Futures Point To A Stronger Open
INTEREST RATES
OVERNIGHT
CHANGE to  4:15 AM :BONDS -6 The weekly COT report in bonds showed a massive
short spec position of nearly 39,000 contracts (as of last Tuesday) and since
then the market faded aggressively and then recovered. Therefore, the market is
moderately oversold but until the net short supercedes 50,000 contracts, the net
short position isn’t at a historical record. We do see the 106-00 level as a
support zone, especially since the US economic report slate is thin to start the
week.
STOCK INDICES
OVERNIGHT
CHANGE to 4:15 AM:S&P+260 DOW +11Â NIKKEI +123 FTSE +11Â It would seem like the
market is going to get a positive start to the week because of several favorable
earnings reports. However, the market needed the favorable fundamental lift
because the technical posture of the market following the breakdown last
Thursday and Friday, could have left the market in a compromised position.
Certainly, the surprise threat of terrorism seen last Friday morning, fostered
the selling wave and certainly took prices lower than they would have went on
their own accord.
FOREIGN EXCHANGE
EURO: A
much weaker Euro zone trade surplus suggests that the soaring Euro is having an
impact on import/export business and that would seem to be a drag on the
recovery effort. Therefore, we suspect that the Euro comes into the week in a
slightly vulnerable posture. However, support under the market looks significant
around 115.62 and therefore, the market probably won’t resume the downside
action unless the outlook toward the US recovery is upgraded aggressively by
events this week. Traders might buy the December Euro on a slide to 115.83 and
look to risk the position to 114.80.
YEN: A
massive range in the Yen overnight, with a lower result, would seem to suggest
that the BOJ has been involved in the market again. If the December Yen manages
a trade below 91.00, that could mean a quick slide back down to 90.70 but we
have to think that market forces will support the Yen at current levels and
forge a low soon. Because the APEC conference didn’t yield a hard verdict
against the Chinese currency, we don’t see the trade changing its bullish
opinion toward the Yen.Â
SWISS:
Critical support in the December Swiss comes in at 74.80 and the weakness in the
Euro seems to be keeping the Swiss under a liquidation watch. Unfortunately, the
Swiss has significant support under it about 40 points under the current market
and that makes short term sales unattractive.
POUND:
The Pound continues to have an upward bias. Not only has the market shown a
pattern of higher lows, but it would seem like the Pound is primed to forge a
new higher range in the coming week.
CANADIAN
DOLLAR: A very nice up trend channel is fleshed out on the charts in the
Canadian Dollar. As long as the daily action in the US Dollar avoids wild
swings, the Canadian can forge even more gains. The top of the channel in the
December Canadian comes in up at 76.70. +
METALS
GOLD: The
gold market enters the week in a partially damaged technical condition, with the
market probing to the lowest level in nearly two months before bouncing
slightly. Also the weekly COT report in the gold market showed a minor increase
in the spec long position, which puts the net spec long at 142,0000 contracts.
Therefore, the gold market continues to maintain an overbought condition.
SILVER:
The silver market has a real problem with the most recent increase in COMEX
stocks, as the new total of 113 million ounces is a level that really has to
discourage fresh longs. In fact, considering the sluggish action of both gold
and silver over the last 3 weeks, it is not a good combination to see rising
stocks and an ongoing large small spec and fund long position. Certainly silver
reduced its net spec position by 5,400 contracts in the recent COT report, but
the net long as of October 14th, was still lofty at 50,000 contracts.
PLATINUM:
The platinum market managed a gap higher probe overnight and would seem to be
prepared to test new high ground this week. However, seeing platinum rise
despite the lackluster performance in gold and silver, deflates the potential
bullishness slightly. Trend line support comes in today at $719.6, with
resistance seen up at $736.3 in the January contract. Â
COMMITMENT OF TRADERS ANALYSIS – FUTURES & OPTIONSÂ Oct 7 – Oct 14, 2003
    Â
         LARGE SPEC         COMMERCIAL          NON-REPORTABLE
                NET                 NET                  NET
           POSITION  NET CH   POSITION   NET CH   POSITION  NET CH
SILVERÂ Â Â Â Â Â Â Â Â 23194Â Â Â -3969Â Â Â Â Â -51408Â Â Â Â Â 5423Â Â Â Â Â Â 28214Â Â Â -1453
COPPERÂ Â Â Â Â Â Â Â Â 48142Â Â Â Â 8279Â Â Â Â Â -61109Â Â Â Â -7113Â Â Â Â Â Â 12967Â Â Â -1165
GOLDÂ Â Â Â Â Â Â Â Â Â Â 99662Â Â Â Â Â -26Â Â Â Â -142616Â Â Â Â Â -641Â Â Â Â Â Â 42954Â Â Â Â Â 667
PLATINUMÂ Â Â Â Â Â Â Â 5050Â Â Â Â -554Â Â Â Â Â Â -6398Â Â Â Â Â Â 310Â Â Â Â Â Â Â 1348Â Â Â Â Â 244
With LME
copper posting a 3 year high overnight, a positive tone is set for the US copper
session. However, the weekly COT report in COPPER: copper showed a net spec long
of 61,000 contracts and that is certainly a new modern day net spec long record.
With the bullish tilt toward copper so conclusive, the overly long spec position
probably won’t diffuse the upside but that large long will be a consideration if
the market begins to violate any significant support on the charts.
CRUDE COMPLEX
OVERNIGHT
CHG to    4:15 AM  :CRUDE -37 ,HEAT-99 ,UNGAS-94 The energy complex starts
the week out on a vulnerable note, with the most recent crude stock build
ringing in the ears of the market. However, the weekly COT report surprisingly
showed crude oil to be much longer in the fund category than expected, with the
funds adding in 47,041 contracts of longs in the five sessions leading up to the
October 14th mark off date.
NATURAL GAS
Given the
bearish revelations on supply in the regular energy complex and the continued
narrowing of the annual working storage deficit in natural gas we now think that
prices can fade even lower in the last two months trading range. With the
weather outlook pretty normal and the regular energy complex coming into the
recent washout a little longer than expected, the natural gas market remains
vulnerable.