Copper Mine Strike Looming?

Technical Outlook

#BONDS (SEP) 07/12/04: With the close higher than
the pivot swing number, the market is in a slightly bullish posture. Near-term
resistance for bonds is at 108.08 and then again at 108.12, while swing support
hits at 107.26 and below there at 107.16. The market’s close above the 9-day
moving average suggests the short-term trend remains positive. 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 107.16. The 9-day RSI over 70 indicates the market is approaching
overbought levels.

T-NOTES(SEP) 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 110.09. It is a mildly
bullish indicator that the market closed over the pivot swing number. Near-term
resistance for the T-Notes is at 110.24 and then again at 110.27, while swing
support hits at 110.15 and below there at 110.09. The market’s short-term trend
is positive on a close above the 9-day moving average. With a reading over 70,
the 9-day RSI is approaching overbought levels.

 

STOCK INDICES RECAP

7/9/2004

After the early rally the stock market failed to
extend the gains and by mid session had mostly fallen back to unchanged levels.
The fact that GE earnings came in slightly better than expected supported the
stronger opening but the market was given an added lift by favorable statements
made by the GE CEO. The GE CEO suggested that he is seeing the best conditions
in years! However, few longs wanted to stay long ahead of the weekend even with
the expectation that COT report released in the afternoon would show a
moderately short small spec and fund position.

Technical Outlook

#S&P500 (SEP) 07/12/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Underlying support
comes in at 1110.55 and 1107.63, with overhead resistance at 1115.85 and
1118.23. 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 1107.63.

S&P E-Mini (SEP): Daily stochastics declining
into oversold territory suggest the selling may be drying up soon. The next
downside objective is 1107.50. The market has a slightly positive tilt with the
close over the swing pivot. Near-term resistance for the S&P Mini is at 1116.00
and then again at 1118.50, while swing support hits at 1110.50 and below there
at 1107.50. A negative signal for trend short-term was given on a close under
the 9-bar moving average.

NASDAQ (SEP) The moving average crossover down (9
below 18) indicates a possible developing short-term downtrend. With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
The market should run into resistance at 1450.50 and above there at 1459.75 with
support at 1434.50 and 1427.75. Momentum studies are declining, but have fallen
to oversold levels. The next downside target is 1427.8.

MINI DOW (SEP) 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 10234 and above there at 10254 with support
at 10185 and 10156. Momentum studies are declining, but have fallen to oversold
levels. The next downside target is 10156. With the close higher than the pivot
swing number, the market is in a slightly bullish posture.

 

CURRENCY MARKET RECAP

7/9/2004

We are actually surprised that the Dollar held
steady for most of the session after a minimal early rally the sellers seemed to
come right back into the fray. The Canadian Dollar was upended by the slightly
disappointing Canadian payroll readings, while the Yen was lifted by the better
than expected election results. In short the Yen and Pound were the dominant
currencies with the Euro showing only minimal gains off the minor weakness in
the Dollar.

Technical Outlook

#CURRENCIES 07/12/04: YEN (SEP): The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The gap upmove on the day session chart is a bullish indicator for
trend. 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. Swing resistance is targeted at 92.80 and above there at 92.97, with
the yen finding support around 92.43 and below there at 92.23. Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The next
downside target is 92.23.

EURO (SEP): Momentum studies are trending higher,
but have entered overbought levels. The near-term upside objective is at 1.2430.
The market is in a bearish position with the close below the 2nd swing support
number. Swing support for the Euro comes in at 1.2342, with overhead resistance
at 1.2430. The market’s short-term trend is positive on a close above the 9-day
moving average. The gap down on the day session chart is bearish with more
selling pressure possible today.

 

PRECIOUS METALS RECAP

7/9/2004

While gold limped into the close the silver
market finished the week strong and within striking distance of the recent
highs. The Dollar was down again and that could have sparked better action inn
gold which appeared to be mostly overbought. The fact that Chinese demand for
nickel is causing severe shortages of that base metal might be indicating that
overall Chinese demand for all metals remains good. In short, the metals showed
enough strength this week to suggest that something significantly more
supportive is filtering into the market.

Technical Outlook

#P-METALS 07/12/04: SILVER (SEP): With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
Initial support for silver is at 641.0 and below there at 634.3 with resistance
likely at 648.6 and 654.0. 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 648.6. The 9-day RSI over 70 indicates the market is
approaching overbought levels.

GOLD (AUG): Support for gold today comes in near
405.88, while resistance is pegged at 409.68. Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
409.68. It is a mildly bullish indicator that the market closed over the pivot
swing number. The market’s short-term trend is positive on a close above the
9-day moving average.

 

COPPER MARKET RECAP

7/9/2004

The copper market ran aggressively higher Friday
and did so because the threat of a strike at an Asarco facility. The Asarco
facility supposedly had an output capacity of 150,000 tons. We also think that
copper was lifted by ideas that soaring nickel demand in China might also mean
that Chinese copper demand is expected to stay strong. In the end, the copper
market was boost by several factors and was mostly unaffected by the slightly
weaker than expected US economic report.

 

ENERGY MARKET RECAP

7/9/2004

Energy prices seemed to be a little exhausted and
that is understandable after the stellar gains posted Thursday. The fact that a
motar hit the Baghdad hotel and caused casualties only provided fleeting support
for prices. It seemed like the trade factored most of the weekend terrorism fear
into prices Thursday and therefore fresh longs were few in number. Supposedly
the Nigerian National Petrol Company was implementing a major restructuring in
an effort to boost refinery capacity and that might be seen as a longer term
negative. The most surprising development of the last two sessions is the fact
that natural gas prices remained weak despite recently strong crude price action
and much warmer US temps.

Technical Outlook

#ENERGIES 07/12/04: CRUDE OIL (AUG): The daily
closing price reversal down puts the market on the defensive. The market’s close
below the pivot swing number is a mildly negative setup. Support for crude is
keyed on 39.69 and below there at 39.53, with resistance pegged at 40.23 and
40.61. The market’s short-term trend is positive on a close above the 9-day
moving average. Momentum studies are trending higher, but have entered
overbought levels. The near-term upside objective is at 40.61.

UNLEADED GAS (AUG): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 135.20. With the close higher than the pivot swing number,
the market is in a slightly bullish posture. Resistance today is at 135.20,
while support should be found around 129.40. A new contract high was made on the
rally. The downside closing price reversal on the daily chart is somewhat
negative. 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 (AUG): The market’s close below the
pivot swing number is a mildly negative setup. Heating oil should encounter
support around 106.70, with resistance is at 110.30. The market’s short-term
trend is positive on a close above the 9-day moving average. Momentum studies
are trending higher, but have entered overbought levels. The near-term upside
objective is at 110.30.

 

CORN MARKET RECAP

7/9/2004

Trade was quiet ahead of the Supply/demand report
for Monday morning. Selling increased due to near perfect weather in the
forecast. Warm weather with hefty rains over the weekend is expected to be
followed by dry weather for early next week before more rain hits by later next
week. Pollination seems to be moving ahead with near ideal conditions. Weekly
export sales came in at 533,500 tons as compared with trade expectations of
650,000-850,000 tons. Old crop sales were 519,500 tons as compared with 542,100
tons necessary each week to reach the USDA projection. Cumulative sales have
reached 90.9% of the USDA forecast for the season as compared with 93.2% on
average for this time of the year. Traders look for production on Monday near
10.54 billion bushels with ending stocks near 940 million bushels which would be
up from 741 million projected last month. Deliveries this morning were 131 lots.
December corn support comes in at 251 1/2 and 249 with 255 1/2 and 256 3/4 as
resistance. December corn closed 10 3/4 cents lower on the week.

Technical Outlook

#CORN (DEC) 07/12/04: Daily stochastics are
trending lower, but have declined into oversold territory. The next downside
objective is now at 250 1/2. The market’s close below the pivot swing number is
a mildly negative setup. Market resistance comes in at 254 1/2 today, with
support at 250 1/2. The market’s short-term trend is negative as the close
remains below the 9-day moving average. With a reading under 20, the 9-day RSI
indicates the market is extremely oversold.

 

SOY COMPLEX RECAP

7/9/2004

The market experienced some short-covering ahead
of the USDA Supply/Demand report for release before the opening on Monday but
the market lacked follow-through buying after the early strength as the weather
forecast is still bearish and speculators are still in a long liquidation mode
for both old and new crop. The last trading session for July soybeans is on
Wednesday and there was an early range of 32 cents. Basis in central Illinois
jumped 25 cents to $1.65 over August yesterday which helped support early gains
in old crop. Weekly export sales came in at 52,900 tons as compared with trade
expectations of 0-75,000 tons. Old crop sales were 2500 tons as compared with
28,600 tons necessary each week to reach the USDA projection. Cumulative sales
have reached 99% of the USDA forecast for the season as compared with 100.8% on
average for this time of the year. Old crop meal sales were 24,700 tons as
compared with 11,400 tons necessary each week to reach the USDA projection.
Cumulative sales have reached 96.1% of the USDA forecast for the season as
compared with 89% on average for this time of the year. Traders were
disappointed with the lack of news from the USDA and the FDA in their joint news
briefing on mad cow. Traders were looking for new safeguards to protect
consumers against mad cow but the FDA indicated that new rules may not be
finalized until 2005 or 2006. New measures were thought to help boost meal
usage. Traders look for old crop ending stocks to be revised lower to near 107
million bushels as compared with 115 million last month due to higher than
expected crush pace. November soybean support comes in at 642 1/2 which is a 50%
retracement of the contract low to contract high. If this gives way, 605 1/2
becomes next key support. Resistance is at 652 1/2 and 656 1/2. November
soybeans closed 6 cents lower on the week while August soybeans closed 4 3/4
cents higher on the week.

Technical Outlook

#SOYBEANS (NOV) 07/12/04: The outside day down
and close below the previous day’s low is a negative signal. The downside
closing price reversal on the daily chart is somewhat negative. The swing
indicator gave a moderately negative reading with the close below the 1st
support number. The next area of resistance is around 655 1/2 and 668, while 1st
support hits today at 637 and below there at 631. The market’s close below the
9-day moving average is an indication the short-term trend remains negative.
Momentum studies are declining, but have fallen to oversold levels. The next
downside target is 631. Short-term indicators on the defensive. Consider selling
an intraday bounce.

MEAL (DEC): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
200.5. The daily closing price reversal down puts the market on the defensive.
First resistance comes in at 209.6, with support at 203.1. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. The market’s close below the pivot swing number is a mildly negative
setup.

BEAN OIL (DEC): The market’s close below the
9-day moving average is an indication the short-term trend remains negative.
Momentum studies are declining, but have fallen to oversold levels. The next
downside target is 22.11. It is a slightly negative indicator that the close was
lower than the pivot swing number. Daily swing resistance is found at 22.89 and
above there at 23.25. Support should be encountered at 22.32 and 22.11. The
9-day RSI under 30 indicates the market is approaching oversold levels.

 

WHEAT MARKET RECAP

7/9/2004

Solid export sales news and short-covering ahead
of the USDA Crop Production and Supply/Demand reports for Monday helped to
support the early bounce but weakness in the other grains helped trigger the
weakness into mid-session. Deliveries were 257 lots. Weekly export sales came in
at 551,500 tons as compared with trade expectations of 400,000-600,000 tons.
Cumulative sales have reached 30.3% of the USDA forecast for the season as
compared with 17.4% on average for this time of the year. China booked 8500 tons
for the week and shipped 52,500 tons. The average trade forecast for all wheat
production came in at 2.070 billion bushels (range 2.040-2.103) as compared with
the June forecast of 2.061 billion bushels and 2.337 billion last year. The
average trade forecast for winter wheat production came in at 1.503 billion
bushels (range 1.485-1.532) as compared with the June forecast of 1.531 billion
bushels and 1.707 billion last year. Ending stocks are expected to come in near
495 million bushels, unchanged from last months forecast but the range of
forecasts is 450 to 530 million. Ending stocks for the 2003/2004 season were 541
million bushels. Traders are hoping that the US will get some of the Jordon
business as credits are available. Support for September wheat comes in at 337
and 336 1/2 with 342 and 346 1/2 as resistance. September wheat closed 3 1/2
cents lower on the week.

Technical Outlook

#WHEAT (DEC) 07/12/04: Short-term indicators on
the defensive. Consider selling an intraday bounce. The swing indicator gave a
moderately negative reading with the close below the 1st support number. Look
for near-term support at 348 1/2 and below there at 347, with resistance levels
at 354 1/4 and 358 1/2. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative. The daily stochastics have
crossed over down which is a bearish indication. The next downside target is
347.

 

LIVE CATTLE RECAP

7/9/2004

August cattle closed 50 lower on the session and
down 122 on the week. October cattle closed 45 higher on the session and up 60
on the week. Traders remain concerned with the seasonal decline in beef demand
and prices into the heat of the summer and next weeks weather looks negative.
Cash markets traded at $86 on the week, down $2.00 on the week which was seen as
disappointing to the bulls who were looking for $90 cash markets at the start of
the week. Boxed-beef cut-out values were down .60 to $141.07 as compared with
$143.74 last week at this time. News that the FDA will not finalize beef feeding
rules until at least 2005 helped support the October cattle and feeder cattle.

Technical Outlook

#CATTLE (AUG) 07/12/04: Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
83.40. It is a slightly negative indicator that the close was lower than the
pivot swing number. Support should be encountered at 83.80 and below there at
83.40. Market resistance is at 84.80 and then again at 85.40. The market’s close
below the 9-day moving average is an indication the short-term trend remains
negative.

 

LEAN HOGS RECAP

7/9/2004

August hogs closed moderately higher on the
session following the improving near-term cash fundamentals. Packer profit
margins improved on the week due to higher pork values and steady to lower live
hog prices. This encouraged an increased slaughter pace and traders see the
declining weights as an indication that producers are current with marketings.
Next week, high temperatures and humidity could slow producer marketings and
could boost demand for bacon. The 2-day lean index for the period ending July
7th was down 7 cents to 79.28 as compared with 81.05 one week previous.

Technical Outlook

#HOGS (AUG) 07/12/04: With the close over the 1st
swing resistance number, the market is in a moderately positive position.
Resistance levels comes in at 76.65 and 76.92 today, while support is around
75.75 and then 75.12. The market’s short-term trend is positive on a close above
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 75.12.

 

COCOA MARKET RECAP

7/9/2004

The cocoa market finished slightly weaker and
managed to hold well over half of the big gains on the week. The Press suggested
that speculative demand for cocoa was drying. However, the market might find
some support from a new forecast calling for European cocoa demand to rise 3% to
6% in 2004. However, we see that demand figure as slightly disappointing as
production could easily climb by that amount. Apparently Germany is the strong
demand function within the European grind.

Technical Outlook

COCOA (SEP) 07/12/04 The market tilt is slightly
negative with the close under the pivot. Cocoa should run into resistance at
1440 and above there at 1460 with support at 1405 and 1390. Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The next
upside target is 1460.25.

 

COFFEE MARKET RECAP

7/9/2004

September coffee closed 95 points higher on the
session with a quiet inside trading session. The market ended down 130 points on
the week but there was some short-covering support due to the forecast for
colder weather next week in Brazil. While no frost damage is expected, the
colder air was seen as a possible threat for later this month. The London market
was well supported and provided some late in the week buying in New York.
Traders will monitor the weather maps closely on Monday morning.

Technical Outlook

COFFEE (SEP) 7/12/04 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 69.80. The Coffee contract should run into resistance at 71.45 and above
there at 71.90 with support at 70.4 and 69.80. The market’s short-term trend is
negative as the close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

7/9/2004

October sugar moved to new contract highs and
closed 11 higher on the session and up 30 from the lows of the day. The early
break was triggered by ideas that the market is overbought and that the COT
reports this afternoon will highlight the overbought condition, however, fund
and trade house buying surfaced on the early break which managed to fill the gap
left to start the week before the late surge higher. A Brazil holiday may have
kept commercial selling quiet. Taiwan bought 10,000 tons of white sugar after
the overnight tender for 20,000 tons. October sugar closed 31 higher on the
week.

Technical Outlook

#SUGAR (OCT) 07/12/04: The rally brought the
market to a new contract high. The upside closing price reversal on the daily
chart is somewhat bullish. With the close over the 1st swing resistance number,
the market is in a moderately positive position. Swing resistance comes in at
8.53, with support found at 7.87. The market’s short-term trend is positive on a
close above the 9-day moving average. Momentum studies are trending higher, but
have entered overbought levels. The near-term upside objective is at 8.53. With
a reading over 70, the 9-day RSI is approaching overbought levels.

 

COTTON MARKET RECAP

7/9/2004

The market continued to push lower and into new
contract lows to end the week as trader’s position for what looks to be negative
news in the USDA Supply/Demand report for Monday morning. While export sales
were solid, traders are concerned that the recent sharp break in cotton prices
and tighter credit in China could lead to cancellations ahead. Weekly export
sales came in at 372,300 bales as compared with trade expectations of
250,000-300,000 bales. Old crop sales were 221,900 bales as compared with
cancellations of 157,400 bales necessary each week to reach the USDA projection.
Cumulative sales have reached 106.1% of the USDA forecast for the season as
compared with 107.8% on average for this time of the year. Traders are looking
for US production near 17.9-18.4 million bales as compared with last months USDA
forecast of 17.6 million bales.

Technical Outlook

#COTTON (OCT) 07/12/04: 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. Next resistance area comes in at 48.10 and then again at 48.43,
while support is targeted at 47.60 and 47.43. Momentum studies are declining,
but have fallen to oversold levels. The next downside target is 47.43. The 9-day
RSI under 20 suggests the market is extremely oversold.