For Stocks, This Issue Is Front And Center

Technical Outlook

#BONDS (SEP) 06/15/04: The close below the 2nd
swing support number puts the market on the defensive. Near-term resistance for
bonds is at 103.13 and then again at 103.31, while swing support hits at 102.18
and below there at 102.09. 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
102.09.

T-NOTES(SEP) Daily stochastics are trending
lower, but have declined into oversold territory. The next downside objective is
now at 106.21. 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 107.09 and then
again at 107.19, while swing support hits at 106.26 and below there at 106.21.
The market’s short-term trend is negative as the close remains below the 9-day
moving average.

 

STOCK INDICES RECAP

6/14/2004

The stock market came under pressure from several
fronts on Monday. Not only was the market overbought from nearly a month of
gains but the trade was also beginning to fan the flames of concern over how
much the Fed might be prepared to move on interest rates. According to one Fed
member US interest rates might be set to accelerate faster than some investors
expect. In other words, the rate issue is once again front and center. Also
damaging sentiment were fears over domestic terrorism as the US released
evidence of a plan to bomb an Ohio Mall. With triple witching expiration looming
ahead and the US Trade deficit exploding investors simply had many reasons to
dump stocks in the action Monday.

Technical Outlook

#S&P500 (SEP) 06/15/04: The market is in a
bearish position with the close below the 2nd swing support number. The gap down
on the day session chart is bearish with more selling pressure possible today.
Underlying support comes in at 1120.90 and 1116.55, with overhead resistance at
1130.50 and 1135.75. The market’s short-term trend is negative as the close
remains below the 9-day moving average. 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 1116.55.

S&P E-Mini (SEP): 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 1112.69. 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 the S&P Mini is at 1133.13 and then
again at 1142.19, while swing support hits at 1118.38 and below there at
1112.69. A positive signal for trend short-term was given on a close over the
9-bar moving average.

NASDAQ (SEP) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. The close
below the 2nd swing support number puts the market on the defensive. The market
should run into resistance at 1475.50 and above there at 1485.75 with support at
1455.50 and 1445.75. 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 1445.8.

MINI DOW (SEP) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. The market should
run into resistance at 10363 and above there at 10404 with support at 10289 and
10256. The daily stochastics have crossed over down which is a bearish
indication. 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 10256. The close below the 2nd swing
support number puts the market on the defensive.

 

CURRENCY MARKET RECAP

6/14/2004

It has to be disappointing for the bull camp in
the Dollar that the stock market broke off the idea that US rates are going to
rise more than some expect, but yet the Dollar fell back from higher overnight
levels. Some might suggest that a soaring trade deficit undermined the Dollar
while other point to a softer than expected Kansas City Fed reading. However,
the currency markets are not keying directly off US economic numbers as the
retail sales gain in the US is a much more significant reading than the KC Fed
numbers. From a chart perspective the Pound and the Canadian look very negative
while the Euro seems to be holding its own against the Dollar.

Technical Outlook

#CURRENCIES 06/15/04: YEN (SEP): The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative. The gap lower price action on the day session chart is a
bearish indicator for trend. The close below the 2nd swing support number puts
the market on the defensive. Swing resistance is targeted at 90.56 and above
there at 90.90, with the yen finding support around 89.97 and below there at
89.72. The close under the 40-day moving average indicates the longer-term trend
could be turning down. The daily stochastics have crossed over down which is a
bearish indication. The next downside target is 89.72.

EURO (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 1.1938. The market is in a bearish position
with the close below the 2nd swing support number. Swing support for the Euro
comes in at 1.1938, with overhead resistance at 1.2128. The market’s short-term
trend is negative as the close remains below the 9-day moving average. The gap
down on the day session chart is bearish with more selling pressure possible
today.

 

PRECIOUS METALS RECAP

6/14/2004

The metals started out weak tried to bounce off
some interday Dollar weakness but then sagged again into mid session. While it
is still pretty clear that the Dollar is the main focal point for gold we have
to think that all the talk about rising interest rates is chasing some longs
from gold. For instance, around mid session Monday, with the Dollar 70 points
off its high of the day, the gold market remained soft partially because the
market were tossing around the talk that the Fed might be preparing for a series
of rate hikes. Surprisingly the gold market showed almost no reaction to the
news of a terrorist plot against a US shopping Mall.

Technical Outlook

#P-METALS 06/15/04: SILVER (SEP): The swing
indicator gave a moderately negative reading with the close below the 1st
support number. Initial support for silver is at 560.5 and below there at 555.7
with resistance likely at 571.7 and 575.0. 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 555.7. Short-term indicators on the defensive. Consider selling an
intraday bounce. The downside closing price reversal on the daily chart is
somewhat negative.

GOLD (AUG): Support for gold today comes in near
381.30, while resistance is pegged at 388.10. 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 381.30. Daily studies pointing down suggests
selling minor rallies. The market’s close below the 1st swing support number
suggests a moderately negative setup for today. The market’s short-term trend is
negative as the close remains below the 9-day moving average.

 

COPPER MARKET RECAP

6/14/2004

Copper prices were generally weak, which wasn’t
surprising given weaker US equity prices and lackluster Chinese copper market
action overnight. However copper could have been lifted by ongoing strength in
the US retail sales readings but many fear that the macro economic outlook is
set to deteriorate into the CPI report on Tuesday. Chinese concerns continue to
be the main driving force in the market and until the Chinese provide the market
with some direction in the form of renewed physical buying the bear camp looks
to control. The market also took recent comments from Fed members as a sign that
the US might be prepared to hike rates more than many expected.

 

ENERGY MARKET RECAP

6/14/2004

It is really surprising that the energy complex
started out weak and traded weak for most of the session, especially after the
weekend violence in Saudi Arabia. Another surprising development Monday was the
markets inability to rally in the wake of OPEC Statements that suggested they
might roll back the increased production in their August meeting. With strong
demand forecasts surfacing almost daily it is clear that OPEC will need to
maintain aggressive production just to meet surging demand. It was also clear
that unleaded prices were a little weaker than the rest of the complex and that
certainly shows a tempering of the bull sentiment seen for most of April and
May.

Technical Outlook

#ENERGIES 06/15/04: CRUDE OIL (AUG): The major
trend is down with the cross over back below the 40-day moving average. The
market’s close below the 1st swing support number suggests a moderately negative
setup for today. Support for crude is keyed on 37.46 and below there at 37.15,
with resistance pegged at 38.31 and 38.85. 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 37.15. Daily studies pointing down suggests selling minor
rallies.

UNLEADED GAS (AUG): Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
111.60. The swing indicator gave a moderately negative reading with the close
below the 1st support number. Resistance today is at 118.20, while support
should be found around 111.60. The market’s close below the 9-day moving average
is an indication the short-term trend remains negative. Short-term indicators on
the defensive. Consider selling an intraday bounce.

HEATING OIL (AUG): The market’s close below the
1st swing support number suggests a moderately negative setup for today. Heating
oil should encounter support around 97.13, with resistance is at 101.83. The
market’s short-term trend is negative as the close remains below 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 101.83.

 

CORN MARKET RECAP

6/14/2004

The surge higher in soybeans helped support the
market after the lower opening as the suspected jump in long liquidation selling
from fund traders did not materialize. In fact, by mid-session, funds were noted
buyers of near 4500 contracts. Traders expect tonight’s weekly crop progress
report to show that crops rated in good to excellent condition improved by 1-2%
in the past week from 68% posted last week. Fears that heavy rains in parts of
Iowa and northern India into Ohio over the weekend may have drowned-out some
additional acreage in low lying areas helped to provide some support as well.
Weekly export inspections came in at 33.9 million bushels as compared with trade
expectations at 35-40 million. Cumulative inspections have reached 1.443 billion
bushels as compared with 1.156 billion bushels last year at this time. Traders
believe that near 49 million bushels need to be exported each week to reach the
export projection for the season. Traders are also concerned that with all of
the trouble in Brazil regarding China soybean shipments, Brazil and Argentina
exporters may be more competitive on optional origin tenders over the near-term
and this has helped keep the demand tone weak. South Korea buyers booked 157,500
tons of optional origin corn overnight. Severe heat on the weekend in China was
seen as a potential bullish development but there is rain and cooler weather in
the forecast for the rest of this week. December corn support comes in at 292
and 287 1/2 with 297 and 301 1/2 as resistance.

Technical Outlook

#CORN (DEC) 06/15/04: 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 287 1/4. The market’s close above the
2nd swing resistance number is a bullish indication. Market resistance comes in
at 300 1/4 today, with support at 287 1/4. The market’s short-term trend is
negative as the close remains below the 9-day moving average.

 

SOY COMPLEX RECAP

6/14/2004

November soybeans challenged Thursday’s lows in
overnight trade and the higher close could signal that the market is beginning
to believe that more rains in the US are not necessarily more bearish to the new
crop outlook. Before the opening this morning, the NOPA pegged the May crush at
109.9 million bushels as compared with trade expectations at 106.0-106.5
million. With ending stocks for soybeans already pegged at a 27-year low, the
higher than expected crush pace was seen as bullish. Oil stocks were pegged at
1.194 billion pounds as compared with 1.215 billion last month and 1.575 billion
pounds last year. In addition, news that China banned more International trading
firms from moving Brazil soybeans into China was seen as a potentially bullish
factor for US soybeans “if” China happens to need soybeans soon which could be
sourced from the US. Global protein meal consumption is projected to increase 6%
for the 2004/2005 season with China consumption projected to swell 8%. Heavy
rains moving across the northern Illinois region this morning helped to provide
some support with traders starting to believe that more rain is not necessarily
more bearish. Weekly export inspections came in at 4.2 million bushels as
compared with trade expectations at 2-5 million. Cumulative inspections have
reached 813.7 million bushels as compared with 968.6 million bushels last year
at this time. Traders are looking for a slight improvement in crop conditions
for the weekly crop progress report for release this afternoon. Resistance for
November soybeans comes in at 685 and 694 1/2 with 669 and 661 as support
levels.

Technical Outlook

#SOYBEANS (NOV) 06/15/04: A positive setup
occurred with the close over the 1st swing resistance. The next area of
resistance is around 688 and 700, while 1st support hits today at 662 and below
there at 648. 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 648.

MEAL (DEC): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
202.6. First resistance comes in at 209.3, with support at 204.8. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. It is a mildly bullish indicator that the market closed over the pivot
swing number.

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 24.17. A positive setup occurred with the close over the 1st
swing resistance. Daily swing resistance is found at 25.00 and above there at
25.27. Support should be encountered at 24.45 and 24.17.

 

WHEAT MARKET RECAP

6/14/2004

The move under psychological support at 350
overnight to the lowest level since December 31st failed to generate new selling
interest when the other grains pushed higher early in the session. This helped
trigger some light short-covering. A lack of new export news over the weekend
and expected seasonal harvest selling pressures from commercials added to the
early bearish tone. However, crop condition concerns for the soft red winter
wheat crop in the mid-west if there is more rains early this week helped to
support the bounce to above Friday’s highs. Algeria bought 300,000 tons of
milling wheat from optional origin overnight. Weekly export inspections came in
at 15.27 million bushels as compared with trade expectations at 21-26 million.
Cumulative inspections have reached 29.3 million bushels for the new marketing
year as compared with 29.6 million bushels last year at this time. Traders await
crop condition reports and the Commitment-of-Traders reports for this afternoon.
World exports for the 2004/2005 season are pegged at 103.6 million tons which
was up 1.5 million from last months forecast but down from 107.26 million tons
last year and 108.5 million tons two years ago. Production from major exporters
excluding the US is projected to jump to 189 million tons from 168.5 million
last year which is the primary reason that the USDA lowered US exports for the
coming year by near 5 million tons to just 26.5 million tons. September wheat
support moves up to 360 with 374 1/2 and 379 1/4 as first resistance levels.

Technical Outlook

#WHEAT (DEC) 06/15/04: A positive setup occurred
with the close over the 1st swing resistance. Look for near-term support at 372
1/2 and below there at 368, with resistance levels at 380 1/2 and 384. 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 368.

 

LIVE CATTLE RECAP

6/14/2004

A drop in boxes beef prices Monday and outlook
for a lower cash trade since cash cattle only traded $90 per cwt last week broke
August cattle prices sharply lower in Monday’s session. Boxed beef cut-out vales
(for choice 600-750lbs) dropped $1.70 to $151.94 on Monday. The lower cash
cattle trade last week is expected to narrow packer profit margins to $4.85 per
head today, down from $15.25 from Friday.

Technical Outlook

#CATTLE (AUG) 06/15/04: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The next downside
target is 84.55. The swing indicator gave a moderately negative reading with the
close below the 1st support number. Short-term indicators on the defensive.
Consider selling an intraday bounce. Support should be encountered at 85.05 and
below there at 84.55. Market resistance is at 86.87 and then again at 88.20. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative.

 

LEAN HOGS RECAP

6/14/2004

Technical follow through buying from last week
and talk that some packing plants need more hogs to keep up with a projected
daily slaughter pace of 375,000 helped to support August hogs early. However,
profit taking pressured the market to close lower. Despite the weaker close, Aug
hogs holding above 75 keeps the market in a positive technical position. A 1
cent decline in pork cut-out vales for June 11th had little market impact and so
did an expected decline in packer profit margins Monday to $4.05 per head, down
from $5.30 last Thursday and $9.20 a week earlier. Cash hogs were mixed Monday
with Peoria up $1 and Iowa/Minn down $2.14. The 2-day lean index for June 10th
was 78.51, up 41 cents from the previous session.

Technical Outlook

#HOGS (AUG) 06/15/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Resistance levels
comes in at 76.67 and 77.40 today, while support is around 75.62 and then 75.30.
The daily closing price reversal down puts the market on the defensive. The
market’s short-term trend is negative as the close remains below the 9-day
moving average. 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 75.30.

 

COCOA MARKET RECAP

6/14/2004

The cocoa market gapped downward and seems to be
poised to track toward the lows. The fact that US cocoa imports were down 37%
from the prior month seemed to dominate over the fact that US cocoa imports for
April were up over 87% from last April. Since both London and New York cocoa
posted very poor chart action it is possible that more downside action is ahead
especially if tensions from the Ivory Coast remain under wraps. In short, the
bears don’t see a big change in cocoa market fundamentals and that is allowing
them to maintain control.

Technical Outlook

COCOA (SEP) 06/15/04 The gap lower price action
on the day session chart is a bearish indicator for trend. 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 1346 and above there at
1355 with support at 1331 and 1325. Momentum studies are declining, but have
fallen to oversold levels. The next downside target is 1325.25.

 

COFFEE MARKET RECAP

6/14/2004

With no cold air streams in sight for the coffee
growing regions in South America, September coffee fell sharply under the weight
of long speculative liquidation as traders exited positions put on prior to last
week’s long weekend. With US weather forecasters expecting good harvest
conditions for the next week, the market could see follow through selling in
Tuesday’s trade since market focus seems to be solely influenced by weather
conditions in Brazil. Last week’s late in the week rally likely kept fund
trader’s net long position around 20,000 contracts (tonight’s COT report was
taken before the market rallied sharply on Wednesday & Thursday), and this would
suggest more selling is possible this week.

Technical Outlook

COFFEE (SEP) 6/15/04 There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. 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 objective is now at 80.05. The Coffee contract
should run into resistance at 83.90 and above there at 86.05 with support at
80.9 and 80.05. The market’s short-term trend is negative as the close remains
below the 9-day moving average.

 

SUGAR MARKET RECAP

6/14/2004

Sugar prices were pressured by reports of a
higher than expected forecast for China’s 2003/04 sugar production. China’s
sugar harvest is now expected to produce 10.05 million tones vs an earlier
estimate of 9.8 million tones. The higher production forecast lowers trade
expectation that China could be a significant importer of sugar this season.
Rollo over activity out of the July contract and in to back month futures also
pressured the October contract. However, October sugar found support above 7.05
and with the Dollar turning weak and with purchases from Taiwan and expected
purchases from Libya, the market was able to cut losses by the close. A major
European trade house said Brazil’s central/south sugar harvest was running late
due to weather delays which caused them to lower their sugar cane crush estimate
by 15 million tones.

Technical Outlook

#SUGAR (OCT) 06/15/04: The market’s close below
the pivot swing number is a mildly negative setup. Swing resistance comes in at
7.28, with support found at 7.02. 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 7.02.

 

COTTON MARKET RECAP

6/14/2004

Continuing dry weather in Texas and a supportive
USDA supply/demand report along with solid export sales numbers last week were
not enough to take October cotton through solid resistance around 59.15. Filling
the gap at 57.50 left last week in Oct cotton keeps the trend down. The market
had become extremely over sold last week and looked to have found at least a
temporary bottom, but the lack of upside follow through Monday raises doubts
that last week’s low at 55.80 will hold. NY cotton certified stocks declined on
June 10th to 225,530 bales, down from 288,948 bales the previous day. There were
64,269 bales in decertifications.

Technical Outlook

#COTTON (OCT) 06/15/04: The market’s close below
the 9-day moving average is an indication the short-term trend remains negative.
The close below the 2nd swing support number puts the market on the defensive.
Next resistance area comes in at 58.35 and then again at 59.63, while support is
targeted at 56.65 and 56.23. 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 59.63. 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.