Gold Traders Are Watching This Level For Selling Interest

Technical Outlook

BONDS (MAR) 12/11/03: It is a slightly negative indicator that the close was lower than the pivot swing number. Near-term resistance for bonds is at 108.14 and then again at 108.27, while swing support hits at 107.21 and below there at 107.09. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 107.09.

T-NOTES(MAR) The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 111.30. It is a mildly bullish indicator that the market closed over the pivot swing number. The major trend is down with the cross over back below the 40-day moving average. Near-term resistance for the T-Notes is at 111.24 and then again at 111.30, while swing support hits at 111.04 and below there at 110.22. The market’s short-term trend is positive on a close above the 9-day moving average.

STOCK INDICES RECAP

12/10/2003

At times the stock market showed signs of shaking off the profit taking tilt but since the headlines are offering little to the bull camp there is a fear that prices are set to slide further. In fact, with a retail sales report due out Thursday it is possible that many traders fear a reading on the pace of retail activity as the anecdotal evidence hasn’t been that impressive for the current holiday season. The bears seem to be able to control prices and unless the scheduled numbers alter that track more minor technical based declines might be seen.

Technical Outlook

S&P500 (DEC) 12/11/03: The market’s close below the pivot swing number is a mildly negative setup. The upside closing price reversal on the daily chart is somewhat bullish. Underlying support comes in at 1056.00 and 1049.50, with overhead resistance at 1066.00 and 1069.50. 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 1049.50.

S&P E-Mini (DEC): The daily closing price reversal up is a positive indicator that could support higher prices. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The next downside objective is 1049.50. The market tilt is slightly negative with the close under the pivot. Near-term resistance for the S&P Mini is at 1066.00 and then again at 1069.50, while swing support hits at 1056.00 and below there at 1049.50. A negative signal for trend short-term was given on a close under the 9-bar moving average.

NASDAQ (DEC) The daily closing price reversal up is positive. 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. The market should run into resistance at 1401.50 and above there at 1409.75 with support at 1378.50 and 1363.75. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 1363.8.

CURRENCY MARKET RECAP

12/10/2003

The Dollar made more than a fleeting attempt to rally Wednesday and at times managed to get back above some critical technical levels on the charts. The White House continues to promote the idea that China wants to see a floating exchange rate and that has the market confused. Some might suggest that a floating Chinese exchange rate is supportive to the Dollar, as the Dollar has managed to recoil off the recent lows following the Chinese developments. Intervention action by the BOJ probably helped the Dollar bounce but the trade is not sure how long the BOJ can manage the direction of the Yen.

Technical Outlook

YEN (DEC): 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 92.61 and above there at 92.86, with the yen finding support around 92.16 and below there at 91.96. 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 91.96.

EURO (DEC): 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 1.2157. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.2157, with overhead resistance at 1.2291. 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. The market’s key reversal down is a bearish signal. The rally brought the market to a new contract high. The gap down on the day session chart is bearish with more selling pressure possible today.

PRECIOUS METALS RECAP

12/10/2003

A major probe up in gold failed to hold as the gold market was undermined by the rise in the US Dollar off its early lows. In fact, many gold traders are watching the 89.25 level, as a point where more intense selling interest might be seen in gold. In other words, there is a rising fear that the down trend in the Dollar has come to an end. The silver market had an even more dramatic reversal move today and that could turn up the pressure on recent longs.

Technical Outlook

SILVER (MAR): It is a slightly negative indicator that the close was lower than the pivot swing number. Initial support for silver is at 555.8 and below there at 552.1 with resistance likely at 565.9 and 568.3. 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 565.9. A new contract high was made on the rally. The downside closing price reversal on the daily chart is somewhat negative.

GOLD (FEB): Support for gold today comes in near 401.65, while resistance is pegged at 415.25. 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 401.65. The market’s close below the pivot swing number is a mildly negative setup. The market’s short-term trend is positive on a close above the 9-day moving average. The rally brought the market to a new contract high. The daily closing price reversal down puts the market on the defensive.

COPPER MARKET RECAP

12/10/2003

The copper market managed to stay positive on the session despite what appeared to be a negative early setup. Some traders are wondering if the physical buyers have covered themselves ahead of the end of the year, which might promote a consolidation pattern in prices in the weeks ahead. However, the main driving force of the market will continue to be the overnight action in the Chinese market. The current consolidation is the longest consolidation since early November consolidation and it should be noted that copper prices managed an 8-cent washout following the November consolidation.

ENERGY MARKET RECAP

12/10/2003

The energy complex continues to get a mostly bullish spin from the weekly inventory reports as crude stocks declined by 8.9 million barrels at the API by and 6.4 million barrels at the DOE. However, the product stock increased again by a moderate amount and that countervails the bullish impact off the crude stock change. With both refinery-operating rates increasing, some traders might reason that the product prices might see price limitations on the upside. The fact that energy prices couldn’t maintain gains right after the inventory release confirms that the market has reached a partially overbought condition.

Technical Outlook

CRUDE OIL (JAN): The upside closing price reversal on the daily chart is somewhat bullish. It is a mildly bullish indicator that the market closed over the pivot swing number. Support for crude is keyed on 31.32 and below there at 30.84, with resistance pegged at 32.45 and 33.10. The market’s short-term trend is positive on a close above 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 33.10.

UNLEADED GAS (JAN): Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 89.49. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Resistance today is at 89.49, while support should be found around 84.09. The daily closing price reversal up is positive. The market’s close above the 9-day moving average suggests the short-term trend remains positive.

HEATING OIL (JAN): The market’s close below the pivot swing number is a mildly negative setup. Heating oil should encounter support around 85.37, with resistance is at 92.97. The market’s short-term trend is positive on a close above 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 92.97. The upside closing price reversal on the daily chart is somewhat bullish.

CORN MARKET RECAP

12/10/2003

Corn closed near unchanged on the session in spite of significant weakness in the other grains. Cash markets remain very strong and the December corn traded premium to the March contract which is a sign of solid demand in the cash market. Basis levels are firm and demand factors continue to point to a decline in the ending stock forecasts from the USDA in the months ahead. For the December report, released before the opening, the average trade estimate for ending stocks is at 1.282 billion bushels (range 1.2-1.324) as compared with 1.349 billion in the November supply/demand report. Weekly export sales, released before the opening, are expected to come in near 800,000-1.0 million tons as compared with 849,700 tons last week.

Technical Outlook

CORN (MAR) 12/11/03: Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 251 . The market’s close above the 2nd swing resistance number is a bullish indication. Market resistance comes in at 251 today, with support at 248 . The market’s short-term trend is positive on a close above the 9-day moving average.

SOY COMPLEX RECAP

12/10/2003

The soybean market closed slightly lower after the market recovered 8 cents off of the lows of the session into the close. Long liquidation pressured the market for much of the session as traders took profits ahead of the USDA report for release before the opening. The average trade estimate for ending stocks for Thursday mornings report came in at 117 million bushels (range 105-125) as compared with 125 million in the November supply/demand report. The estimates are at or below what many traders feel is a pipeline minimum for the end of the season. The trade remains optimistic that China will be a more active buyer in the weeks ahead. Oil moved to a new 5 1/2 year high and a contract high into the close. Weekly export sales, released before the opening, are expected to come in near 400,000-600,000 tons as compared with 255,100 tons last week. Meal sales are expected at 25,000-75,000 tons and oil sales at 3,000-8,000 tons.

Technical Outlook

SOYBEANS (JAN) 12/11/03: The downside closing price reversal on the daily chart is somewhat negative. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next area of resistance is around 791 and 796 , while 1st support hits today at 779 and below there at 772 . 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 796 .

MEAL (JAN): 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 236.8. The daily closing price reversal down puts the market on the defensive. First resistance comes in at 234.5, with support at 230.3. The market’s short-term trend is positive on a close above the 9-day moving average. The market’s close below the pivot swing number is a mildly negative setup. The major trend is down with the cross over back below the 40-day moving average.

BEAN OIL (JAN): 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 29.11. A positive setup occurred with the close over the 1st swing resistance. A new contract high was made on the rally. Daily swing resistance is found at 28.92 and above there at 29.11. Support should be encountered at 28.32 and 27.91. The 9-day RSI over 70 indicates the market is approaching overbought levels.

WHEAT MARKET RECAP

12/10/2003

Some rains in Kansas, higher production forecasts for French wheat and long liquidation selling ahead of the USDA Supply/Demand report helped pressure wheat. After a slightly lower opening, the market pushed moderately lower into the close with speculative selling as active. Weekly export sales, released before the opening, are expected to come in near 600,000-800,000 tons as compared with 891,700 tons last week. The average trade estimate for ending stocks for Thursday mornings report came in at 582 million bushels (range 557-600) as compared with 608 million in the November supply/demand report.

Technical Outlook

WHEAT (MAR) 12/11/03: 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 392 1/2 and below there at 387 , with resistance levels at 405 and 412 . 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 387 .

LIVE CATTLE RECAP

12/10/2003

February cattle closed 142 lower on the session with active long liquidation selling pounding the market lower from the start. The market bounced 110 points at mid-session but there was more selling into the close. December cattle closed limit down at 94.02 which leaves the market oversold and at a significant discount to the cash market but the near-term cash fundamentals are taking a back seat to long liquidation of a massive fund long position. Daily limits are expanded to 300 points for Thursday. Talk of increasing supplies of market-ready cattle and talk of Canadian cattle entering the US into early next year helped to pressure. Next weeks December 1st Cattle-on-Feed report is expected to show on-feed supplies near 103-106% for December 1st as compared with 103% last year. Cash cattle traded at $97 in the southern plains, down $3.00 from last year. Boxed-beef cut-out values were up 30 cents to $156.92.

Technical Outlook

CATTLE (FEB) 12/11/03: Momentum studies are declining, but have fallen to oversold levels. The next downside target is 87.77. The close below the 2nd swing support number puts the market on the defensive. Support should be encountered at 88.12 and below there at 87.77. Market resistance is at 89.30 and then again at 90.12. The gap lower price action on the day session chart is a bearish indicator for trend. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

LEAN HOGS RECAP

12/10/2003

Feb hogs were pulled lower by weak cattle prices and on-going fears that hog supplies will be higher than estimates going forward. While Feb hogs made a new contract low, prices spiked down and closed higher above the previous day’s close making for a key reversal action which may signal a low is in place. Fundamentally, we should be moving past the peak supply period for hogs which should begin to support futures. Daily slaughter came in at 385,000 head compared to estimates between 372,000 to 386,000 head and suggests strong packer demand. Upside follow through Thursday would be an indication at least a temp low is in place.

Technical Outlook

HOGS (FEB) 12/11/03: The market’s close below the pivot swing number is a mildly negative setup. Resistance levels comes in at 53.25 and 53.62 today, while support is around 52.15 and then 51.42. The market was pushed to a new contract low. The upside closing price reversal on the daily chart is somewhat bullish. 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 51.42.

COCOA MARKET RECAP

12/10/2003

After another probe sharply higher the cocoa market settled back below the prior days close. The trade was probably a little overdone technically and encountered more evidence that arrivals rates were rising slightly. We doubt that the market is going to be convinced quickly that supply is readily flowing and that there is no reason to keep prices at such lofty premiums. According to an end of November arrival measure from Dow Jones Ivory Coast arrivals are at 300,000 tons compared to 400,000 last year, which in our mind isn’t that significant of a differential when one considers that some cocoa might be exiting the country in atypical channels.

Technical Outlook

COCOA (MAR)12/11/03 The downside closing price reversal on the daily chart is somewhat negative. The market tilt is slightly negative with the close under the pivot. Cocoa should run into resistance at 1766 and above there at 1830 with support at 1661 and 1620. The 9-day RSI over 70 indicates the market is approaching overbought levels. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 1830.25.

COFFEE MARKET RECAP

12/10/2003

While higher internal coffee prices in Brazil helped to support March futures early in the session, coffee prices drifted down to close lower. Brazil’s government put program along with a small 2003/04 crop and a smaller than expected 2004/05 crop is improving the fundamental situation for the coffee market. News that Colombian exports last month were down 2% from a year ago did not provide enough support to prices. Funds are still likely net short despite the recent price run up and the market may now need fresh bullish news to take March coffee through 68.

Technical Outlook

COFFEE (MAR)12/11/03 The downside closing price reversal on the daily chart is somewhat negative. The market tilt is slightly negative with the close under the pivot. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The near-term upside objective is at 67.20.The Coffee contract should run into resistance at 66.25 and above there at 67.20 with support at 64.8 and 64.30. The market’s short-term trend is positive on a close above the 9-day moving average.

SUGAR MARKET RECAP

12/10/2003

The close back under 674 for March sugar leaves the market in a technically vulnerable situation and leaves the strong possibility that a near-term top is in place. Unless there is evidence soon of major buying from China, it may be tough for the market to hold on to recent gains. There is no production problems so far for the Brazil 2004 crop harvest and another bumper crop is in the forecast for now. End user buyers are experiencing sticker-shock after the recent surge in sugar prices and activity is very slow as the increase in the freight rates helps to magnify the rally. Producer selling was noted on the upside breakout and producer selling could increase if there is follow-through downside action in the days ahead.

Technical Outlook

SUGAR (MAR) 12/11/03: The daily closing price reversal down puts the market on the defensive. It is a mildly bullish indicator that the market closed over the pivot swing number. Swing resistance comes in at 6.83, with support found at 6.61. 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 6.83. With a reading over 70, the 9-day RSI is approaching overbought levels.

COTTON MARKET RECAP

12/10/2003

March cotton gave back all of its early gains to close weaker after being sharply higher. Position adjustments ahead of tomorrow’s USDA crop report weighed on the market as expectations for another large export sales report could not provide enough support to prices. The range of estimates for Thursday’s export sales are between 280,000 to 350,000 bales compared to 286,600 bales the previous week. Shipments are estimated between 200,000 and 250,000 bales compared to 138,700 bales the previous week. Chinese imports of US cotton have reached 2.959 million bales for the 2003/04 marketing year compared to 596,900 bales same time last year. The USDA attach‚ from India revised up the country’s cotton production for 2003/04 to 16.3 million bales.

Technical Outlook

COTTON (MAR) 12/11/03: The market’s close below the 9-day moving average is an indication the short-term trend remains negative. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Next resistance area comes in at 70.83 and then again at 72.34, while support is targeted at 68.79 and 68.26. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 68.26. The downside closing price reversal on the daily chart is somewhat negative. ORANGE JUICE (JAN)12/11/03 The close below the 1st swing support could weigh on the market. Orange Juice should run into resistance at 69.15 and above there at 69.60 with support at 68.50 and 68.30. The market’s short-term trend is negative as the close remains below the 9-day moving average. Daily stochastics are showing positive momentum from oversold levels which should reinforce a move higher if near-term resistance is taken out. The near-term upside objective is at 69.6.