Gaining Ground

  • February 4, 2002
  • Paul Letourneau

Treasury prices gained ground while the U.S.
dollar weakened today. More nerve-wracking
announcements from corporations the likes of Global Crossing
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and Tyco
International
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investors’ concerns about the trustworthiness of corporate accounting and
disclosure practices in the wake of the Enron scandal. Fears of a
disappointingly weak economic recovery, which pressured stocks on Friday, also
weighed on Wall Street in Monday’s session. On the New York Stock Exchange,
declining stocks outweighed advancers by a ratio of more than 2 to 1.

All of the broader index futures broke through their S2 Pivots:

The March S&P 500
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The March Nasdaq 100
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The March Dow Jones
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down 224.00.

This morning the March U.S. 30-Year Treasury Bonds
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out above their resistance level of 103.813. This came on the heels of closing
higher on Friday 02-01-02. The stochastics are positioned to turn bullish with
additional strength from the bonds. The overhead resistance is the December high
of 105/106 area. The March bond closed at 104.156, up .810. The March 10-year Treasury
closed higher at 106.891, up .640. The March U.S. dollar
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broke below its first support level of the day 9119.7 and then settled just
above its secondary support. The final close was 119.090, a loss of .89.

After a stable opening Monday, March soybean futures
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Chicago Board of Trade rallied off of its uptrending support line to close up
.58 to 141.860. Soybeans for March delivery have a resistance level of 151.00.
Traders are indicating that the move in beans is due to a dry weekend in
Brazil’s Rio Grande do Sol, where soil moisture is expected to become very dry
this week, accompanied by forecasts for little to no rain in the next few days.
The Rio Grande do Sol is where the majority of soybeans are grown by Brazil, the
#2 exporter of soybeans.

March soybean meal
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the lead of soybeans, bean meal rallied higher to 150.9, up 1.80. Stochastics
are crossing up out of the 20% oversold area. March wheat futures
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dropped to 280.75, down 6.250. This is a seven-week low. Wheat fell today
because of bland activity for U.S. exports and forecasts for crop-beneficial
rains in the southern Plains states.