Here’s The Next Objective In The E-MInis
BOND MARKET RECAP
2/2/2005
March Bonds closed up 0-02 at 114-28. This was
0-10 up from the low and 0-05 off the high.
March 10 Yr Treasury Notes finished down 0-010 at
112-080, 0-040 off the high and 0-050 up from the low.
Once again the Treasury market showed
almost no reaction to economic developments. Early in the session the Treasury
market posted some minor declines in the wake of a stronger than expected
Challenger layoff survey. In other words, the bonds dipped slightly off signs
that January showed a 15% decline in layoffs versus December. The Treasury
market saw even less response to the news that the Federal Reserve hiked
interest rates by another 25 basis points but that minimal reaction is justified
by the fact that the Fed statement was almost identical to the prior months
reading. The Treasury market eventually managed to reject the early weakness,
even in the face of decent upside action in the equity market.
Technical Outlook
BONDS (MAR) 02/03/2005: Momentum studies are
trending higher but have entered overbought levels. The major trend could be
turning up with the close back above the 18-day moving average. The market has a
slightly positive tilt with the close over the swing pivot. The near-term upside
objective is at 115-10. The market is approaching overbought levels with an RSI
over 70. The next area of resistance is around 115-04 and 115-10, while 1st
support hits today at 114-22 and below there at 114-13.
TNOTES (MAR) 02/03/2005: Momentum studies are
trending higher but have entered overbought levels. The major trend could be
turning up with the close back above the 18-day moving average. The market tilt
is slightly negative with the close under the pivot. The next upside target is
112-165. The next area of resistance is around 112-120 and 112-165, while 1st
support hits today at 112-035 and below there at 111-310.
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STOCK INDICES RECAP
2/2/2005
March S&P finished up 4 at 1193.2, 2.8 off the
high and 4.1 up from the low.
March S&P E-Mini closed up 4 at 1193.25. This was
4.25 up from the low and 2.75 off the high.
March Dow closed up 43 at 10585. This was 50 up
from the low and 29 off the high.
The stock market was higher for most of the
session Wednesday and managed to stay positive up to and through the FOMC
meeting and a 1/4 percent rate hike. The stock market was helped to the gains
off the start by favorable Google earnings and off a better than expected
Challenger report. While the Challenger layoff report has been closely tied to
the results in the monthly payroll report some traders used the report Wednesday
to become a little more comfortable with the upcoming payroll readings. Seeing
slightly lower energy prices, talk of some possible troop reductions in Iraq and
the hope for a constructive State of the Union address also helped the bull camp
control the action Wednesday.
Technical Outlook
S&P 500 (MAR) 02/03/2005: The major trend could
be turning up with the close back above the 40-day moving average. Momentum
studies are rising from mid-range, which could accelerate a move higher if
resistance levels are penetrated. The cross over and close above the 18-day
moving average is an indication the longer-term trend has turned positive. It is
a mildly bullish indicator that the market closed over the pivot swing number.
The next upside objective is 1199.67. The next area of resistance is around
1196.45 and 1199.67, while 1st support hits today at 1189.55 and below there at
1185.88.
SP EMINI (MAR) 02/03/2005: The market now above
the 40-day moving average suggests the longer-term trend has turned up. Momentum
studies are rising from mid-range, which could accelerate a move higher if
resistance levels are penetrated. The market now above the 18-day moving average
suggests the longer-term trend has turned up. It is a mildly bullish indicator
that the market closed over the pivot swing number. The near-term upside
objective is at 1199.87. The next area of resistance is around 1196.75 and
1199.87, while 1st support hits today at 1189.75 and below there at 1185.88.
NASDAQ (MAR) 02/03/2005: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
close under the 18-day moving average indicates the longer-term trend could be
turning down. The daily closing price reversal down is a negative indicator for
prices. The market’s close below the pivot swing number is a mildly negative
setup. The near-term upside objective is at 1541.62. The next area of resistance
is around 1532.25 and 1541.62, while 1st support hits today at 1515.75 and below
there at 1508.63.
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CURRENCY MARKET RECAP
2/2/2005
March US Dollar finished up 8 at 8355, 18 off the
high and 28 up from the low.
March Euro finished down 0.16 at 130.46, 0.34 off
the high and 0.3 up from the low.
March Euro Dollar closed down 0.01 at 97.015.
This was equal to the low and 0.01 off the high.
March Canadian Dollar closed down 0.03 at 80.8.
This was 0.27 up from the low and 0.21 off the high.
March British Pound finished up 0.29 at 188.23,
0.21 off the high and 0.44 up from the low.
March Swiss closed down 0.14 at 84.09. This was
0.32 up from the low and 0.31 off the high.
March Japanese Yen closed down 0.19 at 96.63.
This was 0.33 up from the low and 0.28 off the high.
The Dollar showed fleeting upside action in the
wake of the stronger than expected Challenger report as layoffs declined in
January versus the prior month. However, the Dollar couldn’t hold the highs of
the day and even seemed to slide in the wake of the FOMC decision to hike
interest rates and that has to be disappointing to the bull camp in the Dollar.
It is possible that the Dollar bulls were disappointed that the Fed statement
wasn’t a little more optimistic about future growth but in the end the Dollar
just doesn’t seem to be building a case for sharply higher Dollar action.
Technical Outlook
YEN (MAR) 02/03/2005: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The major trend
has turned down with the cross over back below the 18-day moving average. 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. The next downside
target is now at 96.01. The next area of resistance is around 96.93 and 97.22,
while 1st support hits today at 96.33 and below there at 96.01.
EURO (MAR) 02/03/2005: The stochastics indicators
are rising from oversold levels, which is bullish and should support higher
prices. The major trend has turned down with the cross over back below the
18-day moving average. The market could take on a defensive posture with the
daily closing price reversal down. It is a slightly negative indicator that the
close was under the swing pivot. The near-term upside objective is at 131.10.
The next area of resistance is around 130.77 and 131.10, while 1st support hits
today at 130.14 and below there at 129.83.
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PRECIOUS METALS RECAP
2/2/2005
April Gold closed up 0.1 at 423. This was 1.1 up
from the low and 1.1 off the high.
March Silver finished up 0.02 at 6.75, 0.07 off
the high and 0.03 up from the low.
April Platinum closed down 5.6 at 873.3. This was
4.3 up from the low and 2.7 off the high.
The gold market initially showed some divergence
with silver but in the end both market managed to avoid the general bearish tilt
seen early despite the fact that the US Dollar was higher for most of the
session. In other words, the gold market managed to reject early weakness and
did so despite fundamentals that could have driven the Dollar sharply higher and
in turn could have prompted significant stop loss selling in gold. The trade was
certainly aware of the impending FOMC meeting decision and that could have
served to keep gold and silver in a tight trading range. With favorable action
in equities and slightly lower energy prices were would have expected the silver
market to benefit but it wasn’t inclined to make a statement in either
direction.
Technical Outlook
SILVER (MAR) 02/03/2005: Stochastics trending
lower at midrange will tend to reinforce a move lower especially if support
levels are taken out. The cross over and close above the 18-day moving average
indicates the longer-term trend has turned up. It is a mildly bullish indicator
that the market closed over the pivot swing number. The next downside target is
now at 666.1. The next area of resistance is around 680.0 and 686.0, while 1st
support hits today at 670.1 and below there at 666.1.
GOLD (APR) 02/03/2005: Stochastics trending lower
at midrange will tend to reinforce a move lower especially if support levels are
taken out. The close below the 18-day moving average is an indication the
longer-term trend has turned down. The close over the pivot swing is a somewhat
positive setup. The next downside objective is 420.8. The next area of
resistance is around 424.1 and 425.2, while 1st support hits today at 421.9 and
below there at 420.8.
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COPPER MARKET RECAP
2/2/2005
March Copper finished down 2.25 at 139.35, 2.55
off the high and 0.75 up from the low.
The copper market was down aggressive at times
Wednesday and could have violated a series of key points on the charts. In other
words copper prices were down enough that some small spec longs might be forced
out in the event that the market suffers additional near term losses. After a
rather surprising increase in daily LME copper stocks and a slight increase in
US interest rates we are not surprised that copper was under some pressure
Wednesday. We are also getting close to the Chinese holidays and that could
begin to reduce Asian trading activity in the copper market.
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ENERGY MARKET RECAP
2/2/2005
March Crude Oil closed down 0.43 at 46.69. This
was 0.24 up from the low and 0.86 off the high.
March Heating Oil closed down 1.69 at 129.70.
This was 0.30 up from the low and 3.80 off the high.
March Unleaded Gas finished down 2.10 at 129.35,
3.15 off the high and 0.65 up from the low.
March Natural Gas finished up 0.06 at 6.38, 0.10
off the high and 0.03 up from the low.
March Propane closed unchanged at 0.73. This was
equal to the low and 0.01 off the high.
The energy complex saw some early weakness and
added to that early weakness in the wake of the weekly inventory reports.
However, the weekly inventory reports was mostly offsetting with declines in
heating oil stocks offset by a moderate build in gasoline stocks. Even the crude
oil stocks data was conflicting as one measure rose and another declined. It is
also clear that weather remains negative at least into the middle of the coming
week and that probably prompted the trade to tilt the weekly inventory numbers
in favor of the bear camp. Surprisingly the natural gas market bucked the trend
in the regular energy complex and in the process seemed to climb toward critical
resistance on the charts.
Technical Outlook
CRUDE OIL (MAR) 02/03/2005: Momentum studies
trending lower at mid-range could accelerate a price break if support levels are
broken. The close below the 18-day moving average is an indication the
longer-term trend has turned down. The market’s close below the pivot swing
number is a mildly negative setup. The next downside target is now at 45.75. The
next area of resistance is around 47.23 and 47.94, while 1st support hits today
at 46.14 and below there at 45.75.
UNLEADED (MAR) 02/03/2005: Momentum studies
trending lower at mid-range should accelerate a move lower if support levels are
taken out. The close below the 18-day moving average is an indication the
longer-term trend has turned down. There could be some early pressure today
given the market’s negative setup with the close below the 2nd swing support.
The next downside target is now at 126.18. The next area of resistance is around
131.24 and 133.77, while 1st support hits today at 127.45 and below there at
126.18.
HEATING OIL (MAR) 02/03/2005: The market back
below the 60-day moving average suggests the longer-term trend could be turning
down. Momentum studies trending lower at mid-range could accelerate a price
break if support levels are broken. The close below the 18-day moving average is
an indication the longer-term trend has turned down. It is a slightly negative
indicator that the close was under the swing pivot. The next downside target is
126.48. The next area of resistance is around 131.75 and 134.67, while 1st
support hits today at 127.65 and below there at 126.48.
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CORN MARKET RECAP
2/2/2005
March Corn finished down 1 3/4 at 195 1/4,
1 off the high and 1/4 up from the low. May Corn closed down 1 1/2 at 203 1/4.
This was 1/2 up from the low and 3/4 off the high.
Good weather for the new crop in Argentina and a
lack of bullish demand news helped to trigger more aggressive speculative
selling today and a move to match previous contract lows for March, May and July
corn. July corn has a triple bottom at 210. Taiwan is tendering to buy
40,000-60,000 tons of US corn but Malaysia bought 60,000 tonnes of Argentina
corn which helped remind traders of export competition with Argentina and China.
Stats Canada pegged end of December stocks at 7.8 million tonnes, up 1.5% from
last year. For the weekly export sales report, released before the opening,
traders are looking for sales near 650,000-850,000 tons as compared with 762,800
tons last week. Support for March corn comes in at 194 and 191 with resistance
at 196 and 197 3/4.
Technical Outlook
CORN (MAR) 02/03/2005: The market made a new
contract low on the break. The daily stochastics have crossed over down which is
a bearish indication. Momentum studies are still bearish but are now at oversold
levels and will tend to support reversal action if it occurs. The market back
below the 18-day moving average suggests the longer-term trend could be turning
down. The gap down on the day session chart is bearish with more selling
pressure possible today. The defensive setup, with the close under the 2nd swing
support, could cause some early weakness. The next downside objective is now at
194 1/4. The next area of resistance is around 195 3/4 and 196 1/2, while 1st
support hits today at 194 3/4 and below there at 194 1/4.
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SOY COMPLEX RECAP
2/2/2005
March Soybeans finished down 1 3/4 at 505 1/4, 3
3/4 off the high and 1/4 up from the low. May Soybeans closed down 3/4 at 506
1/4. This was 3/4 up from the low and 3 1/4 off the high.
March Soymeal closed down 0.5 at 152.2. This was
0.4 up from the low and 0.6 off the high.
March Soybean Oil finished down 0.1 at 18.94,
0.21 off the high and 0.02 up from the low.
A lack of follow-through selling after moving to
new contract lows for March soybeans (505) helped to ease selling pressures
early in the session but weakness in the other grains and new contract lows in
oil helped drag the market to the lows near the close. The market seems oversold
but also has a lack of bullish input. Gulf CIF bids firmed this morning after
the sharp break yesterday which helped stabilize the market but South America
prices are cheaper and international buyers are turning south for March and
beyond needs. South Korea bought 53,000 tonnes of South American meal overnight.
Stats Canada pegged end of December stocks for soybeans at 2.1 million tonnes,
up 56.9% from last year with Canola stocks at 5.4 million tonnes, up 34.9%. For
the weekly export sales report, released before the opening, traders are looking
for soybean sales near 300,000-550,000 tons, meal sales near 50,000-100,000 tons
and oil sales near 5,000-10,000 tons. Resistance for March soybeans comes in at
507 and 509 with support at 505 and 501. The downside technical swing objective
on the move to new lows this week is 486 3/4.
Technical Outlook
BEANS (MAR) 02/03/2005: The market was pushed to
a new contract low. Momentum studies are still bearish but are now at oversold
levels and will tend to support reversal action if it occurs. The major trend
has turned down with the cross over back below the 18-day moving average. It is
a slightly negative indicator that the close was under the swing pivot. The next
downside target is now at 502 1/4. The next area of resistance is around 507 1/4
and 510, while 1st support hits today at 503 1/4 and below there at 502 1/4.
MEAL (MAR) 02/03/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
close under the 18-day moving average indicates the longer-term trend could be
turning down. The market’s close below the pivot swing number is a mildly
negative setup. The next downside target is 151.3. The next area of resistance
is around 152.7 and 153.2, while 1st support hits today at 151.7 and below there
at 151.3.
BEANOIL (MAR) 02/03/2005: The sell-off took the
market to a new contract low. Daily stochastics are trending lower but have
declined into oversold territory. The close under the 18-day moving average
indicates the longer-term trend could be turning down. It is a slightly negative
indicator that the close was under the swing pivot. The next downside target is
now at 18.76. The 9-day RSI under 30 indicates the market is approaching
oversold levels. The next area of resistance is around 19.05 and 19.21, while
1st support hits today at 18.83 and below there at 18.76.
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WHEAT MARKET RECAP
2/2/2005
March Wheat finished down 4 at 288 1/4, 3 1/4 off the high and
1/2 up from the low. May Wheat closed down 4 at 296 3/4. This was 3/4 up from
the low and 3 3/4 off the high.
The market saw increased selling after the lower
opening on a continued lack of bullish news and signs of hefty competition for
US exporters on the world market. March wheat came within 1/4 cent of contract
lows while July wheat hit contract lows. Stats Canada pegged end of December
wheat stocks at 20.9 million tonnes, up 16.7% from last year and up from
pre-report estimates for stocks near 20.4 million tons. In addition, Syria is
tendering to sell 100,000 tonnes of wheat on the world market. Weather looks
favorable to improving crop conditions in the west but the soft red crop
continues to see a freeze/thaw cycle which could stress growth early in the
spring. As long as Monday’s lows hold, the market is still operating under the
positive influence of the reversal but the weak close leaves the market
vulnerable to gap into new contract lows on the opening. For the weekly export
sales report, released before the opening, traders are looking for sales near
350,000-650,000 tons as compared with 437,500 tons last week. March wheat
support comes in at 287 1/2 and 284 1/2 with resistance at 292 1/4 and 296 3/4.
Technical Outlook
WHEAT (MAR) 02/03/2005: Momentum studies are
declining, but have fallen to oversold levels. The close under the 18-day moving
average indicates the longer-term trend could be turning down. The market is in
a bearish position with the close below the 2nd swing support number. The next
downside target is 285 1/4. The next area of resistance is around 290 and 292
1/2, while 1st support hits today at 286 1/2 and below there at 285 1/4.
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LIVE CATTLE RECAP
2/2/2005
April Live Cattle finished down 0.25 at 88.25,
0.50 off the high and 0.07 up from the low.
March Feeder Cattle closed down 0.97 at 99.95.
This was 0.15 up from the low and 1.35 off the high.
April cattle moved to the highest level since
January 19th before closing 25 lower on the session and down 50 from the highs
of the day. Continued hopes for higher cash trade this week due to muddy
feedlots and higher volume boxed-beef trade helped to support the early gains
but spillover pressure from the limit-down move in hogs helped pressure late.
Legal and political obstacles to plans to re-open the Canadian border to cattle
and beef trade on March 7th keep the supply outlook uncertain. Boxed-beef
cut-out values were up 14 cents into the mid-session to $143.17 as compared with
$148.62 last week at this time. Slaughter came in at 116,000 head versus trade
guesses ranging from 113,000 to 117,000.
Technical Outlook
CATTLE (FEB) 02/03/2005: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The major trend could be turning up with the close back
above the 18-day moving average. 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. The next upside target is 91.350. The next area of
resistance is around 91.000 and 91.350, while 1st support hits today at 90.400
and below there at 90.120.
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LEAN HOGS RECAP
2/2/2005
April Lean Hogs finished down 2.00 at 73.12, 1.60
off the high and equal to the low.
March Pork Bellies closed down 2.32 at 92.20.
This was 0.20 up from the low and 1.90 off the high.
April and February hogs closed limit down with
active fund long liquidation selling noted shortly after the lower opening.
Weakness in pork product prices, weak packer profit margins and weather which is
conducive to increased producer marketings helped to pressure the market.
Weakness in the cash market and thoughts of continued weakness this week added
to the bearish tone. There were 750 unfilled sell orders for April hogs into the
close. A bearish weekly cold storage report added to the negative tone. Weekly
average weights for Iowa/Minnesota for the week ending January 29th came in at
267.9 pounds as compared with 268.4 the previous week and 265.8 pounds last
year. Slaughter came in at 395,000 head versus trade guesses ranging from
392,000 to 395,000. The CME 2-day lean index for the period ending January 31st
came in 75.03, up 2 from the previous session and up from 73.96 one week
previous.
Technical Outlook
HOGS (FEB) 02/03/2005: Momentum studies are
declining, but have fallen to oversold levels. The market back below the 18-day
moving average suggests the longer-term trend could be turning down. The close
below the 2nd swing support number puts the market on the defensive. The next
downside target is 70.520. With a reading under 30, the 9-day RSI is approaching
oversold levels. The next area of resistance is around 72.350 and 73.450, while
1st support hits today at 70.900 and below there at 70.520.
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COCOA MARKET RECAP
2/2/2005
March Cocoa finished up 42 at 1603, 3 off the
high and 28 up from the low.
The cocoa market managed a very impressive upside
extension despite seeing a number of potentially negative news stories
overnight. In addition to the rebels welcoming a tightening of the UN arms
embargo in that country, the market also saw indications that recent rainfall
might have been just in time to mitigate a big impact on the mid crop. In yet
another negative note (or another negative that was totally ignored) were
suggestions that exporters at the Ivory Coast were revising upward their
expectations on the size of the arrivals. In the end the fund and small specs
wanted nothing of the potentially bearish news and in the process drove prices
to the highest level since mid December.
Technical Outlook
COCOA (MAR) 02/03/2005: The major trend could be
turning up with the close back above the 60-day moving average. Rising
stochastics at overbought levels warrant some caution for bulls. The cross over
and close above the 18-day moving average is an indication the longer-term trend
has turned positive. The gap upmove on the day session chart is a bullish
indicator for trend. The market has a bullish tilt coming into today’s trade
with the close above the 2nd swing resistance. The next upside objective is
1627. The next area of resistance is around 1618 and 1627, while 1st support
hits today at 1588 and below there at 1566.
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COFFEE MARKET RECAP
2/2/2005
March Coffee closed down 0.90 at 104.90. This was
0.10 up from the low and 1.80 off the high.
After an impressive probe into a new high for the
move the coffee market fell back as if it was technically overdone. The trade is
suggesting that a soaring Brazilian currency is deterring some cash market
activity in that country and that might impact the lower grades of coffee more
than others. The Press was certainly of a mind that the funds and specs were
once behind the gains in coffee and that would also suggest that the market is
building up its overbought spec long position.
Technical Outlook
COFFEE (MAR) 02/03/2005: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. The daily closing price
reversal down is a negative indicator for prices. It is a slightly negative
indicator that the close was lower than the pivot swing number. The near-term
upside objective is at 107.20. The next area of resistance is around 105.85 and
107.20, while 1st support hits today at 104.00 and below there at 103.45.
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SUGAR MARKET RECAP
2/2/2005
March Sugar closed down 0.14 at 8.81. This was
0.01 up from the low and 0.11 off the high.
March sugar closed 14 lower on the session and
down to the lowest close since January 17th. This leaves the market vulnerable
to increased selling if support levels are violated with speculators sitting on
an enormous net short position. Guatemala sugar exports are expected to jump to
1.7 million tonnes this season, up 13.3% from last year due to prospects for
record production. Surging world demand for sugar and ethanol helped support the
bull trend to the October and January peak but recent weakness in crude oil
market and some focus shift to the possibility of another bumper crop harvest in
center-south Brazil this spring helped to pressure. Traders are hopeful that
funds and speculators roll longs to May or July futures with near half of the
record open interest still in the March contract which expires at the end of the
month. Traders are also hopeful that international buyers such as Pakistan,
India and maybe Russia come in to extend coverage on the break.
Technical Outlook
SUGAR (MAR) 02/03/2005: The close below the
60-day moving average is an indication the longer-term trend has turned down.
Momentum studies trending lower at mid-range could accelerate a price break if
support levels are broken. The close below the 18-day moving average is an
indication the longer-term trend has turned down. The market is in a bearish
position with the close below the 2nd swing support number. The next downside
objective is now at 8.72. The next area of resistance is around 8.87 and 8.95,
while 1st support hits today at 8.75 and below there at 8.72.
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COTTON MARKET RECAP
2/2/2005
March Cotton finished up 0.39 at 44.27, 0.23 off
the high and 0.52 up from the low.
May cotton closed slightly higher for the third
session in a row with trade house buying and a lack of new fund selling helping
to support the minor gains. For the weekly export sales report, released before
the opening, traders are looking for sales near 280,000-350,000 bales as
compared with 285,300 bales last week. The market near-term fundamentals look to
have a bearish influence unless cotton sales begin to come in well above
expectations. The market faces a 3-5 week period ahead where new crop weather
news is non-existent and the focus of attention will be on the export sales pace
(which is still well behind the pace to reach the USDA projection), domestic
consumption (which is limited by surging China textile imports) and producer
cash activity (which can sometimes increased at this time of the year when
producers begin plans for the new crop season.
Technical Outlook
COTTON (MAR) 02/03/2005: The major trend could be
turning up with the close back above the 60-day moving average. Daily
stochastics are trending lower but have declined into oversold territory. The
market back below the 18-day moving average suggests the longer-term trend could
be turning down. It is a mildly bullish indicator that the market closed over
the pivot swing number. The next downside objective is now at 43.45. The next
area of resistance is around 44.64 and 44.94, while 1st support hits today at
43.90 and below there at 43.45.