Bonds Wait For FOMC…

Technical Outlook

#BONDS (SEP) 6/30/2004: The daily closing price
reversal up is a positive indicator that could support higher prices. The market
has a slightly positive tilt with the close over the swing pivot. Near-term
resistance for bonds is at 105.32 and then again at 106.07, while swing support
hits at 105.03 and below there at 104.13. A positive signal for trend short-term
was given on a close over the 9-bar moving average. Stochastics turning bearish
at overbought levels will tend to support lower prices if support levels are
broken. The next downside objective is 104.13.

T-NOTES(SEP) The upside closing price reversal on
the daily chart is somewhat bullish. 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 107.30. The market’s close below
the pivot swing number is a mildly negative setup. Near-term resistance for the
T-Notes is at 109.00 and then again at 109.06, while swing support hits at
108.12 and below there at 107.30. The market’s short-term trend is positive on a
close above the 9-day moving average.

 

STOCK INDICES RECAP

6/29/2004

The stock market started out higher paused, tried
to correct but then was lifted by a much stronger than expected set of consumer
confidence numbers. It almost appeared as if the market were going to start a
big early pre-holiday type rally but then the market realized that the FOMC
meeting was still hanging over the market. In other words, it might be difficult
completely ignore the threat of higher interest rates into the afternoon trade
on Wednesday. One should note that the market managed to back and fill several
times during the session and that aggressive buying surfaced on several
occasions.

Technical Outlook

#S&P500 (SEP) 6/30/2004: The close over the pivot
swing is a somewhat positive setup. Underlying support comes in at 1132.45 and
1128.28, with overhead resistance at 1139.55 and 1142.48. The close above the
9-day moving average is a positive short-term indicator for trend. Stochastics
trending lower at midrange will tend to reinforce a move lower especially if
support levels are taken out. The next downside objective is now at 1128.28.

S&P E-Mini (SEP): The daily closing price
reversal up is positive. Negative momentum studies in the neutral zone will tend
to reinforce lower price action. The next downside target is 1123.94. 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 1141.63 and then again at
1145.44, while swing support hits at 1130.88 and below there at 1123.94. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative.

NASDAQ (SEP) A positive signal for trend
short-term was given on a close over the 9-bar moving average. The market setup
is supportive for early gains with the close over the 1st swing resistance. The
market should run into resistance at 1515.50 and above there at 1521.75 with
support at 1499.50 and 1489.75. Daily studies suggest buying dips today. Rising
stochastics at overbought levels warrant some caution for bulls. The next upside
objective is 1521.75.

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 10449 and above there at 10482 with support at 10351 and 10286.
Stochastics trending lower at midrange will tend to reinforce a move lower
especially if support levels are taken out. The next downside target is now at
10286. The close over the pivot swing is a somewhat positive setup.

 

CURRENCY MARKET RECAP

6/29/2004

The Dollar finally got a set of numbers that were
strong enough to facilitate the idea of an aggressive rate hike from the US Fed.
Maybe the Fed won’t go the bigger amount, but those short the Dollar didn’t feel
like staying short after the strong confidence numbers on Tuesday. It was clear
from the action that the Pound and Swiss were the most vulnerable and with the
technical damage done to those currencies it wouldn’t be surprising to see
follow through liquidation on Wednesday. In some of the Confidence readings the
Index gained 6-7 points and that is a huge improvement in the US economic
outlook! Combine the Confidence numbers with the action in the US equity market
and things are looking much better for the Dollar.

Technical Outlook

#CURRENCIES 6/30/2004: YEN (SEP): A positive
signal for trend short-term was given on a close over the 9-bar moving average.
The close below the 1st swing support could weigh on the market. Swing
resistance is targeted at 92.93 and above there at 93.18, with the yen finding
support around 92.37 and below there at 92.06. Stochastics turning bearish at
overbought levels will tend to support lower prices if support levels are
broken. The next downside objective is 92.06.

EURO (SEP): 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 1.2200. The defensive setup, with
the close under the 2nd swing support, could cause some early weakness. Swing
support for the Euro comes in at 1.1974, with overhead resistance at 1.2200. The
close below the 9-day moving average is a negative short-term indicator for
trend. More selling pressure is likely given yesterday’s gap lower price action
on the day session chart.

 

PRECIOUS METALS RECAP

6/29/2004

The gold market detected a subtle improvement in
the Dollar action and was quick to washout. With a much stronger than expected
US Consumer Confidence report there is certainly a reason to fear sharply higher
US interest rates and that in turn forces a number of spec longs from the
market. Since we also saw a wholesale liquidation in copper and some selling in
silver and platinum it is clear that improving macro economic conditions hurt
the metals instead of help them. In short, the metals all seemed to be hoping
for ongoing economic uncertainty and aren’t the least supported by the idea that
physical demand for the metals could rise in a good economy.

Technical Outlook

#P-METALS 6/30/2004: SILVER (SEP): The market
back below the 40-day moving average suggests the longer-term trend could be
turning down. The market tilt is slightly negative with the close under the
pivot. Initial support for silver is at 579.6 and below there at 572.8 with
resistance likely at 589.8 and 595.1. 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. The next downside objective is
572.8.

GOLD (AUG): Support for gold today comes in near
385.90, while resistance is pegged at 401.90. A crossover down in the daily
stochastics is a bearish signal. The next downside target is now at 385.90. The
defensive setup, with the close under the 2nd swing support, could cause some
early weakness. The close below the 9-day moving average is a negative
short-term indicator for trend. More selling pressure is likely given
yesterday’s gap lower price action on the day session chart.

 

COPPER MARKET RECAP

6/29/2004

The copper market caved in and mostly stayed
sharply lower for the session. Aggressive sell stop actions by the funds were
supposedly behind the slide and that could have kicked off a number of fresh
technical sell orders. It is a little surprising that the improved macro
economic outlook didn’t provide more support to the market as US Consumer
Confidence improved smartly and there were reports during the session that
shipping rates to China were once again firming. In short the fundamental case
in copper is good but the technical condition is undermined.

 

ENERGY MARKET RECAP

6/29/2004

The energy complex continued its downward thrust
and with all the talk about rising OPEC supply, more control being seen in Iraq
and less tightness in the US one can hardly refute the bear case. The market is
expecting another rise in US crude oil stocks in the weekly readings Wednesday
and that is enough to keep the sellers in control. Seeing the unleaded market
lose the most ground Tuesday suggests that the market isn’t even concerned about
the kick off to the summer demand window and the relatively tight level of US
gasoline supplies.

Technical Outlook

#ENERGIES 6/30/2004: CRUDE OIL (AUG): The market
setup is somewhat negative with the close under the 1st swing support. Support
for crude is keyed on 35.28 and below there at 35.07, with resistance pegged at
36.04 and 36.59. The close below the 9-day moving average is a negative
short-term indicator for trend. Momentum studies are still bearish, but are now
at oversold levels and will tend to support reversal action if it occurs. The
next downside target is now at 35.07. Short-term indicators on the defensive.
Consider selling an intraday bounce.

UNLEADED GAS (AUG): A bearish signal was
triggered on a crossover down in the daily stochastics. The next downside
objective is 109.31. The market tilt is slightly negative with the close under
the pivot. Resistance today is at 116.01, while support should be found around
109.31. A negative signal for trend short-term was given on a close under the
9-bar moving average.

HEATING OIL (AUG): It is a slightly negative
indicator that the close was under the swing pivot. Heating oil should encounter
support around 95.73, with resistance is at 99.53. The close below the 9-day
moving average is a negative short-term indicator for trend. Stochastics
trending lower at midrange will tend to reinforce a move lower especially if
support levels are taken out. The next downside target is now at 95.73.

 

CORN MARKET RECAP

6/29/2004

While crop conditions improved less than expected
in last nights weekly crop progress report and soybean prices were higher early
in the session, the trade sees the weather forecast as a bearish development
with much of the corn crop expected to pollinate in good weather conditions
which keeps the crop on track for record yields. This helped to attract long
liquidation selling ahead of the reports after the early bounce. Traders expect
next weeks crop conditions report to show further improvement. CBOT corn
registrations late Monday were reported at 26 lots, unchanged from Friday with
traders looking for 0-200 lots for delivery on first notice day tomorrow. For
the USDA reports, released tomorrow before the opening, the average trade
estimate for June 1st stocks is at 2.96 billion bushels (range 2.921-3.029) as
compared with 2.985 billion last year. For planted acreage, the average trade
estimate is at 80.31 million acres (range 79.79-81.2) as compared with 79.00
million acres from the March USDA report and 78.74 million last year. December
corn support comes in at 276 and 272 1/4 with resistance at 282 3/4 and 285 1/2.

Technical Outlook

#CORN (DEC) 6/30/2004: The daily stochastic’s
gave a bearish indicator with a crossover down. The next downside target is now
at 272 1/4. It is a slightly negative indicator that the close was under the
swing pivot. Market resistance comes in at 284 1/4 today, with support at 272
1/4. The close below the 9-day moving average is a negative short-term indicator
for trend. The daily closing price reversal down is a negative indicator for
prices.

 

SOY COMPLEX RECAP

6/29/2004

Continued concerns with tight stocks and
continued firm cash tone helped to support the July contract ahead of first
notice with talk that the sharp break yesterday may have been overdone. The
decline in crop conditions for the weekly report (down 1% in good-to-excellent
to 66%) was seen as a bullish surprise but many traders believe that the weather
forecast into next week suggests that crop conditions will improve for next
week. Stats Canada pegged Canola planted acreage at 12.81 million acres this
morning which is up 9.5% from last year but near the low end of trade
expectations. For the USDA reports, released tomorrow before the opening, the
average trade estimate for June 1st stocks is at 399 million bushels (range
362-455) as compared with 602 million last year. For planted acreage, the
average trade estimate is 74.96 million acres (range 74.2-76.0) as compared with
75.4 million acres from the March USDA report and 73.4 million last year.
Registrations for soybeans, meal and oil were unchanged from Friday at 3 lots,
284 lots and 4190 lots respectively. For first notice day, traders look for no
soybean deliveries, 0-100 for meal and near 2000 oil. Support for November
soybeans comes in at 697 and 689 with 707 and 709 as resistance.

Technical Outlook

#SOYBEANS (NOV) 06/30/04 The market has a
slightly positive tilt with the close over the swing pivot. The next area of
resistance is around 705 and 710 2/4, while 1st support hits today at 694 and
below there at 688 2/4. A positive indicator was given with the upside crossover
of the 9 & 18 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 710 2/4.

MEAL (DEC): 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 224.2. First resistance comes in
at 221.0, with support at 216.5. The close above the 9-day moving average is a
positive short-term indicator for trend. It is a slightly negative indicator
that the close was under the swing pivot.

BEAN OIL (DEC): 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 26.43. 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. Daily swing
resistance is found at 26.05 and above there at 26.43. Support should be
encountered at 24.95 and 24.23. The market now above the 40-day moving average
suggests the longer-term trend is up.

 

WHEAT MARKET RECAP

6/29/2004

Improving crop conditions for the spring wheat
crop and a lack of new export news has kept the tone weak ahead of the USDA
reports for the morning but December wheat managed to close higher. Good harvest
weather for the winter wheat crop is seen as a bearish factor which promotes
increased commercial selling. Stats Canada pegged All Wheat planted acreage at
25.491 million acres this morning which is down 3% from last year but in the
range of trade expectations (24.7-26.0). For the USDA reports, released tomorrow
before the opening, the average trade estimate for Wednesday morning’s USDA June
1st stocks report at 537 million bushels (range 522-549) as compared with 491
million last year. For planted acreage, the survey showed an average trade
estimate of 13.26 million acres for spring wheat (range 12.9-13.5) as compared
with 13.84 million acres last year. All wheat acreage is thought to be near
59.416 million acres as compared with the March USDA forecast of 59.462 million
and 61.7 million acres last year. CBOT wheat registrations late Monday were
reported at 2100 lots, down 100 from Friday. Traders are looking for deliveries
on first notice day to come in near the 500-2000 lot range. September wheat
matched yesterday lows before bouncing. Resistance is at 341 and 347 1/2 with
330-335 as support zone.

Technical Outlook

#WHEAT (DEC) 6/30/2004: The market has a slightly
positive tilt with the close over the swing pivot. Expect near-term support
around 358 and below there at 355, with resistance levels at 362 2/4 and 364. A
negative signal for trend short-term was given on a close under the 9-bar moving
average. A bullish signal was given with an upside crossover of the daily
stochastics. The next upside objective is 364.

 

LIVE CATTLE RECAP

6/29/2004

August cattle re-captured part of the losses from
Monday as strength in the beef market and hopes for a negative final test for
mad cow helped to support renewed buying. Slaughter was lower than expected on
Monday which may have helped support the beef market. Boxed-beef cut-out values
were up $1.27 to $145.61 as compared with $145.34 last week at this time. A USDA
representative announced that there was no result yet on the animal (1st of
8,585 tested since June 1st) which received the first inconclusive result for
the quick mad cow test on Friday. Officials have indicated that the rapid test
carries a greater risk of false positive results but until the in depth test is
complete, there have been no details.

Technical Outlook

#CATTLE (AUG) 6/30/2004: 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 89.90. The market
setup is supportive for early gains with the close over the 1st swing
resistance. Daily studies suggest buying dips today. Support should be
encountered at 86.75 and below there at 85.40. Market resistance is at 89.00 and
then again at 89.90. The daily closing price reversal up is a positive indicator
that could support higher prices. A positive signal for trend short-term was
given on a close over the 9-bar moving average. The market now above the 40-day
moving average suggests the longer-term trend is up.

 

LEAN HOGS RECAP

6/29/2004

The weaker tone in the cash market and weakness
in pork product prices supported weakness early in the session but the market
managed to see higher trade into the mid-session. Cash hogs were $1.00 lower at
Peoria which helped pressure the market early in the session but the discount of
futures to cash and a strong cattle market helped to support a bounce to higher
on the day. Fears of hefty supplies into the late summer helped to pressure the
August contract late in the day. Bellies found support from expectations for
continued hefty out-movements. For the weekly cold storage report, for release
this afternoon, traders are looking for an out-movement of 500,000 to 1.0
million pounds.

Technical Outlook

#HOGS (AUG) 6/30/2004: The close over the pivot
swing is a somewhat positive setup. Resistance levels comes in at 76.47 and
76.92 today, while support is around 75.27 and then 74.52. The close above the
9-day moving average is a positive short-term indicator for trend. Stochastics
trending lower at midrange will tend to reinforce a move lower especially if
support levels are taken out. The next downside target is now at 74.52.

 

COCOA MARKET RECAP

6/29/2004

The cocoa market traded on both sides of
unchanged and showed little in the way of dominating action on Tuesday. A slight
tightening of US cocoa warehouse stocks hardly offsets the negative impact of a
firmer US Dollar. With the Ivory Coast political situation devoid of headlines
on Tuesday the bull camp really has little impetus to control prices. It seemed
like most of the volume Tuesday was associated with the spreads and that also
shows a lack of conviction.

Technical Outlook

COCOA (SEP) 06/30/04 The market has a slightly
positive tilt with the close over the swing pivot. Cocoa should run into
resistance at 1398 and above there at 1405 with support at 1373 and 1355.
Positive momentum studies in the neutral zone will tend to reinforce higher
price action. The next upside target is 1405.25.

 

COFFEE MARKET RECAP

6/29/2004

The market opened higher but failed to generate
new buying support and light long liquidation selling from fund traders left the
market closing 80 lower on the session and near the lows of the day. A lack of
threatening weather all the way out to July 13th has the market in a long
liquidation trend. Cash dealers in Brazil seem to think that tight old crop
stocks should support higher prices but buyers do not seem to interested in
extending coverage given the lack of threatening weather, the downtrend and a
surge in production expected for the harvest which is already underway for the
2004/2005 season. The lower close in spite of strength in London is seen as a
bearish development as exchange stocks continue to rise.

Technical Outlook

COFFEE (SEP) 6/30/04 The downside closing price
reversal on the daily chart is somewhat negative. The market tilt is slightly
negative with the close under the pivot. The 9-day RSI under 30 indicates the
market is approaching oversold levels. Momentum studies are declining, but have
fallen to oversold levels. The next downside objective is now at 72.90. The
Coffee contract should run into resistance at 74.50 and above there at 75.40
with support at 73.25 and 72.90. The market’s short-term trend is negative as
the close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

6/29/2004

October sugar closed 15 higher on the session to
a new contract high close which may help support increased fund and speculative
buying this week on a test of contract highs. Choppy, two-sided trade occurred
early in the session but the market found support when London futures firmed up
late in the day. Talk of the lower than expected crop from Thailand and hopes of
some increased export business soon helped to support. Indonesia’s state trading
firm obtained permit to import 17,000 tons of white sugar. Libya postponed a
tender to buy 100,000 tons of white sugar but there was no adverse reaction in
London. A dry trend during June in parts of Ukraine and Belarus along with a dry
forecast for the next week may have provided some support.

Technical Outlook

#SUGAR (OCT) 6/30/2004: Market positioning is
positive with the close over the 1st swing resistance. Swing resistance comes in
at 7.92, with support found at 7.56. 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 7.92. Short-term indicators suggest buying
pullbacks today.

 

COTTON MARKET RECAP

6/29/2004

December cotton moved under Monday’s low but
failed to find new selling interest ahead of the USDA planted acreage report,
for release before the opening, and the market bounced to close near unchanged
on the day. Volume was light. The market found some support from declining crop
conditions but most traders seems to think that the weather outlook is conducive
to improving conditions in next week’s weekly update. The average trade estimate
for the morning USDA planted acreage report is at 13.73 million acres (range
13.4-13.9) as compared with 14.4 million acres projected in the March intentions
report and 13.5 million last year.

Technical Outlook

#COTTON (OCT) 6/30/2004: A negative signal for
trend short-term was given on a close under the 9-bar moving average. The market
has a slightly positive tilt with the close over the swing pivot. Next
resistance area comes in at 53.00 and then again at 53.40, while support is
targeted at 52.05 and 51.50. Rising from over sold levels, daily momentum
studies would support higher prices especially on a close above resistance. The
next upside objective is 53.40.