Another Limit Down Day For February Cattle…

Technical Outlook

BONDS (MAR) 12/30/03: The close below the second swing support number puts the market on the defensive. Near-term resistance for bonds is at 110.13 and then again at 111.08, while swing support hits at 109.06 and below there at 108.26. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. 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 108.26.

T-NOTES(MAR) The daily stochastic’s gave a bearish indicator with a crossover down. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The next downside objective is now at 111.25. The market’s close below the 1st swing support number suggests a moderately negative setup for today. 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 112.20 and then again at 113.04, while swing support hits at 111.30 and below there at 111.25. The market’s short-term trend is negative as the close remains below the 9-day moving average.

STOCK INDICES RECAP

12/29/2003

Another record-breaking session in stocks clearly shows the bulls in control of near-term sentiment. We suspect that favorable help-wanted readings from the
Conference Board added to the positive sentiment but it is also possible that post-holiday retail-sales activity provided some positive sentiment. Some
press outlets suggested that fund managers were providing most of the buying, as they feared missing out on gains into the end of the year. Under the current setup, it would seem that the bull track will continue to dominate into the New Year’s deadline.

Technical Outlook

S&P500 (MAR) 12/30/03: The market’s close above the
second swing resistance number is a bullish indication. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session. Underlying support comes in at 1101.95 and 1093.53, with overhead resistance at 1114.05 and 1117.73. 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 1117.73. With a reading over 70, the 9-day RSI is approaching overbought levels.

S&P E-Mini (MAR): The market made a new contract high on the rally. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 1120.69. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Near-term resistance for the S&P Mini is at 1115.88 and then again at 1120.69, while swing support hits at 1099.63 and below there at 1088.19. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market is approaching overbought levels with an RSI over 70.

NASDAQ (MAR) A new contract high was made on the rally. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Since the close was above the 2nd swing resistance number, the market’s posture is bullish and could see more upside follow-through early in the session. The market should run into resistance at 1480.25 and above there at 1486.38 with support at 1459.75 and 1445.38. The 9-day RSI over 70 indicates the market is approaching overbought levels. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 1486.4.

CURRENCY MARKET RECAP

12/29/2003

The Dollar Index crawled into new low ground for the move as some sellers were discouraged by the persistent pattern of new highs in the US equity market and by favorable US economic information. With an article in the
Financial Times suggesting that the ECB is growing restless with the sharp rise in the
euro, it is also possible that traders begin to fear intervention dialogue against the
euro. The Canadian dollar looks to be under the negative influence of the mad cow situation and therefore is the only currency not managing big gains off the
dollar slide.

Technical Outlook

YEN (MAR): The market’s close above the 9-day moving average suggests the short-term trend remains positive. A positive setup occurred with the close over the 1st swing resistance. Swing resistance is targeted at 93.77 and above there at 93.82, with the yen finding support around 93.67 and below there at 93.62. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 93.82. Short-term indicators suggest buying dips today.

EURO (MAR): Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 1.2495. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.2435, with overhead resistance at 1.2495. The market’s short-term trend is positive on a close above the 9-day moving average. With a reading over 70, the 9-day RSI is approaching overbought levels. The market’s key reversal down is a bearish signal. The rally brought the market to a new contract high. The gap down on the day session chart is bearish with more selling pressure possible today.

PRECIOUS METALS RECAP

12/29/2003

Gold prices started out firm but then corrected back into mid session before finishing strong. Silver prices showed almost no interday weakness, which suggests that the silver is getting a combination of physical demand and investment demand. Many in the market fear an overly long position reading in the COT but that probably won’t deter the bull market. In fact, when one adjusts the silver fund and small spec long for the action since the last COT report mark off, the net spec long is probably off the charts! It is clear that copper, platinum and silver are all seeing the benefits off the soaring US equity market action, as that serves to boost physical demand expectations.

Technical Outlook

SILVER (MAR): Since the close was above the 2nd swing resistance number, the market’s posture is bullish and could see more upside follow-through early in the session. Initial support for silver is at 589.8 and below there at 585.1 with resistance likely at 592.3 and 596.3. 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 592.3. The 9-day RSI over 70 indicates the market is approaching overbought levels. A new contract high was made on the rally. The gap upmove on the day session chart is a bullish indicator for trend.

GOLD (FEB): Support for gold today comes in near 411.53, while resistance is pegged at 418.53. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 418.53. The market’s close above the 2nd swing resistance number is a bullish indication. The market’s short-term trend is positive on a close above the 9-day moving average. With a reading over 70, the 9-day RSI is approaching overbought levels. The rally brought the market to a new contract high.

COPPER MARKET RECAP

12/29/2003

The copper market caught a lift off the Chinese overnight buying but was ignited for even more gains by the favorable US economic number released during the session and probably because of the significant strength in the US equity market. The Chinese apparently not being deterred by the lofty flat price levels of copper but many foreign buyers are seeing currency gains reduce the total end cost of fresh purchases. The copper market probably doesn’t have significant chart resistance until 106.50.

ENERGY MARKET RECAP

12/29/2003

The energy complex weakened because of the ongoing mild temps and because of the statements from the Indonesian Oil Minister that the market would still see a second quarter 2004 surplus. In short warm and wet or mild and wet is not a supportive condition especially when the fund long in crude oil is massive. It also possible that some market players were liquidating positions because they feared increased Libyan production in the future. The fact that December temps showed 1 week of extreme cold and 3 weeks of mild or above normal temps means that the winter has not kicked off the winter season in an abnormally cold pattern!

Technical Outlook

CRUDE OIL (FEB): The market’s close below the pivot swing number is a mildly negative setup. Support for crude is keyed on 32.18 and below there at 31.91, with resistance pegged at 32.63 and 32.81. 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 31.91.

UNLEADED GAS (FEB): Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 89.62. It is a slightly negative indicator that the close was lower than the pivot swing number. Resistance today is at 93.42, while support should be found around 89.62. The market’s close above the 9-day moving average suggests the short-term trend remains positive.

HEATING OIL (FEB):The market’s close below the pivot swing number is a mildly negative setup. Heating oil should encounter support around 89.36, with resistance is at 92.16. 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 89.36.

CORN MARKET RECAP

12/29/2003

March corn prices continued to firm and closed the gap left last week in reaction to the mad cow disease news. Reports by fast food chains that hamburger sales remain unfazed by the mad cow news and strong export sales of corn encouraged commercial buying in futures. Export sales came in at 945,600 tons which was above the estimated range of 600,000 to 900,000 tons. Corn shipments reached a marketing year high at 1.425 million tons. Inspections were on the low side at 36.657 million bushels, but seemed to have little negative impact on the market.

Technical Outlook

CORN (MAR) 12/30/03: The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 246 3/4. The market’s close above the 2nd swing resistance number is a bullish indication. Market resistance comes in at 246 3/4 today, with support at 237 3/4. The market’s short-term trend is negative as the close remains below the 9-day moving average.

SOY COMPLEX RECAP

12/29/2003

After making a new high for the move, March soybeans ran into profit taking with the market closing 9 cents lower. While grain inspections of 17.248 million bushels were lower than trade estimates, the market got an early boost off of a much stronger export sales report. Total sales for soybeans were 2.226 million tons compared to trade estimates ranging between 1.3 and 1.55 million tons. While Monday’s price action looks toppish based on the technical pattern, the market has seen explosive price action over the last 3 sessions and is over due for some profit taking. If the US forbids the use of meat & bone meal to feed hogs & poultry, soymeal will likely be the feed alternative.

Technical Outlook

SOYBEANS (MAR) 12/30/03: A new contract high was made on the rally. The downside closing price reversal on the daily chart is somewhat negative. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next area of resistance is around 798 1/2 and 807 , while 1st support hits today at 785 1/4 and below there at 780 1/2. 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 807 .

MEAL (MAR): Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 252.2. First resistance comes in at 248.9, with support at 242.9. The market’s short-term trend is positive on a close above the 9-day moving average. 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. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 27.25. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The downside closing price reversal on the daily chart is somewhat negative. Daily swing resistance is found at 27.82 and above there at 28.01. Support should be encountered at 27.44 and 27.25.

WHEAT MARKET RECAP

12/29/2003

March wheat ended slightly lower Monday after futures failed to make a solid push through 370. Higher than expected export sales gave early support to futures with wheat sales totaling 760,200 tons which was above trader’s range of 500,000 to 700,000 tons. A weak dollar is continuing to attract foreign buyers to US wheat. Export inspections were on trader’s target at 23.792 million bushels. Concerns of dry weather in some winter wheat growing areas, mainly in the western part of the Great Plains, has also been supportive to futures prices. The wheat market has been influenced by soybeans lately and the lower action in beans looks to have weighed on wheat.

Technical Outlook

WHEAT (MAR) 12/30/03: The downside closing price reversal on the daily chart is somewhat negative. It is a slightly negative indicator that the close was lower than the pivot swing number. Look for near-term support at 360 and below there at 357 3/4, with resistance levels at 367 1/2 and 372 3/4. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 357 3/4. The 9-day RSI under 30 indicates the market is approaching oversold levels.

LIVE CATTLE RECAP

12/29/2003

For the third consecutive trading session, Feb cattle broke the limit as the market continues to price in the impact of the US mad cow case on the beef market. News that the infected cow had likely come from Canada and making an outbreak of the disease more localized and contained to the
West Coast did little to soothe traders’ fears. US meat continues to be banned by other countries, which will hit the US beef industry hard. Around 3,000 limit orders were polled in the Feb contract, which suggest another limit down day on Tuesday. Although fast-food restaurant chains said hamburger sales have not changed much since the mad cow disease was announced provides some encouragement for the US beef industry. However, until the US government can assure the US public
and foreign buyers that the US beef supply is safe, any bounce in cattle futures will be limited.

Technical Outlook

CATTLE (FEB) 12/30/03: Momentum studies are declining, but have fallen to oversold levels. The next downside target is 81.17. The close below the 2nd swing support number puts the market on the defensive. Support should be encountered at 81.17 and below there at 81.17. Market resistance is at 81.17 and then again at 81.17. The gap lower price action on the day session chart is a bearish indicator for trend. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The 9-day RSI under 30 indicates the market is approaching oversold levels.

LEAN HOGS RECAP

12/29/2003

Lean hog futures closed mixed, with the nearby February contract closing 0.72 higher at 53.92 and the deferred contracts closing weaker. The move higher appeared to be follow-through action from last Friday’s limit up move, which had been based on ideas that pork demand would benefit from the mad cow scare. However, concerns over tomorrow’s USDA Hogs and Pigs report, which is to be released after the close, mitigated some of that bullishness, particularly for the deferred contracts. The February contact rallied to its highest level since December 9th and managed a move through the major trendline resistance drawn off the October and November highs before settling back below the line.

Technical Outlook

HOGS (FEB) 12/30/03: It is a mildly bullish indicator that the market closed over the pivot swing number. Resistance levels comes in at 54.52 and 55.05 today, while support is around 53.32 and then 52.67. The market’s short-term trend is positive on a close above the 9-day moving average. Momentum studies are trending higher from mid-range which should support a move higher if resistance levels are penetrated. The near-term upside objective is at 55.05.

COCOA MARKET RECAP

12/29/2003

The cocoa market finished lower despite news that could have been supportive. An official from the Ivory Coast marketing board suggested that the main crop harvest could be down by as much as 20% but the trade apparently discounted that forecast. In fact, many traders realize that arrivals are lagging behind from rebel-controlled areas, but so far we have not seen many forecasts that call for the actual crop to be down. If there are more stories predicting a short crop then the market might find true support on the charts.

Technical Outlook

COCOA (MAR)12/30/03 The downside closing price reversal on the daily chart is somewhat negative. The market tilt is slightly negative with the close under the pivot. Cocoa should run into resistance at 1566 and above there at 1584 with support at 1531 and 1514. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 1513.75.

COFFEE MARKET RECAP

12/29/2003

March coffee traded higher Monday after the long holiday weekend, however, the market remains caught in a range between 65 and 62 cents. A lack of fresh news and a lack of leadership from the London market made for a dull trade. Brazil exports for December through the 22nd are running slightly behind year ago, and may have helped futures prices bounce. The market is in a classic bearish setup with the funds net short & small traders net long. If today’s COT report shows funds continue to add to shorts, the market will be vulnerable to further weakness.

Technical Outlook

COFFEE (MAR)12/30/03#VALUE!The market setup is supportive for early gains with the close over the 1st swing resistance. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside objective is now at 62.40.The Coffee contract should run into resistance at 64.55 and above there at 64.90 with support at 63.3 and 62.40. The market’s short-term trend is positive on a close above the 9-day moving average.

SUGAR MARKET RECAP

12/29/2003

March sugar was pressured Monday by fund selling and there is concern that if 5.80 fails to hold, the next target becomes 5.50. Lower prices were expected to bring in physical demand from Indonesia & China, but with abundant supplies expected, buyers are waiting for cheaper prices especially since transportation cost have increased due to the heightened terrorist alert. A weaker CRB Index added to the negative market tone.

Technical Outlook

SUGAR (MAR) 12/30/03: #VALUE!The market is in a bearish position with the close below the 2nd swing support number. Swing resistance comes in at 5.94, with support found at 5.72. 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 5.72. With a reading under 30, the 9-day RSI is approaching oversold levels.

COTTON MARKET RECAP

12/29/2003

March cotton gapped higher on strong export sales data and expectations that world demand will remain robust. Weekly export sales came in at 213,700 bales versus 207,500 the previous week. China was once again a strong buyer, purchasing 127,500 bales and taking shipment of 83,800 bales. There was some concern that the heightened terrorist alert would begin to effect demand, but that has not proved to be the case. Pent-up demand following the 4-day holiday market closing could send March cotton prices higher in Tuesday’s session.

Technical Outlook

COTTON (MAR) 12/30/03: The market’s close above the 9-day moving average suggests the short-term trend remains positive. Since the close was above the 2nd swing resistance number, the market’s posture is bullish and could see more upside follow-through early in the session. Next resistance area comes in at 74.97 and then again at 75.50, while support is targeted at 72.98 and 71.52. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 75.50. #VALUE! ORANGE JUICE (MAR)12/30/03#VALUE!Could see some early pressure today given the market’s negative setup with the close below the 2nd swing support. Orange Juice should run into resistance at 66.65 and above there at 68.10 with support at 64.50 and 63.80. The 9-day RSI under 20 suggests the market is extremely oversold. The market’s short-term trend is negative as the close remains below the 9-day moving average. Momentum studies are declining, but have fallen to oversold levels. The next downside objective is now at 63.8.