Bellies At All-Time High–Thanks To Atkins?

Technical Outlook

#BONDS (JUN) 05/04/04: With the close higher than
the pivot swing number, the market is in a slightly bullish posture. Near-term
resistance for bonds is at 107.19 and then again at 107.31, while swing support
hits at 106.25 and below there at 106.11. The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. 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 107.31.

T-NOTES(JUN) The daily closing price reversal
down puts the market on the defensive. Daily momentum studies are on the rise
from low levels and should accelerate a move higher on a push through the 1st
swing resistance. The near-term upside objective is at 110.30. It is a mildly
bullish indicator that the market closed over the pivot swing number. Near-term
resistance for the T-Notes is at 110.23 and then again at 110.30, while swing
support hits at 110.08 and below there at 110.01. The market’s short-term trend
is negative as the close remains below the 9-day moving average.

 

STOCK INDICES RECAP

5/3/2004

The stock market finally managed to rise off
decent economic information and that would seem to suggest that the market is
getting over the constant concern of higher interest rates. It would be a good
thing for the stock market to get over the fear of higher interest rates as the
FOMC meets on Tuesday and that market might be confronted with a slight bias
shift. Supposedly players were hunting for bargains and that is also a change of
pace from recent action. We suspect that the market benefited from strength in
the oil sector but significant additional gains in energy prices could begin to
foster concern for the overall recovery.

Technical Outlook

#S&P500 (JUN) 05/04/04: With the close over the
1st swing resistance number, the market is in a moderately positive position.
Underlying support comes in at 1111.50 and 1105.30, with overhead resistance at
1120.90 and 1124.10. 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
1105.30.

S&P E-Mini (JUN): Daily stochastics declining
into oversold territory suggest the selling may be drying up soon. The next
downside objective is 1099.94. The market setup is supportive for early gains
with the close over the 1st swing resistance. Near-term resistance for the S&P
Mini is at 1123.13 and then again at 1127.44, while swing support hits at
1109.38 and below there at 1099.94. A negative signal for trend short-term was
given on a close under the 9-bar moving average.

NASDAQ (JUN) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. With the
close higher than the pivot swing number, the market is in a slightly bullish
posture. The market should run into resistance at 1426.75 and above there at
1441.13 with support at 1401.25 and 1390.13. Momentum studies are declining, but
have fallen to oversold levels. The next downside target is 1390.1.

MINI DOW (JUN) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. The
market should run into resistance at 10349 and above there at 10384 with support
at 10242 and 10170. Momentum studies are declining, but have fallen to oversold
levels. The next downside target is 10170. A positive setup occurred with the
close over the 1st swing resistance.

 

CURRENCY MARKET RECAP

5/3/2004

The Dollar started the session out weak but then
managed to gather upside momentum as the session wore on. Certainly decent US
economic numbers and a higher US equity market might have given the Dollar a
little extra lift. The fact that the US stock market seemed to become
comfortable with the prospect of higher interest rates should mean that the
market thinks that the US can get beyond the initial move to hike interest
rates. However, the trade is mostly dependant on seeing the US hike rates and
then continue to post strong economic numbers.

Technical Outlook

#CURRENCIES 05/04/04: YEN (JUN): 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. Swing resistance is targeted at 91.00 and above
there at 91.24, with the yen finding support around 90.47 and below there at
90.18. The close under the 40-day moving average indicates the longer-term trend
could be turning down. 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 91.24.

EURO (JUN): 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 1.1992. The market is in a
bearish position with the close below the 2nd swing support number. Swing
support for the Euro comes in at 1.1870, with overhead resistance at 1.1992. The
market’s short-term trend is positive on a close above the 9-day moving average.
The major trend is down with the cross over back below the 40-day moving
average. The gap down on the day session chart is bearish with more selling
pressure possible today.

PRECIOUS METALS RECAP

5/3/2004

The gold market tried to flesh out some gains
Monday but failed to sustain the early gains. The Dollar seemed to regain its
poise as the session progressed and that caused gold bulls to stand aside from
early buys. The silver market finished weaker Monday as if the increased Mexican
production issue was the cause behind the weakness. The fact that copper and
platinum finished higher makes the performance in silver and gold seem that much
more anemic.

Technical Outlook

#P-METALS 05/04/04: SILVER (JUL): With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
Initial support for silver is at 609.0 and below there at 609.0 with resistance
likely at 609.0 and 609.0. The market’s close below the 9-day moving average is
an indication the short-term trend remains negative. 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 609.0.

GOLD (JUN): Support for gold today comes in near
383.88, while resistance is pegged at 391.68. Daily momentum studies are on the
rise from low levels and should accelerate a move higher on a push through the
1st swing resistance. The near-term upside objective is at 391.68. The market’s
close below the pivot swing number is a mildly negative setup. The market’s
short-term trend is negative as the close remains below the 9-day moving
average.

 

COPPER MARKET RECAP

5/3/2004

The copper market certainly got some distance out
of the news that labor problems were surfacing in Chile. Apparently the market
was able to discount the talk that Chinese exchange stocks fell significantly
last week off mere exchange movements instead of physical demand. With the
Chinese still on holiday it is a little surprising that the copper market
managed such an aggressive rally on Monday. Even more surprising is that the
copper market made the gains despite talk from Codelco that the company would
see production rise by close to 14% in 2004.

 

ENERGY MARKET RECAP

5/3/2004

Energy prices leaped higher Monday as a series of
refinery woes created concern for future sloppy. The market was probably also
factoring in some of the weekend violence in Saudi Arabia, which is certainly
cause for renewed speculative buying. The fact that a series of US refineries
posted problems simply underscored the difficulty in rebuilding supplies ahead
of the big demand window. Nigeria added to the bullish speculation with
suggestions that OPEC would not change policy because of political pressure and
would only change policy because of market fundamentals. We did see a rumor
during the session on the Dow Jones newswires that suggested the EPA might “nix”
gasoline waivers but we thought that the market was already beyond that rumor.

Technical Outlook

#ENERGIES 05/04/04: CRUDE OIL (JUN): The rally
brought the market to a new contract high. With the close over the 1st swing
resistance number, the market is in a moderately positive position. Support for
crude is keyed on 37.69 and below there at 36.94, with resistance pegged at
38.74 and 39.04. The market’s short-term trend is positive on a close above the
9-day moving average. The daily stochastics gave a bullish indicator with a
crossover up. The near-term upside objective is at 39.04. Consider buying
pull-backs since daily studies are bullish.

UNLEADED GAS (JUN): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 129.43. 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. Resistance today is at 129.43, while support should be
found around 121.63. 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. The 9-day RSI over 70 indicates the market is approaching overbought
levels.

HEATING OIL (JUN): With the close over the 1st
swing resistance number, the market is in a moderately positive position.
Heating oil should encounter support around 92.55, with resistance is at 99.75.
Short-term indicators suggest buying dips today. The market’s short-term trend
is positive on a close above the 9-day moving average. The daily stochastics
gave a bullish indicator with a crossover up. The near-term upside objective is
at 99.75. The outside day up is a positive signal. The rally brought the market
to a new contract high. The upside closing price reversal on the daily chart is
somewhat bullish.

 

CORN MARKET RECAP

5/3/2004

The market garnered support today on ideas that
some corn acres might be shifted to soybeans because of the weekend rains. The
market might have seen support from the USDA Grain Inspections for corn, which
came in at 33.045 million bushels versus 26.181 million last week. Expectations
in corn inspections were for 37 to 41 million but that didn’t seem to limit the
bullish tilt in prices. The 6 to 10 day weather forecast was also thought to be
supporting prices as temps are projected to be above normal and precipitation is
expected to be below normal. Apparently the trade is still pumped up off the
idea that Thai developments might increase the potential for more US corn
exports down the road. According to floor sources, the demand outlook seems to
be carrying more influence in the trade than the prospect of a serious delay in
corn planting progress. Major resistance for July corn is at the 329 gap from
April 12th.

Technical Outlook

#CORN (JUL) 05/04/04: 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 327 3/4. The
market’s close above the 2nd swing resistance number is a bullish indication.
Market resistance comes in at 327 3/4 today, with support at 319 3/4. The
market’s short-term trend is positive on a close above the 9-day moving average.

 

SOY COMPLEX RECAP

5/3/2004

The market closed firmer today on further
reductions in crop production estimates for South America. The Buenos Aires
Grain Exchanged has lowered its estimate of the Argentine crop to 32.5 versus a
previous estimate of 33.7 million metric tons and 34.8 million last year. USDA
Grain Inspections for soybeans came in 6.784 versus 3.55 million in the prior
week. Expectations for inspections called for 5 to 9 million bushels. It is
possible that the market was lifted by expectations in the 6 to 10 day weather
forecast that called for above normal temps and below normal precipitation. The
trade certainly is still factoring the slightly smaller Brazilian crop forecast
from last week and is possibly gathering some support from ideas that the
weekend rain provided more uncertainty in plantings than had been the case for
most of April. While another private Brazilian forecast lowered their forecast
for the crop that new forecast was not below the figured floated last week by a
separate entity. Apparently the trade is simply being cheered on by ideas that
more and more players are lowering their production estimates. Near-term support
for July soybeans comes in at 1011, with 1031 1/2 and 1045 as next resistance
and 1164 as longer-term resistance. Support for November soybeans comes in at
751 1/2, with 799 as a longer-term resistance level.

Technical Outlook

#SOYBEANS (JUL) 05/04/04: With the close higher
than the pivot swing number, the market is in a slightly bullish posture. The
next area of resistance is around 1031 and 1041 1/2, while 1st support hits
today at 1010 1/2 and below there at 1000 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 1041 1/2.

MEAL (JUL): 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 329.6. First resistance comes
in at 325.3, with support at 317.1. The market’s short-term trend is positive on
a close above the 9-day moving average. With the close over the 1st swing
resistance number, the market is in a moderately positive position. Consider
buying pull-backs since daily studies are bullish.

BEAN OIL (JUL): 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 34.10. It is a slightly negative
indicator that the close was lower than the pivot swing number. The daily
closing price reversal up is positive. Daily swing resistance is found at 33.68
and above there at 34.10. Support should be encountered at 32.96 and 32.66.

 

WHEAT MARKET RECAP

5/3/2004

Wheat closed strong, egged on by weather concerns
in the winter wheat belt. A cold snap over the weekend in Kansas has raised
concerns of damage to that crop, especially with hot (90 degrees plus) and dry
weather expected there this week. the extent of the damage is not yet known, but
the hot and dry temps forecast for the winter wheat belt is a growing concern.
Also, heavy rains fell in southern Indiana over the weekend, causing some damage
there as well. Export inspections came in at the bullish end of expectations
this morning with 26.688 million bushels being inspected versus expectations of
20-25 million and 29.572 reported last week. Deliveries this morning totaled 694
contracts. In the first two days for the May delivery period, notices have come
in below expectations. The 6-10 day forecasts for the northern and southern
winter wheat belts, the spring wheat belt and the Canadian Prairies all call for
above normal temperatures and below normal precipitation.

Technical Outlook

#WHEAT (JUL) 05/04/04: Short-term indicators
suggest buying dips today. A positive setup occurred with the close over the 1st
swing resistance. Look for near-term support at 393 1/2 and below there at 388
3/4, with resistance levels at 400 1/2 and 402 3/4. 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 402 3/4.

 

LIVE CATTLE RECAP

5/3/2004

Live cattle futures traded to new contract highs
today as cash cattle prices are expected to trade firmer this week. June live
cattle closed 1.80 higher at 82.20, while August closed 1.42 higher at 84.27.
Short covering and light fund buying were noted. Boxed beef and cash live cattle
prices held firm. Cash cattle in the plains were offered at $90 with no bids.
Sales were mostly $87 last week and $85 the week before that. At noon, the boxed
beef cutout for Choice 600-750 was up 1.64 to 159.57. Slaughter came in at
124,000 head versus expectations of 114,000 to 122,000.

Technical Outlook

#CATTLE (JUN) 05/04/04: Studies are showing
positive momentum, but are now in overbought territory so some caution is
warranted. The next upside target is 83.52. A positive setup occurred with the
close over the 1st swing resistance. Support should be encountered at 81.42 and
below there at 80.42. Market resistance is at 82.97 and then again at 83.52. 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. The 9-day RSI
over 70 indicates the market is approaching overbought levels.

 

LEAN HOGS RECAP

5/3/2004

Hogs and bellies opened strong on follow through
from Friday’s limit-up close. Bellies finished very strong, with the nearby May
contract up the 300 point limit, while lean hogs closed firm but off their
highs. June hogs closed 0.77 higher at 74.85 after reaching a high of 75.47.
Cash hog prices were quoted $0.50 to $1.00 higher early in the session but as
the session wore on packers pulled their bids back to steady citing narrowing
margins. Estimated hog slaughter came in at 371,000 head versus expectations of
376,500 to 380,000 and 384,000 a week ago.

Technical Outlook

#HOGS (JUN) 05/04/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Resistance levels
comes in at 75.40 and 75.97 today, while support is around 74.32 and then 73.82.
The gap up on the day session chart gave a bullish indicator and more follow
through could be seen this session. 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 75.97.

 

COCOA MARKET RECAP

5/3/2004

The cocoa market finished sharply lower as the
small traders apparently were forced from position by a series of failures on
the charts. It is possible that the trade saw strong dialogue from the UN
Security Council as a sign that violence would not be tolerated but it is also
possible that reports of Nigerian efforts to expand production provided a
backdrop for selling. Some traders also think that the funds were interested in
attacking prices considering the magnitude of the gains off the April lows. If
the cocoa market sees the threat of violence at the Ivory Coast decline that
certainly prompts the small specs to exit.

Technical Outlook

COCOA (JUL) 05/04/04 There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. Cocoa should run into resistance at 1401 and above there at 1425
with support at 1369 and 1361. Positive momentum studies in the neutral zone
will tend to reinforce higher price action. The next upside target is 1424.50.

 

COFFEE MARKET RECAP

5/3/2004

July coffee closed 65 higher, but within Friday’s
range and above critical support at 69. However, with the London market closed,
NY had little new trading information which led to some short covering after
last week’s lower price action. Harvest in Brazil’s southerly most state, Parana,
began early as a result of drought conditions with the crop size now reduced by
an estimated 1.4%. Rain is expected in Parana by mid-week which may slow
harvest.

Technical Outlook

COFFEE (JUN) 5/4/04 The market has a slightly
positive tilt with the close over the swing pivot. Momentum studies are
declining, but have fallen to oversold levels. The next downside objective is
now at 68.80. The Coffee contract should run into resistance at 70.15 and above
there at 70.50 with support at 69.3 and 68.80. The market’s short-term trend is
negative as the close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

5/3/2004

July sugar continued to trade choppy, closing 6
lower, but still within the well established range between 7.15 and 6.70. With
London closed, the market lacked a directional indicator. In tender news,
Algeria bought 26,000 tons of raw sugar from Brazil while Egypt confirmed the
purchase of 125,700 tons of raw sugar from various sources. Algeria, a major
world sugar buyer, said that imports totaled 64,099 tonnes for the 1st quarter,
2004. The latest COT report shows the market somewhat overbought with the
combined fund and spec position still over 100,000 contracts net long. Without a
new bullish impetus to spark more buying, sugar looks to drift lower.

Technical Outlook

#SUGAR (JUL) 05/04/04: The market’s close below
the pivot swing number is a mildly negative setup. Swing resistance comes in at
7.15, with support found at 6.65. 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 6.65.

 

COTTON MARKET RECAP

5/3/2004

July cotton closed 88 higher on the day at 60.24
and December cotton closed 113 higher at 62.86. Talk that some cotton acreage
was going to go to soybeans provided the biggest lift to prices but we also
think that improved attitudes toward Asian demand and US demand for that matter
gave the cotton market reason to short cover. Apparently fund buyers are noted
players Monday and after the recent COT report reading, we are not surprised
that the funds were aggressive buyers. The CotLook A Index was unavailable
Monday due to the international holiday.

Technical Outlook

#COTTON (JUL) 05/04/04: The market’s close below
the 9-day moving average is an indication the short-term trend remains negative.
A positive setup occurred with the close over the 1st swing resistance. Next
resistance area comes in at 61.09 and then again at 61.77, while support is
targeted at 59.39 and 58.37. Negative momentum studies in the neutral zone will
tend to reinforce lower price action. The next downside target is 58.37. The
daily closing price reversal up is positive.