An Indication That The Short-Term Trend Remains Negative

Technical Outlook

BONDS (DEC) 11/18/03: With the close higher than the pivot swing number, the market is in a slightly bullish posture. Near-term resistance for bonds is at 111.01 and then again at 111.20, while swing support hits at 110.02 and below there at 109.22. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 111.20.

T-NOTES(DEC) Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 114.06. 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 113.28 and then again at 114.06, while swing support hits at 113.07 and below there at 112.29. The market’s short-term trend is positive on a close above the 9-day moving average.

STOCK INDICES RECAP

11/17/2003

Dec S&P saw follow through selling from Friday’s weak close as escalating political violence and uncertainty regarding the strength of the economic recovery pressured stocks. Concerns over terrorism outweighed better than expected reports on business inventories and a record high in the Empire State Index released by the Fed. The latest terrorist attack on 2 synagogues in
Turkey and reports by a London based Arabic newspaper warning that al Qaeda plans car bombings in several countries including the US has made the market extremely skittish. The rebound in the dollar failed to provide stocks with any measurable support.

Technical Outlook

S&P500 (DEC) 11/18/03: The market’s close below the pivot swing number is a mildly negative setup. The gap down on the day session chart is bearish with more selling pressure possible today. Underlying support comes in at 1037.90 and 1030.60, with overhead resistance at 1048.90 and 1052.60. The market’s short-term trend is negative as the close remains below the 9-day moving average. Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 1030.60.

S&P E-Mini (DEC): The key reversal down puts the market on the defensive. The market made a new contract high on the rally. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 1028.56. The market tilt is slightly negative with the close under the pivot. Near-term resistance for the S&P Mini is at 1050.38 and then again at 1056.06, while swing support hits at 1036.63 and below there at 1028.56. A negative signal for trend short-term was given on a close under the 9-bar moving average.

NASDAQ (DEC) The market’s close below the 9-day moving average is an indication the short-term trend remains negative. It is a slightly negative indicator that the close was lower than the pivot swing number. The market should run into resistance at 1408.25 and above there at 1419.38 with support at 1381.75 and 1366.38. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 1366.4. The close under the 40-day moving average indicates the longer-term trend could be turning down.

CURRENCY MARKET RECAP

11/17/2003

The Dollar Index attempted to rally off terrorist threats against US allies, but the Dec contract remained stuck between a 92 and 91 price range. The Dollar made most headway against the Yen where a Arabic newspaper in London claimed al Qaeda is planning car bombings in several countries including Japan. The Yen fell hard on a sharp drop in the Nikkei stock index. The Dollar Index is extremely over sold and if US allies become targets of terrorism (like the bombing of 2 synagogues in Turkey), then the Dollar may garner some upward momentum.

Technical Outlook

YEN (DEC): The moving average crossover up (9 above 18) indicates a possible developing short-term uptrend. The gap lower price action on the day session chart is a bearish indicator for trend. The close below the 2nd swing support number puts the market on the defensive. Swing resistance is targeted at 92.14 and above there at 92.43, with the yen finding support around 91.60 and below there at 91.35. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 92.43.

EURO (DEC): Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 1.1853. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.1667, with overhead resistance at 1.1853. The market’s short-term trend is positive on a close above the 9-day moving average. The gap down on the day session chart is bearish with more selling pressure possible today.

PRECIOUS METALS RECAP

11/17/2003

Gold was hit by heavy profit taking as the nearby contract once again failed to break above the key psychological $400 level. Friday’s COT with options report showed that the fund and small trader continued to add to their net long position, which is now nearing record levels. With Dec gold unable to move through $400 despite a terrorist bombing of 2 synagogues in Turkey, weak longs likely became frustrated and started to take profits. A rebound in the Dollar also added to the pressure on gold. The key reversal in Feb gold with the market making a new contract high and close under the previous day’s low is technically bearish and suggest a near-term top may be in place. The double top in March silver also is an indication a technical top is in place.

Technical Outlook

SILVER (MAR): The close below the 2nd swing support number puts the market on the defensive. Initial support for silver is at 510.7 and below there at 499.9 with resistance likely at 530.7 and 538.7. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 530.7.

GOLD (FEB): Support for gold today comes in near 380.78, while resistance is pegged at 404.98. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 404.98. The market is in a bearish position with the close below the 2nd swing support number. The market’s short-term trend is positive on a close above the 9-day moving average.

COPPER MARKET RECAP

11/17/2003

March copper fell sharply as traders decided to book profits ahead of first notice day in the Dec contract on Nov 26th. Copper prices have had a tremendous run this year and renewed terrorism threats, a sharp break in world equity markets and less aggressive Chinese physical buying lately has prompted traders to move to the sidelines. Some evidence of producer selling was also noted. A 38.2 retracement of the last leg up from the Sept 30th low is back around 9101.

ENERGY MARKET RECAP

11/17/2003

After another failed attempt to push through $32 in the Jan crude oil contract on Friday, heavy profit taking by the funds this session drove prices sharply lower. News that Saudi Arabia had schedules 8.3 million barrel shipment of crude oil o the US for a late November delivery, weighed on the products market and called in to question OPEC member’s pledge to cut nearly 1 million barrels per day from production starting Nov 1st. Jan unleaded had an inside day at the top which is a negative technical signal. Support for Jan crude oil comes in at 31 then 30.75.

Technical Outlook

CRUDE OIL (JAN): The market’s close below the 1st swing support number suggests a moderately negative setup for today. Support for crude is keyed on 31.03 and below there at 30.82, with resistance pegged at 31.52 and 31.80. The market’s short-term trend is positive on a close above the 9-day moving average. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 31.80.

UNLEADED GAS (JAN): Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 88.75. The swing indicator gave a moderately negative reading with the close below the 1st support number. Resistance today is at 88.75, while support should be found around 85.35. The market’s close above the 9-day moving average suggests the short-term trend remains positive.

HEATING OIL (JAN): The market is in a bearish position with the close below the 2nd swing support number. Heating oil should encounter support around 85.35, with resistance is at 88.35. The market’s short-term trend is positive on a close above the 9-day moving average. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 88.35.

CORN MARKET RECAP

11/17/2003

March corn opened 1 cent higher but closed 2 cents lower on the session with active long liquidation selling noted in the pit. Talk of the hefty net long position from the fund trader in the COT report in conjunction with the record large US harvest helped pressure. News from the USDA that 116,000 tonnes of US corn was sold to unknown destination failed to provide much lasting support. Weekly export inspections came in at 37.8 million bushels as compared with trade expectations at 35-40 million. This brought cumulative exports for the season to 355.6 million bushels as compared with 284.6 million last year at this time. Funds were noted sellers of near 4000 contracts by mid-session. Cash basis lebvels were steady/firm as producers remain tight holders of the record crop.

Technical Outlook

CORN (MAR) 11/18/03: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 240 . The market’s close below the 1st swing support number suggests a moderately negative setup for today. Market resistance comes in at 249 1/2 today, with support at 240 . The upside crossover (9 above 18) of the moving averages suggests a developing short-term uptrend.

SOY COMPLEX RECAP

11/17/2003

January soybeans closed 1 1/2 higher on the session but still 5 cents below the opening in choppy, two-sided trade. Export news was mixed with the USDA reporting just before the opening a sale of 563,000 tonnes of US soybeans to China. However, weakness in the other grains, talk of imports of meal into North Carolina and slow export inspections helped pressure. Weekly export inspections came in at only 36.3 million bushels as compared with trade expectations at 45-52 million. This brought cumulative exports for the season to 277.3 million bushels as compared with 265.3 million last year at this time. The Wilmington North Carolina livestock consortium was rumored to have bought 75,000-90,000 tonnes of Brazil meal. Good rains in Brazil and ideas that the market is overbought basis the weekend COT report kept a lid on the rallies. Oil managed new contract highs.

Technical Outlook

SOYBEANS (JAN) 11/18/03: With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next area of resistance is around 785 1/2 and 791 , while 1st support hits today at 774 and below there at 768 . The market’s close above the 9-day moving average suggests the short-term trend remains positive. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 791 .

MEAL (MAR): Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 233.5. First resistance comes in at 238.9, with support at 234.9. The downside crossover (9 below 18) of the moving averages suggests a developing short-term downtrend. The market’s close below the pivot swing number is a mildly negative setup.

BEAN OIL (MAR): The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 27.73. A positive setup occurred with the close over the 1st swing resistance. A new contract high was made on the rally. Daily swing resistance is found at 27.51 and above there at 27.73. Support should be encountered at 26.80 and 26.31. The 9-day RSI over 70 indicates the market is approaching overbought levels.

WHEAT MARKET RECAP

11/17/2003

March wheat closed 3 1/2 lower on the session but managed to close above the opening and 4 cents up from the lows of the day. Talk of potential heavy deliveries against the December contract coming up soon and ideas that the market is overbought helped pressure. There is still no rain in the forecast for western Kansas and this region is likely to see further deterioration in crop conditions and soil moisture levels ahead. Weekly export inspections came in at 19.08 million bushels as compared with trade expectations at 16-22 million. This brought cumulative exports for the season to 522.4 million bushels as compared with 424 million last year at this time. News that Poland needs to import near 1.5 million tonnes over the near-term to help stabilize prices or news that Pakistan will be an importer this season for the first time in 4 years failed to provide much support.

Technical Outlook

WHEAT (MAR) 11/18/03: The swing indicator gave a moderately negative reading with the close below the 1st support number. Look for near-term support at 409 and below there at 405 1/2, with resistance levels at 415 1/2 and 418 1/2. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The daily stochastics have crossed over down which is a bearish indication. 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 next downside target is 405 1/2. The 9-day RSI over 70 indicates the market is approaching overbought levels.

LIVE CATTLE RECAP

11/17/2003

December cattle closed 47 lower on the session and is now down for 5 sessions in a row after last week’s reversal from a new contract and all-time high. The discount of futures to the cash lent some underlying support but with cash trading at $98.00 on Friday, the $7.00 break in just one week was seen as bearish. The is continued talk that higher beef prices have slowed demand enough to keep retail demand light ahead of the holiday and that packing plants are operating at such large losses that they will lower cash bids and reduce beef production further. Last week, beef production was down 10.8% from last years pace but December futures were down 272 points on the week. Boxed-beef cut-out values were up 26 cents at mid-session to $166.42.

Technical Outlook

CATTLE (FEB) 11/18/03: Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 87.90. It is a slightly negative indicator that the close was lower than the pivot swing number. Support should be encountered at 88.65 and below there at 87.90. Market resistance is at 90.10 and then again at 90.80. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

LEAN HOGS RECAP

11/17/2003

December hogs closed 7 lower on the session but managed to trade at and close above 50.00 for the 4th session in a row. Cash markets were steady, pork values were higher on Friday afternoon and there is a continued expectation that pork production should begin to subside. The 2-day lean index came in down 15 cents to 50.23. Slaughter came in at 394,000 head as compared with trade estimates at 385,000 to 395,000 head. The higher than expected slaughter suggests either a) packer demand is better than expected or b) there is just more hogs moving to market than traders had expected. Strength in the bellies provided some support.

Technical Outlook

HOGS (FEB) 11/18/03: The market’s close below the pivot swing number is a mildly negative setup. Resistance levels comes in at 56.70 and 57.12 today, while support is around 55.82 and then 55.37. The market’s short-term trend is negative as the close remains below the 9-day moving average. Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 55.37.

COCOA MARKET RECAP

11/17/2003

Profit taking and origin selling pressured March cocoa after nearly a $250 run since mid-October. However, the technical pullback could be short lived as news after the market closed reported that rebel forces have declared a state of emergency in the areas under their control. With harvest of the main crop going on and arrivals to ports running behind year ago, March cocoa could garner support from fears of escalating political tensions.

Technical Outlook

COCOA (MAR)11/18/03 The close below the 1st swing support could weigh on the market. Cocoa should run into resistance at 1572 and above there at 1599 with support at 1532 and 1519. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 1598.50.

COFFEE MARKET RECAP

11/17/2003

March coffee ended weaker as traders adjust positions ahead of the Dec contract’s first notice day tomorrow. There is some concern that if a fund, who had been accumulating warehouse receipts throughout the year, decides to liquidate their cash position, the coffee market could come under heavy pressure. It was reported that Brazilian coffee producers will exercise about 87% of their put options. The Green Coffee association reported US coffee warehouse stocks in October were 5.985 million bags, down 106,388 bags from September. March coffee appears to be making a base to develop a low, but the market may need to get through Dec expiration first.

Technical Outlook

COFFEE (MAR)11/18/03 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 61.05.The Coffee contract should run into resistance at 62.90 and above there at 63.65 with support at 61.6 and 61.05. The market’s short-term trend is negative as the close remains below the 9-day moving average.

SUGAR MARKET RECAP

11/17/2003

While the technical set-up still looks promising to the upside if funds continue to cover their hefty net short position, the cash fundamentals look weak and this could keep funds short for now unless there is some type of event which could spark another move through resistance. Trade house buying helped support the market off of the early lows but the market still closed 6 lower on the session and started the week with a gap lower opening which is the opposite of last week when the market managed at 31 point rally. Traders await the results of the Egypt tender for 40,000 tonnes of raw sugar over the weekend and Algeria bought 25,000 tonnes of raw sugar from Brazil. Brazil cash basis levels turned weak.

Technical Outlook

SUGAR (MAR) 11/18/03: The market’s close below the 1st swing support number suggests a moderately negative setup for today. Swing resistance comes in at 6.42, with support found at 6.20. The market’s short-term trend is positive on a close above the 9-day moving average. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 6.42.

COTTON MARKET RECAP

11/17/2003

March cotton closed lower as the market continued to chop around as there appears to be a lack of fresh news until this week’s export sales. The funds are still very net long and a disappointing sales report this week may trigger more profit taking. The market will be focused on the pace of Chinese buying. Near-term support for March is 77.50.

Technical Outlook

COTTON (MAR) 11/18/03: The market’s close below the 9-day moving average is an indication the short-term trend remains negative. It is a slightly negative indicator that the close was lower than the pivot swing number. Next resistance area comes in at 78.96 and then again at 79.63, while support is targeted at 77.96 and 77.63. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 77.63. The downside closing price reversal on the daily chart is somewhat negative.