What’s Behind This Roller-Coaster Action

October 2, 2002
Paul Letourneau

The Dec. S&P 500 futures
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below the 840 level, which is now the overhead resistance level. SPZ2 closed at
830 down 24.10 or 2.82%. Support is at 820 and secondary support is at 810.

The Nasdaq 100 for Dec.
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850, but the losses took their toll on the Nasdaq 100 futures. NDZ2 closed at
857 down 29.50 or 3.33%.

In the grains and bean market, which are traded
at the Chicago Board of Trade (CBOT), fund selling remains a serious potential
problem for the soybean market after today’s technical breakdown. The
fundamentals look bullish but the technical action continues to weaken as the
Nov. soybean contract
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could be more weakness if there is more long liquidation selling late Friday and
into next week, unless sales are strong or the weather turns wetter for next
week. November soybeans could find good support near 527 with 554 3/4 as good
resistance. Nov. soybeans closed at $5.37 1/2 a bushel down 4 1/2.

Tight producer holding, coupled with a much stronger-than-normal basis for
harvest, has helped to support the corn market near the psychological support
level of 2.50 for Dec. corn
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PowerRating). The export sales number this
week might improve from recent levels due to the sharp break in futures — which could
add to support near the 2.50 level. Support for December corn is at the key
50% retracement level of 2.55. Initial resistance is at 2.58 with 2.64 as the
secondary resistance. Corn for Dec delivery closed at $2.57 a bushel, up 1 1/4
cent.

Dec. wheat
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the southern plains (1/3 to 1 1/2 inches, 65% coverage) are factors which
could trigger choppy to lower trade ahead. Support for the Dec. wheat contract
is at the 38% retracement of 3.79 1/4. Initial resistance is at 4.22 with
secondary support at 4.10. Dec. wheat lost .13 cents to close at $3.83 1/2 a
bushel.

In the precious metals, Dec. gold
(
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was influenced by more talk of war with Iraq. President Bush said Wednesday the
use of force against Iraq “may become unavoidable” if Saddam Hussein refuses to
disarm. Gold gained .70 cents to $322.80 a troy ounce and silver dropped .30 to
$4.485 an ounce.

The
copper market saw short-covering interest which helped build the rally
yesterday. The short covering by the funds was in response to the equity market
recovery. Today Dec. copper
(
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PowerRating) rose up again to close at 67.59 a
pound up .55.

What’s Behind This Roller-Coaster Action

BUY THE FEAR, SELL THE GREED

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