Change In Sentiment On The Dollar?

Technical Outlook

#BONDS (SEP) 7/28/2004: 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 107.12 and then again at
108.16, while swing support hits at 105.27 and below there at 105.14. A negative
signal for trend short-term was given on a close under the 9-bar moving average.
Momentum studies trending lower at mid-range could accelerate a price break if
support levels are broken. The next downside objective is 105.14.

T-NOTES(SEP) 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 108.30. The market is in a bearish position
with the close below the 2nd swing support number. Near-term resistance for the
T-Notes is at 110.00 and then again at 110.20, while swing support hits at
109.05 and below there at 108.30. The market’s short-term trend is negative as
the close remains below the 9-day moving average.

 

STOCK INDICES RECAP

7/27/2004

The stock market caught a double lift Tuesday
from US economic reports and from favorable corporate earnings reports.
Apparently Target and Verizon were also prompting buyers to enter the market and
that came after Target merely confirmed that sales were running according to
plan. Seeing Consumer confidence rise to the highest level since 2002 was enough
to make the shorts question stock prices within striking distance of the year’s
lows. Some traders suggested that the stock market gains were more of a relief
rally 9short covering) than a fresh buying wave.

Technical Outlook

#S&P500 (SEP) 7/28/2004: Market positioning is
positive with the close over the 1st swing resistance. Underlying support comes
in at 1086.75 and 1079.88, with overhead resistance at 1098.25 and 1102.88. The
close below the 9-day moving average is a negative short-term indicator for
trend. The crossover up in the daily stochastics is a bullish signal. The
near-term upside objective is at 1102.88.

S&P E-Mini (SEP): A bullish signal was given with
an upside crossover of the daily stochastics. The next upside target is 1104.19.
A positive setup occurred with the close over the 1st swing resistance.
Near-term resistance for the S&P Mini is at 1099.13 and then again at 1104.19,
while swing support hits at 1085.88 and below there at 1077.69. The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative.

NASDAQ (SEP) A negative signal for trend
short-term was given on a close under 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 1403.25 and above there at 1413.38 with
support at 1377.75 and 1362.38. Rising from over sold levels, daily momentum
studies would support higher prices especially on a close above resistance. The
next upside objective is 1413.38.

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 10132 and above there at 10179 with support at 9994 and 9903. The
crossover up in the daily stochastics is a bullish signal. The near-term upside
target is at 10179. There could be more upside follow through since the market
closed above the 2nd swing resistance.

 

CURRENCY MARKET RECAP

7/27/2004

The Dollar apparently found enough favor from the
recent string of economic reports to garner more than simple short covering
favor. In fact, price action Tuesday appeared to be significant enough to signal
a change in sentiment. In addition to the better than expected economic reports
released Tuesday the US has managed an extending pattern of good reports. With
the massive decline in the Pound it would seem that technical trends might be in
the process of reversing. Therefore, many in the trade see the action Tuesday as
extremely important action.

Technical Outlook

#CURRENCIES 7/28/2004: YEN (SEP): A negative
signal for trend short-term was given on a close under the 9-bar moving average.
There could be some early pressure today given the market’s negative setup with
the close below the 2nd swing support. Swing resistance is targeted at 90.79 and
above there at 91.57, with the yen finding support around 89.67 and below there
at 89.33. The market back below the 40-day moving average suggests the
longer-term trend could be turning down. Daily stochastics declining into
oversold territory suggest the selling may be drying up soon. The next downside
objective is 89.33.

EURO (SEP): 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 1.1932. The defensive setup, with the
close under the 2nd swing support, could cause some early weakness. Swing
support for the Euro comes in at 1.1932, with overhead resistance at 1.2192. The
close below the 9-day moving average is a negative 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

7/27/2004

The gold market was lucky to have avoided even
more significant declines as the Dollar soared and appeared to be lifted off
sustainable developments in the US economy. In other words, the US economic
report slate has begun to indicate that the trade was overly negative toward US
prospects and that is giving the Dollar a fresh long interest. Because the gold
market has been almost exclusively focused on the Dollar the gold market sees
little in the way of fundamental support. Despite significant weakness in
platinum prices a key platinum producer suggested that demand for platinum was
very strong in certain key sectors.

Technical Outlook

#P-METALS 7/28/2004: SILVER (SEP): The market
tilt is slightly negative with the close under the pivot. Initial support for
silver is at 618.2 and below there at 610.6 with resistance likely at 624.9 and
631.2. A negative signal for trend short-term was given on a close under the
9-bar moving average. Momentum studies trending lower at mid-range could
accelerate a price break if support levels are broken. The next downside
objective is 610.6. The daily closing price reversal up is a positive indicator
that could support higher prices.

GOLD (OCT): Support for gold today comes in near
383.33, while resistance is pegged at 395.53. 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 383.33. 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. Some caution in pressing the downside is warranted with the RSI under 30.

 

COPPER MARKET RECAP

7/27/2004

Copper prices finally gave way to the extending
pattern of bearish developments. Before the opening the trade was aware that a
strike date had been delaying well in August and with the Chinese standing back
from cash activity the market was already vulnerable. However, during the
session the Codelco CEO suggested that political plans for a replacement of
mining royalty in Chile might result in significant overproduction in that
country and that was all it took foster a stop loss selling binge. The sharply
rising US Dollar also seemed to cause a series of previously purchased longs to
be thrown back and that accelerated the downside momentum.

 

ENERGY MARKET RECAP

7/27/2004

After the energy complex showed signs of balking
at prices above $42 the market re-gathered itself and resumed the upward march.
Apparently talk from Algeria that OPEC might be temporarily tapped out of
additional production capacity caused buyers to rush in and pay up for fresh
long plays. In fact, Algeria actually suggested that OPEC production was near a
peak and that Saudi Arabia might be the only country with excess capacity. Some
traders take the production news as an extremely ominous sign that the world
supply buffer is situated in one country and a country that remains under a
significant domestic terrorism threat.

Technical Outlook

#ENERGIES 7/28/2004: CRUDE OIL (SEP): The market
rallied to a new contract high. Market positioning is positive with the close
over the 1st swing resistance. Support for crude is keyed on 41.56 and below
there at 41.32, with resistance pegged at 42.13 and 42.46. 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 42.46.
Short-term indicators suggest buying pullbacks today.

UNLEADED GAS (SEP): Momentum studies trending
lower at mid-range could accelerate a price break if support levels are broken.
The next downside objective is 123.30. The market tilt is slightly negative with
the close under the pivot. Resistance today is at 126.10, while support should
be found around 123.30. A negative signal for trend short-term was given on a
close under the 9-bar moving average.

HEATING OIL (SEP): The close over the pivot swing
is a somewhat positive setup. Heating oil should encounter support around
112.16, with resistance is at 114.76. 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 114.76.

 

CORN MARKET RECAP

7/27/2004

While there is just a hint of a technical low,
the market remains in steep downtrend but managed to hold minor support from the
more friendly technical action on Monday. Perfect weather for the corn crop to
move past pollination and into the kernel fill stage combined with the break in
soybeans after a higher opening helped to pressure the market and attract new
fund selling. Good moisture in the soil and a lack of high temperatures suggests
that the tail end of pollination is going well which keeps the crop on track for
a record-setting yield. The crop is rated 77% good to excellent condition as
compared with 76% last week. Futures are oversold basis traditional technical
indicators and the market is operating under the positive influence of the
technical action yesterday. A lack of export news overnight has kept commercial
trade quiet and basis levels were steady into the opening. Support for December
corn comes in at 228 and 225 with 231 1/2 and 233 1/2 as resistance.

Technical Outlook

#CORN (DEC) 7/28/2004: Stochastics are rising
from over sold levels which is bullish and should support higher prices. The
near-term upside target is at 233 3/4. The close over the pivot swing is a
somewhat positive setup. Market resistance comes in at 233 3/4 today, with
support at 227 1/4. The close below the 9-day moving average is a negative
short-term indicator for trend. Some caution in pressing the downside is
warranted with the RSI under 30. The daily closing price reversal down is a
negative indicator for prices.

 

SOY COMPLEX RECAP

7/27/2004

The market was called lower on the opening but
some forecasters see hot and dry weather developing on the 11-15 day forecast
models and fear of a partial repeat of last year when weather turned harsh in
August. Higher basis levels at mid-session helped support a bounce but there was
not enough new buying to sustain the late gains. Crop conditions deteriorated
from 67% in good to excellent for the last week in July, 2003 to 45% good to
excellent by September 2nd, 2003. Improving crop conditions and an ideal week of
weather ahead helped to turn the market lower and yesterday’s positive technical
action will be negated on a move under yesterday’s lows at 586 for November
soybeans. Tight ending stocks for the old crop season supported the early gains
in August futures but commercial-type traders were active sellers in futures.
China futures prices were higher overnight. The crop is rated 69% good to
excellent condition as compared with 68% last week. Basis levels for nearby
delivery were firm into the opening. November soybean support comes in at 586
and 583 with 600 and 609 as resistance.

Technical Outlook

#SOYBEANS (NOV) 07/28/04 The market has a
slightly positive tilt with the close over the swing pivot. The next area of
resistance is around 607 2/4 and 617 3/4, while 1st support hits today at 586
2/4 and below there at 575 3/4. A negative signal for trend short-term was given
on a close under the 9-bar moving average. Daily stochastics declining into
oversold territory suggest the selling may be drying up soon. The next downside
objective is 575 3/4.

MEAL (DEC): Stochastics are rising from over sold
levels which is bullish and should support higher prices. The near-term upside
target is at 194.5. The daily closing price reversal down is a negative
indicator for prices. First resistance comes in at 189.6, with support at 180.1.
The close below the 9-day moving average is a negative short-term indicator for
trend. The close over the pivot swing is a somewhat positive setup.

BEAN OIL (DEC): A negative signal for trend
short-term was given on a close under the 9-bar moving average. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The next downside objective is 21.79. It is a slightly negative
indicator that the close was lower than the pivot swing number. The market could
take on a defensive posture with the daily closing price reversal down. Daily
swing resistance is found at 22.37 and above there at 22.59. Support should be
encountered at 21.97 and 21.79.

 

WHEAT MARKET RECAP

7/27/2004

New contract lows shortly after the opening leave
the bears in control. Continued talk of seasonal hedge selling pressures has
helped to break the market but commercial selling associated with harvest might
be winding down with 83% of the crop already harvested. Funds, however, continue
to sell the market and are likely building a hefty net short position. The
spring wheat crop is rated 70% good to excellent condition as compared with 68%
last week. Basis levels in the Midwest for soft red winter wheat were steady to
lower at some locations as producer movement was noted. A crop tour in North
Dakota will report results in the next few days and fields on the first day
showed yield potential above normal but not as high as last year. A lack of
export news overnight but reports of Egypt purchases from Russia keep the demand
tone weak and speculative selling is active. Support for September wheat comes
in at 319 3/4 and then 314 1/2 with 325 and 329 1/2 as short-term resistance.

Technical Outlook

#WHEAT (DEC) 7/28/2004: The market tilt is
slightly negative with the close under the pivot. Expect near-term support
around 333 and below there at 331 1/4, with resistance levels at 337 and 339
1/4. A negative signal for trend short-term was given on a close under the 9-bar
moving average. Daily stochastics declining into oversold territory suggest the
selling may be drying up soon. The next downside objective is 331 1/4.

 

LIVE CATTLE RECAP

7/27/2004

The August contract pushed higher led by a firm
tone for the cash market this week while October cattle experienced choppy,
two-sided trade until a late rally finding support from gains in the other
meats. Boxed-beef cut-out values came in at $2.40 higher to $141.74 as compared
with $136.59 one week ago. Cattle slaughter came in at 130,000 head a compared
with trade expectations at 126,000-130,000 head. Ideas that recent weather has
been more favorable to beef demand and that a low may be in place for the beef
market helped support the solid gains.

Technical Outlook

#CATTLE (OCT) 7/28/2004: Rising stochastics at
overbought levels warrant some caution for bulls. The next upside objective is
92.57. The market has a slightly positive tilt with the close over the swing
pivot. Support should be encountered at 90.12 and below there at 89.27. Market
resistance is at 91.77 and then again at 92.57. The market made a new contract
high on the rally. A positive signal for trend short-term was given on a close
over the 9-bar moving average.

 

LEAN HOGS RECAP

7/27/2004

October hogs pushed sharply higher on
follow-through technical buying from Monday’s limit-up trade and from positive
news for the cash market. Cash hogs were up .50 at most locations. With the
cooler air in the mid-west, traders had looked for larger producer marketings
but this has not materialized which has supported futures. In addition, October
futures are still trading at a substantial discount to the cash market. The CME
2-day lean index for the period ending July 23rd came in at 78.98, down .17 from
the previous session and down from 79.47 one week ago. For the weekly cold
storage report, released this afternoon, traders are looking for cold storage
stocks to fall by 700,000 to 2.0 million pounds as compared with an out-movement
of 917,000 pounds last week.

Technical Outlook

#HOGS (OCT) 7/28/2004: There could be more upside
follow through since the market closed above the 2nd swing resistance.
Resistance levels comes in at 70.35 and 70.97 today, while support is around
68.20 and then 66.72. The market rallied to a new contract high. 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 70.97. With a
reading over 70, the 9-day RSI is approaching overbought levels.

 

COCOA MARKET RECAP

7/27/2004

The cocoa market posted an inside trades of
action but didn’t totally throw off the bearish tilt left in place from the
setback on Monday. Apparently local players were buying cocoa instead of the
funds and that gives the market a fresh focus. Reports of good conditions in the
Nigerian 2004-2005 crop would seem to countervail the recent concern over the
dryness in the Ivory Coast crop. Many traders think that a large measure of the
gains since the July low were the result of concerns for the 2004-2005 crop and
therefore the Nigerian crop story is significant.

Technical Outlook

COCOA (SEP) 07/28/04 The market has a slightly
positive tilt with the close over the swing pivot. Cocoa should run into
resistance at 1622 and above there at 1637 with support at 1586 and 1565. The
9-day RSI over 70 indicates the market is approaching overbought levels. 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 1565.00.

 

COFFEE MARKET RECAP

7/27/2004

The coffee market pushed to new 3-week lows as
active speculative selling emerged in the early trade but a step-up in roaster
buying managed to provide some support. Traders are anticipating increased
selling pressures from the on-going harvest in Brazil as improving weather for
harvest emerges ahead. Conditions in the coffee growing areas of Brazil look dry
this week with some cooler weather for late in the week. This seems to be ideal
weather for increased harvest. A lack of support caused the truck drivers strike
in Brazil to be called-off which added to the bearish tone even thou the 3-day
strike did not help provide support. While technically oversold using short-term
indicators, the longer-term swing count on the downside break-out below the May
lows leaves a longer-term swing count down at 64.80 with next support at the
November lows at 65.55.

Technical Outlook

COFFEE (SEP) 7/28/04 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 67.45. The
Coffee contract should run into resistance at 68.30 and above there at 68.65
with support at 67.7 and 67.45. The market’s short-term trend is negative as the
close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

7/27/2004

The market inched higher in choppy, two-sided
trade as light speculative buying provided support on the early break. The
market is in the process of absorbing the sharp gains of the past few days and
looks poised for a test of the July highs. Traders see the 2004/2005
fundamentals as bullish but the short-term demand from buyers seems to be
lacking. It is still uncertain if buyers will be rewarded for their patience or
if the market might force end-users to pay-up for needs. Forward coverage is
thought to be light and the buying could be active once it begins. March sugar
support comes in at 860 with 902 as next upside objective if the July highs are
penetrated.

Technical Outlook

#SUGAR (OCT) 7/28/2004: The close over the pivot
swing is a somewhat positive setup. Swing resistance comes in at 8.31, with
support found at 8.09. 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 8.09.

 

COTTON MARKET RECAP

7/27/2004

Just like the grain markets the cotton market
sees very little threat against what is assumed to be a massive upcoming supply
flow. The trade apparently isn’t the least bit concerned that the technical
condition is becoming excessively oversold. If fact, the cotton market continued
to see technical liquidation off what was reported to be options related selling
and that could seem to allow the washout to extend. The market is also equally
negative toward cotton because of trade talks and because China backed away from
some Australian commitments that leaves more Australian cotton on the market. As
long as weather remains negative the bear camp looks to control prices.

Technical Outlook

#COTTON (OCT) 7/28/2004: A negative signal for
trend short-term was given on a close under the 9-bar moving average. The market
tilt is slightly negative with the close under the pivot. Next resistance area
comes in at 44.44 and then again at 44.97, while support is targeted at 43.44
and 42.97. Daily stochastics declining into oversold territory suggest the
selling may be drying up soon. The next downside objective is 42.97. More
downside action may be limited by the RSI under 20 putting the market in
extremely oversold territory. The market made a new contract low on the break.