastics. Rising stochastics at
overbought levels warrant some caution for bulls. The market’s close above the
9-day moving average suggests the short-term trend remains positive. With the
close higher than the pivot swing number, the market is in a slightly bullish
posture. The next upside objective is 10694. The next area of resistance is
around 10661 and 10694, while 1st support hits today at 10573 and below there at
10517.
Â
CURRENCY MARKET RECAP
12/2/2004
December US Dollar finished up 39 at 8195, 20 off the
high and 70 up from the low.
December Euro finished down 0.52 at 132.69, 0.92 off
the high and 0.31 up from the low.
December Euro Dollar closed down 0.005 at 97.52. This
was 0.0025 up from the low and 0.005 off the high.
December Canadian Dollar closed down 0.62 at 83.83.
This was 0.13 up from the low and 0.92 off the high.
December British Pound finished down 0.99 at 192.16,
1.44 off the high and 0.52 up from the low.
December Swiss closed down 0.81 at 86.86. This was
0.31 up from the low and 0.77 off the high.
December Japanese Yen closed down 0.51 at 96.92. This
was 0.19 up from the low and 0.73 off the high.
The Dollar finally saw support from an unlikely
source, the ECB. Following a regular ECB meeting it seems that an ECB official
hinted that further Dollar declines would bring about a response and that
quickly inspired a short covering bounce in the Dollar. Also helping to support
the Dollar were significant additional declines in energy prices and a mostly
positive US equity market trade. We also think that a number of long term Dollar
shorts simply decided to bank profits rather than risk the upcoming monthly US
payroll report. Therefore, there is a hint of a trend change in the air and
possibly the type of economic numbers that would justify a change.
Technical Outlook
YEN (DEC) 12/03/2004: A bearish signal was triggered
on a crossover down in the daily stochastics. Momentum studies are trending
lower from high levels which should accelerate a move lower on a break below the
1st swing support. A negative signal for trend short-term was given on a close
under the 9-bar moving average. The outside day down and close below the
previous day’s low is a negative signal. The defensive setup, with the close
under the 2nd swing support, could cause some early weakness. The next downside
target is now at 96.14. The next area of resistance is around 97.37 and 97.97,
while 1st support hits today at 96.46 and below there at 96.14.
EURO (DEC) 12/03/2004: The rally brought the market
to a new contract high. The daily stochastics have crossed over down which is a
bearish indication. Momentum studies trending lower from overbought levels is a
bearish indicator and would tend to reinforce lower price action. The close
above the 9-day moving average is a positive short-term indicator for trend. The
outside day down is somewhat negative. There could be some early pressure today
given the market’s negative setup with the close below the 2nd swing support.
The next downside objective is now at 131.62. With a reading over 70, the 9-day
RSI is approaching overbought levels. The next area of resistance is around
133.30 and 134.07, while 1st support hits today at 132.08 and below there at
131.62.
Â
PRECIOUS METALS RECAP
12/2/2004
February Gold closed down 3.6 at 452.3. This was 3.6
up from the low and 5.4 off the high.
March Silver finished down 0.12 at 7.96, 0.275 off
the high and 0.045 up from the low.
January Platinum closed up 5.6 at 884.2. This was 7.7
up from the low and 2.8 off the high.
The metals market came under moderate liquidation
pressure in the wake of a surprising strong bounce in the US Dollar. With the
gold and silver markets both holding record spec and fund long positioning it is
not surprising to see minor chart failures foster even more significant chart
failures. The threat of intervention was also present following comments from
the ECB and seeing a sustained bounce in the Dollar is certainly something that
scares the existing longs in gold and silver. Until the Dollar issue is
resolved, we suspect that gold and silver might continue to be undermined.
Technical Outlook
SILVER (MAR) 12/03/2004: The daily stochastics gave a
bearish indicator with a crossover down. Stochastics turning bearish at
overbought levels will tend to support lower prices if support levels are
broken. The market’s short-term trend is positive on the close above the 9-day
moving average. The downside closing price reversal on the daily chart is
somewhat negative. It is a slightly negative indicator that the close was under
the swing pivot. The next downside objective is now at 769.8. The next area of
resistance is around 812.0 and 833.8, while 1st support hits today at 780.1 and
below there at 769.8.
GOLD (FEB) 12/03/2004: The market rallied to a new
contract high. Momentum studies are trending lower from high levels which should
accelerate a move lower on a break below the 1st swing support. The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The market setup is somewhat negative with the close under the 1st
swing support. The next downside target is now at 443.8. The next area of
resistance is around 456.8 and 461.7, while 1st support hits today at 447.8 and
below there at 443.8.
Â
COPPER MARKET RECAP
12/2/2004
March Copper finished down 6.45 at 137.50, 5.10 off
the high and 0.50 up from the low.
The copper market made what appeared to be the second
largest decline of the year which is saying a lot considering the massive break
in October. While copper was significantly long and vulnerable to stop loss
selling, the break Thursday was thought to be mostly technical in nature.
Certainly a slightly higher US Dollar undermines the US copper market and some
traders think that prices were excessively overdone around the highs this week.
Apparently both the funds and the trade were sellers with the small specs mostly
on the sidelines. We also suspect that some longs decided to bank profits ahead
of the US payroll report and the weekly Shanghai stocks report Friday morning.
Â
ENERGY MARKET RECAP
12/2/2004
January Crude Oil closed down 2.24 at 43.25. This was
0.75 up from the low and 1.35 off the high.
January Heating Oil closed down 7.21 at 125.72. This
was 0.97 up from the low and 4.78 off the high.
January Unleaded Gas finished down 5.98 at 114.14,
3.86 off the high and 1.39 up from the low.
January Natural Gas finished down 0.60 at 6.81, 0.59
off the high and 0.12 up from the low.
January Propane closed down 0.05 at 0.79. This was
equal to the low and 0.06 off the high.
While the energy complex continued to cave in under
small spec and fund long liquidation it would seem that comments from Nigeria
added to the downside. Nigeria in a meeting at the White House talked up the
potential for increased production with President Bush and that gave the market
an added downside push. The market also saw suggestions from Nigeria that a
production cut from OPEC next week would send the wrong message to the market
and that added to the downside. With the weekly natural gas inventory reading
showing a big revision in the prior weeks draw and putting the current draw at
only 5 bcf there was even more reason to sell. The natural gas market actually
boosted the annual surplus tally on the week from 150 bcf to 240 bcf and that
contributed to the slide in prices. OPEC did seem to begin the process of
supporting prices (probably because the magnitudes of the declines are now
scaring some members). Saudi Arabia said they had not ruled out a production cut
in the coming meeting and that at least begins to put some support under the
market.
Technical Outlook
CRUDE OIL (JAN) 12/03/2004: The downside crossover of
the 9 & 18 bar moving average is a negative signal. Momentum studies
trending lower at mid-range should accelerate a move lower if support levels are
taken out. The market’s short-term trend is negative as the close remains below
the 9-day moving average. The gap lower price action on the day session chart is
a bearish indicator for trend. The swing indicator gave a moderately negative
reading with the close below the 1st support number. The next downside objective
is 41.30. Some caution in pressing the downside is warranted with the RSI under
30. The next area of resistance is around 44.30 and 45.50, while 1st support
hits today at 42.20 and below there at 41.30.
UNLEADED (JAN) 12/03/2004: Momentum studies are still
bearish but are now at oversold levels and will tend to support reversal action
if it occurs. The market’s close below the 9-day moving average is an indication
the short-term trend remains negative. The gap lower price action on the day
session chart is a bearish indicator for trend. The market’s close below the 1st
swing support number suggests a moderately negative setup for today. The next
downside objective is 109.51. The 9-day RSI under 30 indicates the market is
approaching oversold levels. The next area of resistance is around 116.76 and
120.00, while 1st support hits today at 111.52 and below there at
109.51.
HEATING OIL (JAN) 12/03/2004: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative. More selling pressure is likely given yesterday’s gap
lower price action on the day session chart. There could be some early pressure
today given the market’s negative setup with the close below the 2nd swing
support. The next downside objective is now at 120.93. The 9-day RSI under 30
indicates the market is approaching oversold levels. The next area of resistance
is around 128.59 and 132.42, while 1st support hits today at 122.85 and below
there at 120.93.
Â
CORN MARKET RECAP
12/2/2004
December Corn finished up 1 at 192 1/2, 1/2 off
the high and 1 1/2 up from the low. March Corn closed up 3/4 at 204. This was 1
1/2 up from the low and 1/2 off the high.
A new contract low followed by a higher close could
attract short-covering in the corn market. Traditional technical indicators are
in an oversold status which helped the market bounce after the poor export sales
news failed to generate significant new selling on the move to new lows. Weekly
export sales came in at 585,000 tons as compared with 805,000 tons necessary
each week to reach the USDA projection and trade expectations for 800,000-1.0
million tons. Japan was the best buyer at 130,200 tons followed by Canada at
88,000 tons. Cumulative sales have reached 38.4% of the USDA forecast for the
season as compared with 40.3% on average for this time of the year. Deliveries
came in at 950 contracts vs. 1377 contracts yesterday. Support for March corn
will emerge at 203 and 200 1/2 with 205 1/2 and 208 3/4 as resistance.
Technical Outlook
CORN (MAR) 12/03/2004: The sell-off took the market
to a new contract low. Daily stochastics are trending lower but have declined
into oversold territory. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative. The upside closing price
reversal on the daily chart is somewhat bullish. It is a mildly bullish
indicator that the market closed over the pivot swing number. The next downside
target is now at 201 3/4. With a reading under 30, the 9-day RSI is approaching
oversold levels. The next area of resistance is around 205 and 205 3/4, while
1st support hits today at 203 and below there at 201 3/4.
Â
SOY COMPLEX RECAP
12/2/2004
January Soybeans finished down 7 1/4 at 520 3/4, 7
3/4 off the high and 1/2 up from the low. March Soybeans closed down 6 1/4 at
525 1/4. This was 1/4 up from the low and 6 3/4 off the high.
January Soymeal closed down 1.6 at 152.0. This was
0.1 up from the low and 1.9 off the high.
January Soybean Oil finished down 0.24 at 20.16, 0.22
off the high and 0.02 up from the low.
January soybeans closed lower for the 6th session in
a row for a total loss of over 40 cents on the break. Weak export sales and
concerns that China demand has declined due to weaker crush margins helped
trigger the early weakness. Weekly export sales came in at 407,100 tons as
compared with 285,000 necessary each week to reach the USDA projection and trade
expectations for 650,000-850,000 tons. Mexico was the largest buyer for 88,200
tons followed by China at 82,900 tons. Cumulative sales have reached 58.7% of
the USDA forecast for the season as compared with 59.4% on average for this time
of the year. Weekly sales for meal were 110,600 tons as compared with 50,300
tons necessary each week to reach the USDA projection and trade expectations for
50,000-100,000 tons. Cumulative sales have reached 54.7% of the USDA forecast
for the season as compared with 45.4% on average for this time of the year. Oil
sales were 9400 tons as compared with 6800 tons necessary each week to reach the
USDA projection and trade expectations for 5,000-10,000 tons. Cumulative sales
have reached 39.7% of the USDA forecast for the season as compared with 23.7% on
average for this time of the year. Oil deliveries were 140 lots vs. 113 lots
yesterday and meal at 239 lots, equal to yesterday. Brazil soybean exports for
November came in at 485,000 tonnes as compared with 524,300 tons last year.
Resistance for January soybeans comes in at 527 and 535 3/4 with 516 and 512 as
next support levels.
Technical Outlook
BEANS (JAN) 12/03/2004: Negative momentum studies in
the neutral zone will tend to reinforce lower price action. The close below the
9-day moving average is a negative short-term indicator for trend. The close
below the 1st swing support could weigh on the market. The next downside target
is 514 1/2. The next area of resistance is around 524 3/4 and 530 3/4, while 1st
support hits today at 516 3/4 and below there at 514 1/2.
MEAL (JAN) 12/03/2004: Momentum studies trending
lower at mid-range should accelerate a move lower if support levels are taken
out. The market’s close below the 9-day moving average is an indication the
short-term trend remains negative. The market tilt is slightly negative with the
close under the pivot. The next downside objective is 151.6. The next area of
resistance is around 154.2 and 155.7, while 1st support hits today at 152.2 and
below there at 151.6.
BEANOIL (JAN) 12/03/2004: A negative indicator was
given with the downside crossover of the 9 & 18 bar moving average. Momentum
studies are still bearish but are now at oversold levels and will tend to
support reversal action if it occurs. The close below the 9-day moving average
is a negative short-term indicator for trend. The market setup is somewhat
negative with the close under the 1st swing support. The next downside target is
now at 20.00. The next area of resistance is around 20.34 and 20.55, while 1st
support hits today at 20.07 and below there at 20.00.
Â
WHEAT MARKET RECAP
12/2/2004
December Wheat finished down 2 1/2 at 283 1/2,
4 off the high and 1 up from the low. March Wheat closed down 1 1/4 at 296 1/4.
This was 1 1/4 up from the low and 3 1/2 off the high.
Slow sales and weakness in soybeans pressured the
market to a new contract low early in the session but oversold ideas support a
bounce into the mid-session. However, weakness in the other grains and a turn
higher in the US dollar helped push the market to a new contract low close.
Weekly export sales came in at 336,700 tons as compared with 298,600 tons
necessary each week to reach the USDA projection and trade expectations for
300,000-450,000 tons. Egypt was the best buyer at 120,200 tons followed by the
Philippines at 51,000 tons. Cumulative sales have reached 69.8% of the USDA
forecast for the season as compared with 59.5% on average for this time of the
year. As a result of the fast sales pace, the USDA could raise exports and lower
ending stocks in the December 10th USDA report. At their weekly tender, Japan
bought 110,000 tons of wheat with 45,000 of the total coming from the US. The EU
awarded export licenses for 159,000 tonnes of soft wheat at their weekly tender.
Resistance for March wheat comes in at the 303 and 308 with 295 and 291 as
support.
Technical Outlook
WHEAT (MAR) 12/03/2004: The sell-off took the market
to a new contract low. Daily stochastics are trending lower but have declined
into oversold territory. The close below the 9-day moving average is a negative
short-term indicator for trend. The market’s close below the pivot swing number
is a mildly negative setup. The next downside target is now at 292 1/4. With a
reading under 30, the 9-day RSI is approaching oversold levels. The next area of
resistance is around 298 1/2 and 301 1/2, while 1st support hits today at 294
and below there at 292 1/4.
Â
LIVE CATTLE RECAP
12/2/2004
February Live Cattle closed down 0.87 at 88.00. This
was 0.45 up from the low and 0.55 off the high.
January Feeder Cattle finished down 1.17 at 102.10,
0.80 off the high and 0.30 up from the low.
The dry forecast for the central and southern plains
along with concerns that US producers may try to dump cattle on the market
before the border opens with Canada were factors which helped drive cattle
futures sharply lower on the session. Boxed-beef cut-out values were up $1.27 at
mid-session to $149.39 as compared with $138.38 last week at this time. The
surge in beef prices could help support packer margins and allow packers to pay
higher in the cash market next week. Selling intensified due to the bearish
technical action this week.
Technical Outlook
CATTLE (FEB) 12/03/2004: The market back below the
40-day moving average suggests the longer-term trend could be turning down. The
daily stochastics gave a bearish indicator with a crossover down. Stochastics
trending lower at midrange will tend to reinforce a move lower especially if
support levels are taken out. The market’s short-term trend is negative as the
close remains below the 9-day moving average. The swing indicator gave a
moderately negative reading with the close below the 1st support number. The
next downside objective is 87.050. The next area of resistance is around 88.500
and 89.020, while 1st support hits today at 87.520 and below there at
87.050.
Â
LEAN HOGS RECAP
12/2/2004
February Lean Hogs closed up 0.02 at 75.92. This was
0.92 up from the low and 0.52 off the high.
February Pork Bellies finished up 0.67 at 100.77,
0.32 off the high and 1.12 up from the low.
February hogs opened higher on the session at 76.10
and collapsed all the way to 75.00 before finding support and rallied above the
opening late in the session as the solid gains in pork values this week and the
discount of futures to cash helped support. The CME 2-Day Lean Index for the
period ending November 30th was reported at 77.98, up 60 cents from the previous
session and down from 78.20 last week at this time. While cash has been steady
over the past week and higher over the past few days, the surge higher in pork
values has helped to keep packer demand strong.
Technical Outlook
HOGS (FEB) 12/03/2004: Momentum studies trending
lower from overbought levels is a bearish indicator and would tend to reinforce
lower price action. The market’s short-term trend is positive on the close above
the 9-day moving average. It is a slightly negative indicator that the close was
lower than the pivot swing number. The next downside objective is now at 74.370.
The next area of resistance is around 76.620 and 77.250, while 1st support hits
today at 75.200 and below there at 74.370.
Â
COCOA MARKET RECAP
12/2/2004
March Cocoa finished down 7 at 1652, 25 off the high
and 20 up from the low.
The cocoa market failed to respond to a couple
bullish fundamental stories floated Thursday during the session. First of all a
private forecast suggested that the coming Ivory Coast harvest might be down by
up to 200,000 tons from the prior record production due to lower inputs by
farmers. Supporting prices during the session were reports of fund buying in
London but that rally was basically thwarted by increased origin selling. We
suspect that ongoing African Peace efforts continue to foster the illusion of
calm at the Ivory Coast and that seems to make the sellers a little more
confident.
Technical Outlook
COCOA (MAR) 12/03/2004: The daily stochastics have
crossed over up which is a bullish indication. Momentum studies are trending
higher from mid-range, which should support a move higher if resistance levels
are penetrated. The close above the 9-day moving average is a positive
short-term indicator for trend. The daily closing price reversal down is a
negative indicator for prices. It is a slightly negative indicator that the
close was under the swing pivot. The near-term upside objective is at 1698. The
next area of resistance is around 1674 and 1698, while 1st support hits today at
1630 and below there at 1609.
Â
COFFEE MARKET RECAP
12/2/2004
March Coffee closed down 0.80 at 97.80. This was 1.10
up from the low and 4.70 off the high.
March coffee closed 80 points lower on the session
but 470 points off of the highs of the day. The sweeping reversal from contract
highs could signal a near-term top; especially if fund traders decide to exit
part of their record high net long position. London futures closed higher but
the focus of attention in New York was on the long liquidation trend. For
October, the first month of the 2004/2005 season, exporting countries of the
International Coffee Organization exported 7.023 million bags as compared with
6.465 million bags last year. Traders on the floor indicated some increased
producer selling in the pit but there was a lack of buying support from
roasters.
Technical Outlook
COFFEE (MAR) 12/03/2004: The market rallied to a new
contract high. A bearish signal was triggered on a crossover down in the daily
stochastics. Daily stochastics turning lower from overbought levels is bearish
and will tend to reinforce a downside break especially if near-term support is
penetrated. A positive signal for trend short-term was given on a close over the
9-bar moving average. The daily closing price reversal down is a negative
indicator for prices. The market’s close below the pivot swing number is a
mildly negative setup. The next downside target is now at 92.90. The market is
becoming somewhat overbought now that the RSI is over 70. The next area of
resistance is around 100.65 and 104.45, while 1st support hits today at 94.90
and below there at 92.90.
Â
SUGAR MARKET RECAP
12/2/2004
March Sugar closed down 0.08 at 8.82. This was 0.01
up from the low and 0.14 off the high.
March sugar closed 8 lower on the session and down to
the lowest close since November 19th which leaves futures vulnerable to long
liquidation selling. Producer selling emerged to push the market lower on the
day and then speculative long liquidation selling helped drive the market lower.
The lack of new business in the cash market leaves futures vulnerable to a
significant technical correction unless trade house buying emerges to support
the market soon. With speculators holding a net long position of near 126,000
contracts in the last traders report, long liquidation could intensify on a
break. Brazil sugar exports in November were reported at 1.55 million tons, up
42% from last years pace.
Technical Outlook
SUGAR (MAR) 12/03/2004: A bearish signal was
triggered on a crossover down in the daily stochastics. 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 market’s
short-term trend is negative as the close remains below the 9-day moving
average. 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 downside objective is now at 8.71. Daily
studies pointing down suggests selling minor rallies. The next area of
resistance is around 8.89 and 9.00, while 1st support hits today at 8.75 and
below there at 8.71.
Â
COTTON MARKET RECAP
12/2/2004
March Cotton finished down 0.27 at 43.62, 0.28 off
the high and 0.32 up from the low.
March cotton pushed lower early in the session as the
positive news from the weekly sales report was not enough to offset the
technical selling and new fund selling on the market. Improving weather in the
West Texas region for harvest added to the bearish tone. Weekly export sales
came in at 206,000 bales as compared with trade expectations for 150,000-220,000
bales. Cumulative sales have reached 59.2% of the USDA forecast for the season
as compared with 65.3% on average for this time of the year. Export shipments
for the week came in at 143,100 bales from trade expectations at 130,000-175,000
bales. West Africa production was pegged at 4.72 million bales for the 2004/2005
season which is up 6% from last year. Certified cotton stocks deliverable to the
exchange as of December 1st totaled 81,442 bales from 76,482 bales two days ago.
Technical Outlook
COTTON (MAR) 12/03/2004: Momentum studies are rising
from mid-range, which could accelerate a move higher if resistance levels are
penetrated. The close below the 9-day moving average is a negative short-term
indicator for trend. The market tilt is slightly negative with the close under
the pivot. The near-term upside objective is at 44.20. The next area of
resistance is around 43.91 and 44.20, while 1st support hits today at 43.32 and
below there at 43.01.