Futures Indicate Stronger Open


CHANGE to 4:15 AM: BONDS -17 — We suspect
that the bonds will continue to hover near the top end of the last two weeks
trading range, as the war threat continues to countervail better than expected
US economic readings. Surprisingly, the payroll and unemployment numbers were
discounted, as the trade either didn’t believe the readings, or think that the
economy is going to sag under the ongoing geopolitical weight of the Iraqi
situation. It would appear as if the US is losing the public relations battle
with the UN and most the world and therefore the US will either have to charge
ahead against massive resistance, or put the attack plans on hold, for at least
another two or three weeks.



4:15 AM
+190, DOW +29, NIKKEI
+36, FTSE -6 — We suspect that stock prices
might forge an unhealthy rally, as the threat of imminent war is declining. In
other words, it would appear that





are laying down enough political opposition that the


will have to at least delay an attack into the future. Therefore, aggressive
shorts might decide to take profits and that could result in a temporary bounce.


If it were not for the much stronger than expected US payroll
reading last Friday and the ultra soft German readings of the last two sessions,
the Dollar would be back down around the lows set last week. We still think that
the Dollar will revisit new lows but with the war track delayed by






would seem to be reigned in temporarily. If the


is kept from war by politics and by renewed Iraqi cooperation that could take
the pressure off the Dollar temporarily.

We still think that the Dollar will come under a massive selling binge in the
event of an attack, but now we see no way for the US to attack until the middle
of March. Unless Euro zone numbers simply fall off the table and the


numbers continue to improve, we doubt that the Dollar will be able to rise above
near term resistance of 100.47. We wished the market would have allowed a Dollar
sale last Friday up at 100.70, as we suggested, but the downtrend was simply too
strong for that kind of bounce.

EURO: This morning the Germans posted the
weakest Industrial output since 1999 and that creates an undertow for the Euro
following the


payroll readings Friday. With Chief weapons inspectors suggesting that


is showing signs of new cooperative efforts that could take some of the flight
to quality buying interest away from the Euro temporarily. The up trend is
probably not over it is simply paused until the political front heats up again.
Near term corrective targeting is only 107.49. 

YEN: A quasi gap down in the Yen overnight,
accompanies comments that the only hope for the Japanese stock market is to see
a lower Yen. Therefore, we suspect that pressure will mount on the Yen, with a
downside target this week of 83.82. However, the Yen will probably not see
aggressive selling unless the BOJ is found to be selling into the weakness.

SWISS: As the war threat ebbs, the Swiss
might see some longs exit, waiting for lower prices to re-enter longs. Trend
line support comes in today at 73.33 but a break to 73.00 would not be ruled
out, if the US acknowledges they are cooling their military jets for yet another
"chance" for Iraq.

POUND: The Pound is suffering an identity
crisis as it appears to be aligned with the


in the Iraqi situation, but at the same time manages to distance itself from the
negatives being heaped on the Dollar. This morning


inflation readings might have been a little hotter than many would like to have
seen and that could limit the BOE from more cuts in the future. However, since
the BOE recently made a move, it’s unlikely that the inflation readings will
have any impact. We suspect that near term support of 162.26 will hold up the

CANADIAN: We have to think that some bulls
are disappointed with the Canadian payrolls last week. We also have to think
that the delay in the decision on the war, is another
negative for the Canadian. Near term corrective targeting in the Canadian could
be 65.26 and possibly even 65.02.



4:15 AM

+1.90, SLV +1.5,


Gold Fix
$371.75, +$1.20; LME Copper
Warehouse sts
844,375 ton, +475
Gold stocks
2.146 ml, -104 oz;
COMEX Silver stks
107.5 ml oz, +1,099,401
oz; OVERNIGHT: Very light buying in

signals a tempering of recent selling.

GOLD: The market seems to have found some
support around $370. However, with the COT report registering a 140,000 contract
long last Tuesday, the market is significantly overbought. Furthermore it would
seem as if the


is fighting an uphill battle in getting the UN to agree to an attack of


SILVER: The net spec long in silver was
78,000 long last Tuesday, but silver has corrected since that report was
measured and that could mean a slightly less overbought condition. However,
silver remains historically long and vulnerable. In fact, we would fear that
silver is even more vulnerable to deflationary type selling than is gold.

PLATINUM: We suspect that platinum is also
in for a correction, with the gold apparently stalling and the macro economic
condition glaringly bearish. We feel that a delay in the war timing could catch
platinum extensively overbought at a price of $670 and a net spec long of some
5,500 contracts. There is an old gap that could be filled down at $660 this week
in the April contract.  

COPPER: Apparently the Chinese came back as
buyers following their long holiday last week and that has served to lift
international copper prices this morning. However, despite a much better than


payroll report, we get the sense that deflation and recession are on the minds
of traders and investors. With the elevated terrorist threat, confusing
diplomatic developments and a weak


equity market, we suspect that copper will continue to slide toward near term
support of 76.00.


CHG to

4:15 AM
+163, UNGA -10 — The weekly
COT report showed the crude Oil to be net spec long only 93,000 contracts. In
other words, the week over week COT report showed a contraction of 6,000 spec
long contracts.


natural gas market continues to get a lift from the regular energy complex and
from the weekend cold. However, if there is a slight war pause, warmer than
normal temps toward the end of this week might prompt a little profit taking.