What The Inside Day In Gold Means
BOND MARKET RECAP
9/23/2003
The bonds managed to right the ship Tuesday after
some early weakness. In fact, it appeared that bonds managed to recover into
statements from a Fed member that the jobs situation remains the biggest threat
to the US recovery. Countervailing the rally attempt was a partially positive
equity market trade and comments from the Fed that the economy is recovering
even if the jobs recovery is lagging behind. Therefore, the bonds saw enough
fundamental information to lock prices within a trading range.
Technical Outlook
BONDS (DEC) 9/24/2003: The market has a slightly
positive tilt with the close over the swing pivot. Near-term resistance for
bonds is at 109.16 and then again at 109.30, while swing support hits at 108.02
and below there at 107.02. A positive signal for trend short-term was given on a
close over the 9-bar moving average. Rising stochastics at overbought levels
warrant some caution for bulls. The next upside objective is 109.30.
T-NOTES(DEC) Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
112.29. It is a mildly bullish indicator that the market closed over the pivot
swing number. The major trend is down with the cross over back below the 40-day
moving average. Near-term resistance for the T-Notes is at 112.22 and then again
at 112.29, while swing support hits at 111.30 and below there at 111.14. The
market’s short-term trend is positive on a close above the 9-day moving average.
STOCK INDICES RECAP
9/23/2003
A mostly inside trading range was seen Tuesday
with the market rejecting early weakness and managing to trade higher in the
afternoon action. Apparently the market was hopeful that earnings reports after
the close would bolster confidence. We also think that the stock market
responded favorably to talk from the Fed that the US economy was recovering even
if the jobs threat remained a potential problem. We also think some traders were
hopeful that the US was attempting to make progress on the Iraqi situation at
the UN and that helped foster a good feeling among the trade.
Technical Outlook
S&P500 (DEC) 9/24/2003: The close over the pivot
swing is a somewhat positive setup. Underlying support comes in at 1020.80 and
1015.45, with overhead resistance at 1030.00 and 1033.85. 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 objective is now at
1015.45.
S&P E-Mini (DEC): Negative momentum studies in
the neutral zone will tend to reinforce lower price action. The next downside
target is 1006.50. It is a slightly negative indicator that the close was lower
than the pivot swing number. Near-term resistance for the S&P Mini is at 1029.25
and then again at 1038.50, while swing support hits at 1013.25 and below there
at 1006.50. The market’s close below the 9-day moving average is an indication
the short-term trend remains negative.
NASDAQ (DEC) A positive signal for trend
short-term was given on a close over the 9-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 1401.75 and above there at
1409.38 with support at 1376.25 and 1358.38. Stochastics turning bearish at
overbought levels will tend to support lower prices if support levels are
broken. The next downside objective is 1358.38.
CURRENCY MARKET
RECAP
9/23/2003
The Dollar did manage to make another new low for
the move but flatly rejected that lower bid. However, with the BOJ possibly out
of action Tuesday due to holiday it is uncertain if the BOJ is actually on the
intervention sidelines. In other words, the sharp rise in the yen could bring
about some response in the overnight trade. The Canadian Dollar posted an
extremely damaging trade Tuesday and many are suggesting that the Canadian might
be primed to trade in sync with the Dollar rather than losing significant export
business to US companies.
Technical Outlook
YEN (DEC): A positive signal for trend short-term
was given on a close over the 9-bar moving average. The market made a new
contract high on the rally. The market could take on a defensive posture with
the daily closing price reversal down. The market tilt is slightly negative with
the close under the pivot. Swing resistance is targeted at 89.77 and above there
at 90.22, with the yen finding support around 89.13 and below there at 88.94.
Rising stochastics at overbought levels warrant some caution for bulls. The next
upside objective is 90.22. The market is approaching overbought levels with an
RSI over 70.
EURO (DEC): Daily stochastics have risen into
overbought territory which will tend to support reversal action if it occurs.
The near-term upside target is at 1.1488. The defensive setup, with the close
under the 2nd swing support, could cause some early weakness. Swing support for
the Euro comes in at 1.1398, with overhead resistance at 1.1488. The close above
the 9-day moving average is a positive short-term indicator for trend. More
selling pressure is likely given yesterday’s gap lower price action on the day
session chart.
PRECIOUS METALS
RECAP
9/23/2003
An inside day in gold shows the necessity for
distinct direction from the Dollar. It would seem that investors are sticking
with gold regardless of the overbought positioning, as the longs don’t seem to
be easily pushed back to the sidelines. The trade fully accepts that the primary
driving force behind prices will be the Dollar but at the same time the Press is
still picking up talk about mergers and buyouts in the mining sector and that
helps to keep investors interested in gold futures. It should be noted that
Japan was on holiday Tuesday and therefore the Dollar action might have been
restrained and that could make for an important opening Wednesday morning.
Technical Outlook
SILVER (DEC): The market tilt is slightly
negative with the close under the pivot. Initial support for silver is at 519.5
and below there at 513.8 with resistance likely at 524.8 and 529.5. 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.
Stochastics turning bearish at overbought levels will tend to support lower
prices if support levels are broken. The next downside objective is 513.8.
GOLD (DEC): Support for gold today comes in near
382.80, while resistance is pegged at 390.40. Daily stochastics have risen into
overbought territory which will tend to support reversal action if it occurs.
The near-term upside target is at 390.40. It is a slightly negative indicator
that the close was under the swing pivot. The close above the 9-day moving
average is a positive short-term indicator for trend.
COPPER MARKET RECAP
9/23/2003
The market saw some professional trades throw in
the towel Tuesday, as if a macro economic break was ahead. Apparently as the
market broke there was very little volume to slow the slide especially since the
US equity market is without direction and some of the Asian traders are afraid
to move in the arbitrage market because of recent wild currency fluctuations.
Around the highs Tuesday the copper market was nearly 500 points above the
August lows and with the COT report showing a 44,000 contract spec and fund long
the market should be considered vulnerable to technical stop loss selling on
even minor declines.
ENERGY MARKET RECAP
9/23/2003
In the end the Iraqi oil Minister is expected to
attend the OPEC meeting and it would appear that Venezuela will have to put up
with the decision. Therefore, there is the chance that tensions at the OPEC
meeting could be frayed and that could be viewed as slightly negative to prices.
Kuwait suggested that 2004 could be a bad year with fears of overproduction and
lower prices likely without strong management by OPEC. OPEC apparently thinks
that little will be accomplished in the coming meeting because they have already
planned an emergency meeting for mid December. The need to meet again means that
they are watching Iraqi oil production closely.
Technical Outlook
CRUDE OIL (NOV): 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. Support for crude is keyed on 26.84
and below there at 26.67, with resistance pegged at 27.43 and 27.85. The close
below the 9-day moving average is a negative short-term indicator for trend. The
crossover up in the daily stochastics is a bullish signal. The near-term upside
target is at 27.85. Some caution in pressing the downside is warranted with the
RSI under 30.
UNLEADED GAS (NOV): Daily stochastics declining
into oversold territory suggest the selling may be drying up soon. The next
downside objective is 73.90. The market has a slightly positive tilt with the
close over the swing pivot. Resistance today is at 76.10, while support should
be found around 73.90. A negative signal for trend short-term was given on a
close under the 9-bar moving average. The market is approaching over sold levels
on an RSI reading under 30.
HEATING OIL (NOV): The close over the pivot swing
is a somewhat positive setup. Heating oil should encounter support around 71.00,
with resistance is at 73.60. The close below the 9-day moving average is a
negative short-term indicator for trend. The crossover up in the daily
stochastics is a bullish signal. The near-term upside target is at 73.60. Some
caution in pressing the downside is warranted with the RSI under 30.
CORN MARKET RECAP
9/23/2003
Corn closed sharply lower led by fears that the
accelerating harvest in the weeks ahead will help pressure cash and futures
markets. With 12% already harvested and a dry 6-10 and 8-14 day forecast from
the National Weather Service, seasonal weakness is now anticipated. Fears that
yields will be high after early tests continue to show large yields in the
central Midwest helped pressure. Improving exports and the break in the dollar
have not been factors to support. The USDA reported a sale of 160,000 tons of US
corn sold to unknown destination.
Technical Outlook
CORN (DEC) 9/24/2003: 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 221 . The defensive setup, with
the close under the 2nd swing support, could cause some early weakness. Market
resistance comes in at 228 today, with support at 221 . The close below the
9-day moving average is a negative short-term indicator for trend.
SOY COMPLEX RECAP
9/23/2003
The slightly lower close after a new contract
high could spark more long liquidation selling in soybeans as the market is
extremely overbought basis traditional technical indicators. The failure to
close above 652 1/2 for the nearby contract (key weekly and monthly chart
resistance) and the close which was near 9 cents off of the highs may trigger
enough selling to help correct the short-term overbought condition of the
market. The USDA announced daily sales of 120,000 tons of US soybeans to China,
120,000 tons of US soybeans to Indonesia and 180,000 tons of US meal to the
Netherlands. This news helped spark the early rally. Oil managed a contract high
but the products and soybeans just ran out of new buying support.
Technical Outlook
SOYBEANS (NOV) 09/24/03 The market made a new
contract high on the rally. The market could take on a defensive posture with
the daily closing price reversal down. The market has a slightly positive tilt
with the close over the swing pivot. The next area of resistance is around 657
and 664 1/2, while 1st support hits today at 645 and below there at 640 . The
market’s close on the 9-day moving average is neutral. Rising stochastics at
overbought levels warrant some caution for bulls. The next upside objective is
664 1/2. The market is approaching overbought levels with an RSI over 70.
MEAL (DEC): Daily stochastics have risen into
overbought territory which will tend to support reversal action if it occurs.
The near-term upside target is at 197.9. The market rallied to a new contract
high. The daily closing price reversal down is a negative indicator for prices.
First resistance comes in at 195.6, with support at 191.7. The close above the
9-day moving average is a positive short-term indicator for trend. The close
over the pivot swing is a somewhat positive setup. The market is becoming
somewhat overbought now that the RSI is over 70.
BEAN OIL (DEC): A positive signal for trend
short-term was given on a close over the 9-bar moving average. Rising
stochastics at overbought levels warrant some caution for bulls. The next upside
objective is 24.39. With the close higher than the pivot swing number, the
market is in a slightly bullish posture. The market made a new contract high on
the rally. Daily swing resistance is found at 24.14 and above there at 24.39.
Support should be encountered at 23.67 and 23.45. The market is approaching
overbought levels with an RSI over 70.
WHEAT MARKET RECAP
9/23/2003
Wheat closed near unchanged in choppy, two-sided
trade finding a lack of direction from the other grains and a lack of
follow-through selling from large speculators to force lower pricing. While
routine export business seems to be picking up on the break and cumulative sales
numbers are ahead of a normal pace to reach the USDA projection, focus is still
on good weather for planting next years crop. In addition, the market
experienced some selling from weakness in corn and news that a delegation from
Syria will visit Egypt to try to export wheat. The country is believed to have
near 500,000-800,000 tons of wheat available for export. Reports from Scientists
in Australia that some wheat areas could experience permanent drought conditions
in the future due to global warming developments and talk of wheat crop problems
in Argentina failed to help support.
Technical Outlook
WHEAT (DEC) 9/24/2003: The market tilt is
slightly negative with the close under the pivot. Expect near-term support
around 341 and below there at 337 1/4, with resistance levels at 348 1/2 and 352
1/4. A negative signal for trend short-term was given on a close under the 9-bar
moving average. Rising from over sold levels, daily momentum studies would
support higher prices especially on a close above resistance. The next upside
objective is 352 1/4.
LIVE CATTLE RECAP
9/23/2003
Cattle closed limit-up in the 2003 contracts as
sharply higher beef prices triggered massive small spec short-covering. Small
speculators were active sellers in the past few weeks and have been fighting the
uptrend for the past several months. Buy-stops above the market fueled the
strong gains with near 200 contracts of unfilled buy orders in the poor for
October cattle at the close. Sharply lower slaughter helped support higher beef
prices. Boxed-beef cut-out values for choice beef 650-700 pounds were up $2.35
to $163.15 as compared with $161.91 last week. Select beef was up $.96 to
$131.86 as compared with $137.27 last week. Feeder cattle made new contract and
all-time highs.
Technical Outlook
CATTLE (DEC) 9/24/2003: Momentum studies trending
lower at mid-range could accelerate a price break if support levels are broken.
The next downside objective is 83.05. The market has a bullish tilt coming into
today’s trade with the close above the 2nd swing resistance. Support should be
encountered at 84.10 and below there at 83.05. Market resistance is at 85.50 and
then again at 85.85. A positive signal for trend short-term was given on a close
over the 9-bar moving average.
LEAN HOGS RECAP
9/23/2003
The hog market pushed moderately lower with
weakness in the cash market and fears of more weakness for later this week as
the primary bearish force. Traders are also moving to the sidelines ahead of the
Hogs and Pigs report on Friday and due to the overbought condition of the
market. Cash markets were mostly .50-$1.00 lower with Peoria down $1.50. The
lack of strength ion the pork cut-out values in spite of the recent reduction in
slaughter (North Carolina plants still down) would suggest that once the
slaughter is back to normal that the “extra” hogs at higher weights could weigh
on pork values and help drag cash markets lower. Traders are looking for the
weekly cold storage report to show an out-movement of 500,000-1.5 million pounds
of bellies.
Technical Outlook
HOGS (DEC) 9/24/2003: The market setup is
somewhat negative with the close under the 1st swing support. Resistance levels
comes in at 58.10 and 58.65 today, while support is around 57.00 and then 56.45.
Short-term indicators on the defensive. Consider selling an intraday bounce. The
close below the 9-day moving average is a negative 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 56.45.
COCOA MARKET RECAP
9/23/2003
With reports that some rebels had pulled out of
the Ivory Coast government the cocoa market responded aggressively. Usually a
gap up rally with a big range has some follow through but the market will have
to confirm that a breakdown of order is going to take place because of the rebel
resignations. We doubt that opposition forces are simply going to give up power
without some attempt to change the national government. In fact, unless there is
actual violence the initial response to the developments might be limited. On
the other hand, most if not the entire main crop is still inside the country and
return to anarchy would be a major event.
Technical Outlook
COCOA (DEC)09/24/03 The gap upmove on the day
session chart is a bullish indicator for trend. 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 1638 and above there at 1667 with support at 1568
and 1527. The daily stochastics have crossed over up which is a bullish
indication. The next upside target is 1666.50.
COFFEE MARKET RECAP
9/23/2003
Speculative profit taking pressured Dec coffee
lower, but despite today’s weakness the market may have put in a near-term
bottom at 62 if weather conditions in Brazil stay dry. Only light rain is
expected late this week with the next 10 day forecast calling for normal rains
in the lower half of the center-south growing region. Roaster buying supported
the market early while producer selling was absent. With the combined
speculative position in coffee net long over 15,300 as of Sept 16th, the funds
may not want to add aggressively to longs until the weather situation plays out.
Technical Outlook
COFFEE (DEC)9/24/03 The downside closing price
reversal on the daily chart is somewhat negative. The market tilt is slightly
negative with the close under the pivot. Momentum studies are declining, but
have fallen to oversold levels. The next downside objective is now at 62.75.The
Coffee contract should run into resistance at 65.10 and above there at 66.35
with support at 63.3 and 62.75. The downside crossover (9 below 18) of the
moving averages suggests a developing short-term downtrend.
SUGAR MARKET RECAP
9/23/2003
March sugar closed lower and the turn lower from
a significant resistance point of 636 for March sugar was a negative technical
development. London was weak and commercial selling was noted. Without a quick
move to new highs for the week, we would have to assume a near-term top is in
place. Unless increase trade house and commercial buying supports a move over
this high, the market appears poised for a resumption of the downtrend. Taiwan
bought 70,000 tons of raw sugar which helped perk up the cash market and with
plenty of pent-up demand from routine buyers, a surge in activity over the
near-term could easily give the appearance of a jump in demand as the pipeline
moves from mostly empty to a more normal inventory level for this time of the
year.
Technical Outlook
SUGAR (MAR) 9/24/2003: 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. Swing resistance comes in at
6.42, with support found at 6.16. The close above the 9-day moving average is a
positive short-term indicator for trend. Momentum studies are rising from
mid-range which could accelerate a move higher if resistance levels are
penetrated. The near-term upside target is at 6.42.
COTTON MARKET RECAP
9/23/2003
December cotton closed sharply higher finding
support from too much rain in Georgia and Alabama and from active buying from
Memphis merchants. Solid export sales news this week and indications of buying
from China were seen as supportive. After hefty rains already this week in the
southeast, the 6-10 day forecast, released after the close, calls for normal to
above normal precipitation which could hurt the quality of the crop if rains are
too heavy. However, the Delta calls for below normal precipitation which is a
partial offset. Merchant buying of call options was seen as the primary
supportive factor for the higher trade.
Technical Outlook
COTTON (DEC) 9/24/2003: A positive signal for
trend short-term was given on a close over the 9-bar moving average. The market
setup is supportive for early gains with the close over the 1st swing
resistance. Next resistance area comes in at 66.86 and then again at 67.18,
while support is targeted at 65.86 and 65.18. Stochastics turning bearish at
overbought levels will tend to support lower prices if support levels are
broken. The next downside objective is 65.18. The market is approaching
overbought levels with an RSI over 70.