Are Gold And Silver Headed Even Higher?

Technical Outlook

#BONDS (JUN) 3/19/2004: There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. Near-term resistance for bonds is at 115.19 and then again at
116.09, while swing support hits at 114.19 and below there at 114.09. A negative
signal for trend short-term was given on a close under the 9-bar moving average.
A bearish signal was triggered on a crossover down in the daily stochastics.
Stochastics turning bearish at overbought levels will tend to support lower
prices if support levels are broken. The next downside objective is 114.09.

T-NOTES(JUN) 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 115.05. The market is in a
bearish position with the close below the 2nd swing support 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 116.00 and then again at 116.15,
while swing support hits at 115.11 and below there at 115.05. The market’s
short-term trend is negative as the close remains below the 9-day moving
average.

 

STOCK INDICES RECAP

3/18/2004

The negatives came out of the wood work Thursday
as the PPI report showed a little inflation threat and the Philly Fed Survey
numbers showed some very weak readings. What some on Wall Street might fear is
that the US Fed wants to countervail inflation but that the US economy really
isn’t strong enough to weather higher interest rates. The market was also upset
over the Microsoft/EU news and concerned that the US is taking shots in the
global political realm. On Thursday the Polish government suggested that they
were misled on the Iraqi situation and that might deal the US Administration a
serious blow.

Technical Outlook

#S&P500 (JUN) 3/19/2004: The close over the pivot
swing is a somewhat positive setup. The upside daily closing price reversal
gives the market a bullish tilt. Underlying support comes in at 1116.25 and
1107.43, with overhead resistance at 1129.35 and 1133.63. The close above the
9-day moving average is a positive short-term indicator for trend. Stochastics
are rising from over sold levels which is bullish and should support higher
prices. The near-term upside objective is at 1133.63.

S&P E-Mini (JUN): Daily stochastics are showing
positive momentum from oversold levels which should reinforce a move higher if
near-term resistance is taken out. The next upside target is 1123.19. With the
close higher than the pivot swing number, the market is in a slightly bullish
posture. Near-term resistance for the S&P Mini is at 1123.13 and then again at
1123.19, while swing support hits at 1122.88 and below there at 1122.69. The
market’s close above the 9-day moving average suggests the short-term trend
remains positive.

NASDAQ (JUN) A positive signal for trend
short-term was given on a close over the 9-bar moving average. The market tilt
is slightly negative with the close under the pivot. The market should run into
resistance at 1434.75 and above there at 1441.38 with support at 1415.25 and
1402.38. Rising from over sold levels, daily momentum studies would support
higher prices especially on a close above resistance. The next upside objective
is 1441.38.

MINI DOW (MAR) The close above the 9-day moving
average is a positive short-term indicator for trend. The market should run into
resistance at 10357 and above there at 10397 with support at 10232 and 10147.
Stochastics are rising from over sold levels which is bullish and should support
higher prices. The near-term upside target is at 10397. The close over the pivot
swing is a somewhat positive setup.

 

CURRENCY MARKET RECAP

3/18/2004

The doors came off the Dollar Index Thursday as
the market is concerned that the US is seeing an inflationary potential but
doesn’t really have a strong enough economy to weather an early rate hike by the
Fed. We also think that international political arena is turning against the
Bush Administration with Poland now suggesting that they were misled in the
Iraqi war decision. In the near term the loss of face by the Bush Administration
is costing the Dollar. Maybe the world needs to see the US retrench from the
world scene so it can become clear what happens on the terrorism front when
there is no threat of reprisals.

Technical Outlook

#CURRENCIES 3/19/2004: YEN (JUN): A positive
signal for trend short-term was given on a close over the 9-bar moving average.
If yesterday’s gap higher on the day session chart holds, additional buying
could develop this session. The market has a bullish tilt coming into today’s
trade with the close above the 2nd swing resistance. Swing resistance is
targeted at 94.28 and above there at 94.62, with the yen finding support around
93.57 and below there at 93.20. Rising stochastics at overbought levels warrant
some caution for bulls. The next upside objective is 94.62. The market is
approaching overbought levels with an RSI over 70.

EURO (JUN): Momentum studies are rising from
mid-range which could accelerate a move higher if resistance levels are
penetrated. The near-term upside target is at 1.2512. The defensive setup, with
the close under the 2nd swing support, could cause some early weakness. Swing
support for the Euro comes in at 1.2142, with overhead resistance at 1.2512. The
close above the 9-day moving average is a positive short-term indicator for
trend. The close below the 40-day moving average is an indication the
longer-term trend is down. More selling pressure is likely given yesterday’s gap
lower price action on the day session chart.

 

PRECIOUS METALS RECAP

3/18/2004

The gold market made an impressive run and the
silver market went right along side the gold on the way up. Not only did gold
and silver take out critical chart levels but the hotter inflation reading from
the PPI gave the market a fresh element to support prices. As if gold didn’t
have enough reasons to rally the Dollar managed a significant breakdown and
might be headed to significantly lower levels. Some in the trade think that
inflation is returning and that the US economy is too weak to weather a rate
hike to ward off the affliction. In fact, gold and silver both look to be in the
midst of a near term adjustment to even higher trading range.

Technical Outlook

#P-METALS 3/19/2004: SILVER (MAY): The market has
a bullish tilt coming into today’s trade with the close above the 2nd swing
resistance. Initial support for silver is at 734.8 and below there at 717.9 with
resistance likely at 743.7 and 758.3. A positive signal for trend short-term was
given on a close over the 9-bar moving average. Rising stochastics at overbought
levels warrant some caution for bulls. The next upside objective is 743.7. The
market is approaching overbought levels with an RSI over 70. The market made a
new contract high on the rally.

GOLD (APR): Support for gold today comes in near
403.73, while resistance is pegged at 418.33. Daily stochastics have risen into
overbought territory which will tend to support reversal action if it occurs.
The near-term upside target is at 418.33. Short-term indicators suggest buying
pullbacks today. Market positioning is positive with the close over the 1st
swing resistance. The close above the 9-day moving average is a positive
short-term indicator for trend.

 

COPPER MARKET RECAP

3/18/2004

We think the copper market benefited from the
sharp rise in precious metals as the sharp decline in the US stock market could
have easily undermined copper. However, since the LME continues to post massive
daily copper stocks declines it is clear that even a slow world economy is
chewing through copper supplies. A news story that copper stocks could reach
“chronically low levels” from Dow Jones is just the type of news that fires up
the speculative buying interest.

 

ENERGY MARKET RECAP

3/18/2004

The energy complex was a little overbought coming
into the session Thursday and with economic concerns surfacing from the US it’s
understandable that prices corrected. It is also possible that moderating temps
in the US forecast took some of the heating oil bullishness out of the market.
Some traders suggested that OPEC is still considering the upcoming production
cut decision and many think that a massive slide in stock prices might actually
increase the chance that OPEC will reduce or stall the March 31st production
cut. The Nigerian Oil Minister suggested that OPEC will go ahead and cut but the
jury is still out. US natural gas stocks declined by a larger than expected 46
bcf but the year over year surplus actually increased from 422 bcf to 461 bcf.

Technical Outlook

#ENERGIES 3/19/2004: CRUDE OIL (MAY): It is a
slightly negative indicator that the close was under the swing pivot. Support
for crude is keyed on 37.02 and below there at 36.61, with resistance pegged at
37.77 and 38.11. The close above the 9-day moving average is a positive
short-term indicator for trend. Daily stochastics have risen into overbought
territory which will tend to support reversal action if it occurs. The near-term
upside target is at 38.11.

UNLEADED GAS (MAY): Rising stochastics at
overbought levels warrant some caution for bulls. The next upside objective is
115.91. The market has a slightly positive tilt with the close over the swing
pivot. Resistance today is at 115.91, while support should be found around
113.11. A positive signal for trend short-term was given on a close over the
9-bar moving average.

HEATING OIL (MAY): It is a slightly negative
indicator that the close was under the swing pivot. Heating oil should encounter
support around 91.03, with resistance is at 95.03. The close above the 9-day
moving average is a positive short-term indicator for trend. Daily stochastics
have risen into overbought territory which will tend to support reversal action
if it occurs. The near-term upside target is at 95.03.

 

CORN MARKET RECAP

3/18/2004

The market’s primary concern last week was that
higher prices may have slowed demand but surging export sales and indications
that bird flu is under control helped support. The market experienced solid
support early in the session due to new highs in soybeans and higher than
expected export sales. Weekly export sales came in at 1.315 million tons as
compared with expectations at 700,000-900,000 tons which is the highest weekly
sales tally since November 20th, 2003. All of the sales were for the 2003/2004
marketing year as compared with 651,300 tons necessary each week to reach the
USDA projection. Cumulative sales have reached 68.3% of the USDA forecast for
the season as compared with 66.1% on average for this time of the year. In
addition, the USDA announced daily sales of US corn of 100,584 tons to Japan and
220,000 tons to unknown destination. New contract highs and new 6 1/2 year highs
for nearby futures were achieved on the rally. December corn moved decisively
through psychological resistance at 300 as traders believe that new crop corn
needs to rally enough to keep up with soybeans and encourage or at least not
discourage producers from planting more corn this spring. The gap higher opening
for December corn is bullish technical action. The next retracement resistance
points off of the weekly charts come in at 319 1/2 and then 364 1/2 which would
be a 50% retracement of the break from the 1996 highs to the 2000 lows.

Technical Outlook

#CORN (MAY) 3/19/2004: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The near-term upside target is at 315 2/4. There could be more upside
follow through since the market closed above the 2nd swing resistance. Market
resistance comes in at 315 2/4 today, with support at 308. The close above the
9-day moving average is a positive short-term indicator for trend. The market is
becoming somewhat overbought now that the RSI is over 70. The market rallied to
a new contract high. Follow through buying looks likely if the market can hold
yesterday’s gap on the day session chart.

 

SOY COMPLEX RECAP

3/18/2004

Concerns with the size of the Brazil crops and
decent export sales news helped support active fund and speculative buying and a
move to new contract highs and to the highest level since June of 1988. In
addition, ideas that China is back into the market buying South American
soybeans helped support. Weekly export sales came in at 216,200 tons as compared
with expectations at 100,000-350,000 tons. Old crop sales were 47,400 tons as
compared with 46,800 tons necessary each week to reach the USDA projection.
Cumulative sales have reached 95.2% of the USDA forecast for the season as
compared with 85.6% on average for this time of the year. Meal gapped into new
contract highs as well after much higher than expected sales news. Meal sales
were 167,700 tons as compared with expectations at 0-50,000 and oil sales were
2100 tons vs. 0-5000 expected. Strength in palm oil overnight helped to support
oil. Shipping delays in Brazil ahead of the heart of harvest added to the
bullish tone on the floor as speculative buying remains active. Some Brazil
truckers were protesting the long lines at Paranagua. The move over $10
attracted increased producer selling and cash dealers expect weaker basis level
tonight while gulf basis weakened during the session.

Technical Outlook

#SOYBEANS (MAY) 03/19/04 The market made a new
contract high on the rally. The gap upmove on the day session chart is a bullish
indicator for trend. The market has a bullish tilt coming into today’s trade
with the close above the 2nd swing resistance. The next area of resistance is
around 1027 and 1032 2/4, while 1st support hits today at 1009 and below there
at 996 2/4. The market’s close on the 9-day moving average is neutral. Rising
stochastics at overbought levels warrant some caution for bulls. The next upside
objective is 1032 2/4. The market is approaching overbought levels with an RSI
over 70.

MEAL (MAY): Daily stochastics have risen into
overbought territory which will tend to support reversal action if it occurs.
The near-term upside target is at 321.0. The market rallied to a new contract
high. Follow through buying looks likely if the market can hold yesterday’s gap
on the day session chart. First resistance comes in at 317.8, with support at
310.0. The close above the 9-day moving average is a positive short-term
indicator for trend. There could be more upside follow through since the market
closed above the 2nd swing resistance. The market is becoming somewhat
overbought now that the RSI is over 70.

BEAN OIL (MAY): A positive signal for trend
short-term was given on a close over the 9-bar moving average. Stochastics are
at mid-range, but trending higher which should reinforce a move higher if
resistance levels are taken out. The next upside objective is 34.73. 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. Daily swing
resistance is found at 34.50 and above there at 34.73. Support should be
encountered at 33.82 and 33.37.

 

WHEAT MARKET RECAP

3/18/2004

Active fund buying supported solid gains and a
move to new contract highs for the new crop July futures. The surge higher was
led by strength in the other grain market and active export sales news of the
past several days. In addition, a lack of rain in the forecast for western
Kansas and uncertainty over the extent of the import campaign by China has added
to the bullish tone. Talk that China imports could be increased on any sign of
poor weather for China’s winter wheat crop was seen as supportive as China
already has booked near 5 million tons this year and stocks are tightening after
multiple years of production coming n well below consumption. The China
production deficit for the coming year is expected to be near 20-22 million
tons. July wheat closed 37 cents off of Friday’s lows. The surge higher in the
other grains to contract highs helped support the market in spite of concerns
that the market is short-term overbought after yesterday’s sharply higher trade.
Weekly export sales came in at 419,700 as compared with expectations at
400,000-500,000 tons. The best buyers were South Korea (92,100 tons) and Mexico
(87,200 tons). All of the sales were for the 2003/2004 marketing year as
compared with 255,800 bales necessary each week to reach the USDA projection.
Cumulative sales have reached 90.5% of the USDA forecast for the season as
compared with 83.5% on average for this time of the year. Jordon announced a
tender to buy 100,000 tons of wheat and there is talk that Algeria may also
tender soon for 200,000-300,000 tons. The NOAA 90-day forecast calls for drier
than normal conditions for the southern winter wheat areas and the 6-10 day
forecast from the National Weather Service calls for above normal temperatures
and below normal precipitation for the winter wheat belt which may help provide
some underlying support.

Technical Outlook

#WHEAT (MAY) 3/19/2004: The market has a slightly
positive tilt with the close over the swing pivot. Expect near-term support
around 392 and below there at 384 2/4, with resistance levels at 404 and 409. A
positive signal for trend short-term was given on a close over the 9-bar moving
average. Stochastics are at mid-range, but trending higher which should
reinforce a move higher if resistance levels are taken out. The next upside
objective is 409.

 

LIVE CATTLE RECAP

3/18/2004

April cattle opened near unchanged on the session
but closed sharply lower with active long liquidation from speculators noted in
the pit. Ideas that cash markets may peak this week helped trigger the selling.
Slaughter came in at 128,000 head as compared with trade expectations at
118,000-126,000 head. This brought slaughter for the week to 488,000 head.
Positioning ahead of the Cattle-on-Feed report for tomorrow added to the bearish
tone with traders are looking for on-feed supplies for March 1st to come in near
103.8% of last year (range 103-105), February placements at 96.2% (range
90.6-102.6) and February marketings at 98.6% (95.9-100.5). Boxed-beef cut-out
values were up 29 cents to $144.93.

Technical Outlook

#CATTLE (APR) 3/19/2004: Stochastics turning
bearish at overbought levels will tend to support lower prices if support levels
are broken. The next downside objective is 78.82. The close below the 1st swing
support could weigh on the market. Bearish daily studies indicate selling minor
rallies this session. Support should be encountered at 79.57 and below there at
78.82. Market resistance is at 81.65 and then again at 82.97. A negative signal
for trend short-term was given on a close under the 9-bar moving average.

 

LEAN HOGS RECAP

3/18/2004

The hog market pushed sharply higher with June
hogs and May bellies up the limit on ideas that exports will remain strong and
hopes for further declines in belly stocks due to stronger than expected bacon
demand this year. Cash markets were $1.00 higher. News that Japanese hogs are
being tested for cholera helped reinforce ideas that exports could remain
strong. Slaughter for the week has reached 1.545 million head as compared with
1.483 million last week and 1.524 million last year.

Technical Outlook

#HOGS (APR) 3/19/2004: Market positioning is
positive with the close over the 1st swing resistance. Resistance levels comes
in at 66.45 and 66.80 today, while support is around 65.07 and then 64.05. The
market rallied to a new contract high. Short-term indicators suggest buying
pullbacks today. The close above the 9-day moving average is a positive
short-term indicator for trend. The crossover up in the daily stochastics is a
bullish signal. The near-term upside target is at 66.80.

 

COCOA MARKET RECAP

3/18/2004

The cocoa market mounted another minor rise in
the action Thursday with the small specs apparently fueling most of the upside
action. News that the Nigerian 2004-2005 crop would be 200,000 to 210,000 tons
but it would seem that Nigerian plans to expand production will not take place
due to a lack of funds. So far, the market is not factoring in recent dry
weather patterns in some African regions and that is because the weather issue
isn’t significant yet!

Technical Outlook

COCOA (MAY) 03/19/04 The market has a slightly
positive tilt with the close over the swing pivot. Cocoa should run into
resistance at 1466 and above there at 1487 with support at 1437 and 1429.
Positive momentum studies in the neutral zone will tend to reinforce higher
price action. The next upside target is 1486.75.

 

COFFEE MARKET RECAP

3/18/2004

A big range down was mostly rejected in the
action Thursday but with the gap down opening one has to see the chart structure
as damaged. Origin selling seemed to pressure prices early as did news that the
Brazilian government was trying to end the Farm Inspector strike. Apparently the
coffee market ran a number of stops early in the session but it would seem that
some buyers we willing to step in front the weakness and buy coffee. In order
for the coffee to rise sharply off Brazilian strike issue the stalemate will
have to continue well into the future and to a degree the coffee price structure
has already factored part of the strike issue with the gains earlier this week.

Technical Outlook

COFFEE (MAY) 3/19/04 The market tilt is slightly
negative with the close under the pivot. The daily stochastics have crossed over
down which is a bearish indication. The next downside objective is now at 73.70.
The Coffee contract should run into resistance at 77.30 and above there at 78.10
with support at 75.1 and 73.70. The market’s short-term trend is positive on a
close above the 9-day moving average.

 

SUGAR MARKET RECAP

3/18/2004

May sugar close 4 higher on the session but 27
points off of the lows of the day as the market held initial support at the 653
level on the early break and speculative selling dried up. Aggressive fund
selling in London triggered the early sharp break. Through March 17th, Russia
had refined 561,393 tonnes of white sugar from imported raws for the season as
compared with 756,184 tons last year at this point. High freight rates have
caused a significant drop in imports from many key end users and commercial
buying on corrections might be expected as buyers try to “catch-up” on bookings.
Open interest continues to rise and has recovered to near the record highs of
late February as funds appear to be building a large net long position. The EU
sold 37,500 tonnes of white sugar at their weekly tender. May futures have
closed higher in 10 of the past 11 trading sessions.

Technical Outlook

#SUGAR (MAY) 3/19/2004: The upside daily closing
price reversal gives the market a bullish tilt. The close over the pivot swing
is a somewhat positive setup. Swing resistance comes in at 7.04, with support
found at 6.44. The close above the 9-day moving average is a positive short-term
indicator for trend. The crossover up in the daily stochastics is a bullish
signal. The near-term upside target is at 7.04. The market is becoming somewhat
overbought now that the RSI is over 70.

 

COTTON MARKET RECAP

3/18/2004

July Cotton closed 160 higher and at the highest
level since March 5th as the weekly export sales readings fueled fresh long
interest. The weekly export sales report, released before the opening, showed
sales of 458,000 bales compared to estimates of 200,000-400,000 bales. It would
seem that some players are expecting cotton to loss planted area to soybeans
where significant premiums for soybeans are attracting interest. A sharp decline
in the US Dollar might also have provided support to cotton as that could make
US cotton cheaper in the eyes of the world. The Cotlook A Index was up 35 to
71.95.

Technical Outlook

#COTTON (MAY) 3/19/2004: A positive signal for
trend short-term was given on a close over the 9-bar moving average. The market
has a bullish tilt coming into today’s trade with the close above the 2nd swing
resistance. Next resistance area comes in at 68.20 and then again at 68.44,
while support is targeted at 67.31 and 66.66. Rising from over sold levels,
daily momentum studies would support higher prices especially on a close above
resistance. The next upside objective is 68.44. If yesterday’s gap higher on the
day session chart holds, additional buying could develop this session.