Here’s What The BP Refinery Fire Means For Gas Prices
BOND MARKET RECAP
3/24/2005
March Bonds finished up 0-07 at 110-05, 0-09 off
the high and 0-05 up from the low.
March 10 Yr Treasury Notes finished up 0-030 at
108-145, 0-060 off the high and 0-020 up from the low.
The Treasury market was justified in the
initial rally Thursday as the initial and ongoing claims figures showed a soft
economy and the durable goods report was mostly disappointing with a minimal
gain of +.3%. We also think that early strength in energy prices gave the bulls
confidence and probably prompted some additional short covering. However, the
overall view toward the economy and therefore the trend in the Treasuries is
anxiously awaiting evidence of where the energy complex is headed as that will
either add resistance to the US recovery or take some of the pressure off. The
COT report to be released on Friday March 25th is expected to show a massive
short spec position and that makes it difficult to be short, in the face of
disjointed US economic information.
Technical Outlook
BONDS (JUN) 03/28/2005: The daily stochastics
gave a bullish indicator with a crossover up. Rising from oversold levels, daily
momentum studies would support higher prices, especially on a close above
resistance. The major trend has turned down with the cross over back below the
18-day moving average. It is a mildly bullish indicator that the market closed
over the pivot swing number. The next upside objective is 110-20. The next area
of resistance is around 110-12 and 110-20, while 1st support hits today at
109-30 and below there at 109-23.
TNOTES (JUN) 03/28/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
market back below the 18-day moving average suggests the longer-term trend could
be turning down. The market has a slightly positive tilt with the close over the
swing pivot. The next downside objective is now at 108-065. The next area of
resistance is around 108-190 and 108-240, while 1st support hits today at
108-105 and below there at 108-065.
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STOCK INDICES RECAP
3/24/2005
March S&P finished up 0.9 at 1175.5, 8.7 off the
high and 0.7 up from the low.
March S&P E-Mini closed up 1 at 1175.5. This was
1 up from the low and 8.75 off the high.
March Dow closed down 2 at 10468. This was 6 up
from the low and 72 off the high.
The stock market was already showing signs of
short covering before the opening Thursday but managed to discount higher oil
prices and slack economic readings into the opening. Later in the session the
bull camp was treated to a much stronger US February new home sales reading and
that seemed to spark an additional wave of “potentially” fresh buying. The +9.4%
increase in February New Home sales sparked buying in the Home builders and
other related industries and probably helped the market ignore the mid session
recovery in energy prices.
Technical Outlook
S&P 500 (JUN) 03/28/2005: Momentum studies are
still bearish but are now at oversold levels and will tend to support reversal
action if it occurs. 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 1168.10. The 9-day RSI
under 30 indicates the market is approaching oversold levels. The next area of
resistance is around 1180.20 and 1186.90, while 1st support hits today at
1170.80 and below there at 1168.10.
SP EMINI (JUN) 03/28/2005: 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 has a
slightly positive tilt with the close over the swing pivot. The next downside
target is now at 1167.69. Some caution in pressing the downside is warranted
with the RSI under 30. The next area of resistance is around 1180.37 and
1187.18, while 1st support hits today at 1170.63 and below there at 1167.69.
NASDAQ (JUN) 03/28/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
close below the 18-day moving average is an indication the longer-term trend has
turned down. With the close higher than the pivot swing number, the market is in
a slightly bullish posture. The next downside objective is 1466.25. The next
area of resistance is around 1488.50 and 1500.25, while 1st support hits today
at 1471.50 and below there at 1466.25.
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CURRENCY MARKET RECAP
3/24/2005
March US Dollar finished up 10 at 8411, 5 off the
high and 37 up from the low.
March Euro finished down 0.24 at 129.8, 0.53 off
the high and 0.12 up from the low.
March Euro Dollar closed up 0.005 at 96.46. This
was 0.01 up from the low and 0.01 off the high.
March Canadian Dollar closed down 0.11 at 82.23.
This was 0.13 up from the low and 0.2 off the high.
March British Pound finished up 0.3 at 186.27,
0.38 off the high and 0.19 up from the low.
March Swiss closed down 0.19 at 83.77. This was
0.04 up from the low and 0.34 off the high.
March Japanese Yen closed down 0.27 at 94.69.
This was 0.22 up from the low and 0.13 off the high.
The US Dollar was saved by the New Home sales
rise, which followed a mostly disappointed sweep of US information early in the
action Thursday. However, we suspect that some currency players are a little
concerned that the US Durable Goods only gains +0.6% and that gasoline prices
are still showing the capacity to return to the recent highs. In the end, the
housing numbers appeared to be enough news to lift US stocks, which in turn
might facilitate the interest in the US Dollar. In short, the Dollar finished
the week in a mostly bullish posture.
Technical Outlook
YEN (JUN) 03/28/2005: 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. It is a slightly negative indicator that the close was under the swing
pivot. The next downside target is 94.32. The next area of resistance is around
94.86 and 95.01, while 1st support hits today at 94.52 and below there at 94.32.
EURO (JUN) 03/28/2005: The downside crossover (9
below 18) of the moving averages suggests a developing short-term downtrend.
Daily stochastics declining into oversold territory suggest the selling may be
drying up soon. The major trend has turned down with the cross over back below
the 18-day moving average. The market’s close below the pivot swing number is a
mildly negative setup. The next downside objective is 129.26. With a reading
under 30, the 9-day RSI is approaching oversold levels. The next area of
resistance is around 130.12 and 130.55, while 1st support hits today at 129.48
and below there at 129.26.
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PRECIOUS METALS RECAP
3/24/2005
April Gold closed down 0.6 at 424.8. This was 0.5
up from the low and 1.7 off the high.
March Silver finished down 0.047 at 6.938, 0.082
off the high and 0.023 up from the low.
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The gold and silver markets remained under a
liquidation watch on Thursday with the US Dollar mostly holding up around the
recent highs. While oil prices rose early and then again at mid session it would
still seem like high oil prices are holding back the US economy, In fact, if the
US new home sales readings hadn’t come out so strong the first set of economic
numbers from the US might have been enough to sink the Dollar and prompt profit
taking. However, with the February new home sales reading jumping up by 9.4% the
Dollar is given some support. In conclusion, the Dollar rise looks to continue
and that is negative for both gold and silver as that is the main ongoing focus
of the trade.
Technical Outlook
SILVER (MAY) 03/28/2005: 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 market
tilt is slightly negative with the close under the pivot. The next downside
objective is 684.8. Some caution in pressing the downside is warranted with the
RSI under 30. The next area of resistance is around 699.1 and 705.8, while 1st
support hits today at 688.6 and below there at 684.8.
GOLD (APR) 03/28/2005: The downside crossover (9
below 18) of the moving averages suggests a developing short-term downtrend.
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. It is a slightly negative indicator that the close was under the
swing pivot. The next downside objective is 422.9. The 9-day RSI under 30
indicates the market is approaching oversold levels. The next area of resistance
is around 425.9 and 427.3, while 1st support hits today at 423.7 and below there
at 422.9.
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COPPER MARKET RECAP
3/24/2005
March Copper closed up 0.90 at 145.35. This was
0.45 up from the low and 1.35 off the high.
The copper market posted some pretty impressive
action Thursday in the face of slack precious metals action and a slight rise in
the US Dollar. We suspect that the initial US economic report flow was
discouraging to copper but since the subsequent US new home sales reading was
very strong we suspect that outlook for demand was repaired from the early news.
We do think that some funds were interested buyers as the copper market is still
largely viewed as a bull market.
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ENERGY MARKET RECAP
3/24/2005
April Crude Oil closed up 1.03 at 54.84. This was
1.36 up from the low and 0.05 off the high.
April Heating Oil closed up 1.34 at 152.76. This
was 2.06 up from the low and 1.24 off the high.
April Unleaded Gas finished up 2.72 at 162.49,
0.46 off the high and 4.89 up from the low.
April Natural Gas finished down 0.07 at 7.18,
0.11 off the high and 0.11 up from the low.
April Propane closed down 0.01 at 0.88. This was
equal to the low and equal to the high.
The energy complex traded back and forth on
Thursday morning, starting out very firm off the Wednesday afternoon refinery
blast, falling back around mid morning and then recovering into mid session. It
seems like the BP refinery has the ability to get around the bottleneck that
might have been created by the blast and that would seem to discount the bullish
influence of the disaster. However, the market was reminded again how precarious
the US gasoline and product supply flow is. Later in the session the Press was
suggesting that the BP facility saw its 470,000 barrels per day gasoline output
reduced by about 5% or 23,500 barrels per day! In short, the loss is supportive
but maybe not enough cause to put prices all the way back up to the old highs.
Technical Outlook
CRUDE OIL (MAY) 03/28/2005: Momentum studies
trending lower at mid-range could accelerate a price break if support levels are
broken. The major trend has turned down with the cross over back below the
18-day moving average. With the close over the 1st swing resistance number, the
market is in a moderately positive position. The next downside target is now at
53.11. The next area of resistance is around 55.54 and 55.92, while 1st support
hits today at 54.14 and below there at 53.11.
UNLEADED (MAY) 03/28/2005: Momentum studies are
trending lower from high levels which should accelerate a move lower on a break
below the 1st swing support. The major trend could be turning up with the close
back above the 18-day moving average. A positive setup occurred with the close
over the 1st swing resistance. The next downside target is 156.04. With a
reading over 70, the 9-day RSI is approaching overbought levels. The next area
of resistance is around 165.16 and 166.73, while 1st support hits today at
159.82 and below there at 156.04.
HEATING OIL (MAY) 03/28/2005: Momentum studies
trending lower from overbought levels is a bearish indicator and would tend to
reinforce lower price action. The major trend could be turning up with the close
back above the 18-day moving average. The close over the pivot swing is a
somewhat positive setup. The next downside objective is 149.26. The next area of
resistance is around 154.40 and 155.85, while 1st support hits today at 151.11
and below there at 149.26.
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CORN MARKET RECAP
3/24/2005
May Corn finished down 1/4 at 210 1/2, 1/4
off the high and 1 1/4 up from the low. December Corn closed down 1/2 at 233
3/4. This was 1 up from the low and 1/4 off the high.
Strength in the other grains failed to even pull
corn even on the day until the lack of selling helped support the late bounce.
The market remained under pressure for much of the session for fear of excess US
stocks and fears that exports will be slow due to China competition on the world
market. However, export numbers have been above expectations for the second
session in a row. Weekly export sales for corn came in at 880,100 tons, which
was above the upper end of trade expectations. Old crop cumulative sales have
reached 68.4% of the USDA projection for the year as compared with 67.7% on
average for this time of the year. In addition, the USDA announced a sale of
115,000 tons of US corn to unknown destination. Resistance for May corn comes in
at 213 and 216 1/2 with support at 208 3/4 and 205.
Technical Outlook
CORN (MAY) 03/28/2005: 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 market’s close below the pivot
swing number is a mildly negative setup. The next downside target is 208 3/4.
The next area of resistance is around 211 1/4 and 211 3/4, while 1st support
hits today at 209 3/4 and below there at 208 3/4.
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SOY COMPLEX RECAP
3/24/2005
May Soybeans finished up 5 1/2 at 628 3/4, 3 3/4
off the high and 6 1/4 up from the low. November Soybeans closed up 1 1/2 at
604. This was 6 up from the low and 3 off the high.
May Soymeal closed up 3 at 188.4. This was 2.6 up
from the low and 0.6 off the high.
May Soybean Oil finished up 0.34 at 22.95, 0.13
off the high and 0.27 up from the low.
A lack of commercial selling and a firm cash tone
managed to support the market after the early break failed to attract new
selling interest. Demand reports this morning were not as strong as traders had
expected but not bearish enough to trigger much selling. In fact, the lack of
speculative long liquidation selling and ideas that the market has already
corrected the overbought condition with the sharp break of the past week helped
to provide support. The Census Bureau monthly crush report for February was
reported at 137.7 million bushels which was slightly below expectations as
compared with 148.5 million bushels in January. Oil stocks were pegged at 1.631
billion pounds which was also slightly above expectations at 1.621 billion and
meal stocks came in at 323,000 tons from expectations near 330,000 tonnes.
Weekly export sales for soybeans came in at 424,600 tons, which was below the
low end of trade expectations. Old crop cumulative sales have reached 94.1% of
the USDA projection for the year as compared with 89.4% on average for this time
of the year. Meal sales came in at 149,900 tons, better than expected.
Cumulative sales have reached 78.5% of the USDA projection for the year as
compared with 73.1% on average for this time of the year. Oil sales hit 1700
tons, which was below the low end of expectations. Gulf basis levels were a bit
higher due to a slowdown in producer selling. Short-term support for May
soybeans comes in at 623 and 617 1/4 with 631 1/2 and 643 1/2 as resistance.
Technical Outlook
BEANS (MAY) 03/28/2005: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The close under
the 18-day moving average indicates the longer-term trend could be turning down.
With the close higher than the pivot swing number, the market is in a slightly
bullish posture. The next downside objective is 618 1/4. The next area of
resistance is around 633 3/4 and 638, while 1st support hits today at 623 3/4
and below there at 618 1/4.
MEAL (MAY) 03/28/2005: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The close under
the 18-day moving average indicates the longer-term trend could be turning down.
With the close over the 1st swing resistance number, the market is in a
moderately positive position. The next downside objective is 184.7. The next
area of resistance is around 190.0 and 191.1, while 1st support hits today at
186.8 and below there at 184.7.
BEANOIL (MAY) 03/28/2005: 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 setup is supportive for early gains with the close over
the 1st swing resistance. The next downside objective is now at 22.52. The next
area of resistance is around 23.15 and 23.31, while 1st support hits today at
22.75 and below there at 22.52.
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WHEAT MARKET RECAP
3/24/2005
May Wheat finished up 1 3/4 at 338 1/2, 2 off the high and 3
up from the low. July Wheat closed up 1 1/4 at 347. This was 3 up from the low
and 1 1/2 off the high.
Good weather in the US and a weak export tone
kept buyers from being too active in the morning session but strength in the
soybean market managed to pull futures higher late in the day as the market
lacked much selling interest after the sharp break on the week. Ideas that the
break off of last week’s highs has the market in a short-term oversold condition
helped to provide some support. Weekly export sales for wheat came in at 365,100
tons, which was below the low end of trade expectations. Cumulative sales have
reached 89.2% of the USDA projection for the year as compared with 84.1% on
average for this time of the year. Ideas that French and Russian wheat prices
are more competitive on the world market as compared with US wheat helped to
keep a lid on the rally. South Korea bought 21,000 tonnes of US wheat overnight
and South Korea seeks 16,900 tons of US wheat. May wheat support comes in at 337
and 332 1/2 with resistance at 341 1/4 and 347 1/4.
Technical Outlook
WHEAT (MAY) 03/28/2005: Momentum studies trending
lower at mid-range should accelerate a move lower if support levels are taken
out. The close under the 18-day moving average indicates the longer-term trend
could be turning down. The close over the pivot swing is a somewhat positive
setup. The next downside target is 333 1/4. The next area of resistance is
around 341 and 343 1/4, while 1st support hits today at 336 and below there at
333 1/4.
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LIVE CATTLE RECAP
3/24/2005
April Live Cattle finished up 0.95 at 88.35, 0.17
off the high and 0.85 up from the low.
March Feeder Cattle closed up 0.02 at 106.35.
This was 0.05 up from the low and 0.05 off the high.
June cattle closed 62 higher on the session and
77 higher on the week as the weakness in the beef market failed to trigger
weakness in the cash cattle market as feedlots held off selling cattle at a
lower price on the week with no news about Canadian cattle being available to
packers soon. Cash cattle traded actively at $90.00 which was steady on the week
after packer bids jumped late in the morning. News that Taiwan was lifting the
ban on US beef in April and hopes that South Korea and Japan will be close
behind helped support. Boxed-beef cut-out values at mid-session were down $.75
to $150.20 as compared with $156.55 last week. Slaughter came in at 120,000 head
as compared with trade expectations at 115,000-119,000 head.
Technical Outlook
CATTLE (APR) 03/28/2005: The major trend could be
turning up with the close back above the 60-day moving average. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The major trend has turned down with the cross over back below the
18-day moving average. With the close over the 1st swing resistance number, the
market is in a moderately positive position. The next downside target is 87.170.
The next area of resistance is around 88.850 and 89.200, while 1st support hits
today at 87.850 and below there at 87.170.
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LEAN HOGS RECAP
3/24/2005
April Lean Hogs finished up 0.15 at 70.30, 0.37
off the high and 0.40 up from the low.
March Pork Bellies closed up 0.70 at 90.80. This
was 1.20 up from the low and equal to the high.
June hogs closed 2 ticks lower on the session and
down 130 on the week with choppy, two-sided trade ahead of the quarterly Hogs
and Pigs report for release this afternoon. The results of the report will set
the tone for the market for Monday and maybe for much of next week. Traders are
looking for All Hogs as of March 1st at 100.8% of last year (100-101.2 range),
Kept for Breeding Animals at 100.3% (99.7-101) and Kept for Market Animals at
100.7% (range 100-101). Slaughter came in at 391,000 head as compared with trade
expectations at 358,000-367,000 head. The 2-day lean index for the period ending
March 22nd came in at 68.51, down.26 on the session and down from 770.19 one
week previous.
Technical Outlook
HOGS (APR) 03/28/2005: 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. The
close over the pivot swing is a somewhat positive setup. The next downside
target is now at 69.520. The next area of resistance is around 70.670 and
71.050, while 1st support hits today at 69.920 and below there at 69.520.
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COCOA MARKET RECAP
3/24/2005
May Cocoa finished down 4 at 1584, 4 off the high
and 24 up from the low.
After another big downside probe the cocoa market
bounced off the lows as if to correct the temporary oversold status of prices.
We also think that prices bordering on $1,550 offer a lot more support than
prices above $1,700 and that is why the market rebounded. It is probably likely
the some shorts exited and that some commercial players bought cocoa, which
would suggest that the $1,560 level is a value zone. While the upcoming COT will
document some long liquidation it will certainly understate the long spec
position that will enter the action Monday morning and for that reason more
volatility is expected in the coming sessions.
Technical Outlook
COCOA (MAY) 03/28/2005: The downside crossover (9
below 18) of the moving averages suggests a developing short-term downtrend.
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. The market tilt is slightly negative with the close under the
pivot. The next downside target is 1551. The 9-day RSI under 30 indicates the
market is approaching oversold levels. The next area of resistance is around
1598 and 1607, while 1st support hits today at 1570 and below there at 1551.
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COFFEE MARKET RECAP
3/24/2005
May Coffee closed down 4.35 at 120.90. This was
1.15 up from the low and 4.60 off the high.
A massive additional washout in coffee probably
puts even more small spec and fund players in a position to dump longs. With
open interest recently sitting at 123,010 contracts and the last COT report
showing the net spec long to be 50,000 contracts it is not surprising that
significant chart failures result in even more significant price declines. With
less weather talk from Brazil and many commodity funds still favoring a
liquidative posture it is not surprised that the bottom fell out of the coffee
market but some traders are now suggesting that the July coffee contract has
little in the way of support until the 120 level.
Technical Outlook
COFFEE (MAY) 03/28/2005: The major trend has
turned down with the cross over back below the 40-day moving average. Momentum
studies trending lower at mid-range should accelerate a move lower if support
levels are taken out. 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 objective is
116.05. The next area of resistance is around 123.75 and 127.50, while 1st
support hits today at 118.05 and below there at 116.05.
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SUGAR MARKET RECAP
3/24/2005
May Sugar closed up 0.04 at 8.67. This was 0.03
up from the low and 0.09 off the high.
July sugar managed to close higher on the session
holding off a late break that pushed the market 7 points off of the highs as
London was struggling to hold onto gains. Tunisia bought 32,000 tonnes of white
sugar but the heavy speculative selling in the coffee pit and another weak day
for cocoa may have triggered some long liquidation selling late in the day for
sugar. July sugar lost 34 points on the week and speculators are holding a
massive net long position.
Technical Outlook
SUGAR (MAY) 03/28/2005: The downside crossover (9
below 18) of the moving averages suggests a developing short-term downtrend.
Momentum studies are still bearish but are now at oversold levels and will tend
to support reversal action if it occurs. The close under the 18-day moving
average indicates the longer-term trend could be turning down. With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
The next downside objective is now at 8.57. The next area of resistance is
around 8.72 and 8.80, while 1st support hits today at 8.61 and below there at
8.57.
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COTTON MARKET RECAP
3/24/2005
May Cotton finished up 1.01 at 51.59, 0.81 off
the high and 1.59 up from the low.
May cotton drove sharply higher on the session
and managed to push higher for the week as solid export sales news and continued
strong fund and speculative buying helped support. Some of the spec buying was
thought to be short-covering from small specs who have been trying to short the
market on this weeks recovering bounce. Weekly export sales for cotton came in
at 196,500 bales as compared with trade expectations at 100,000-150,000 bales.
Cumulative sales have reached just 87.3% of the USDA projection for the year as
compared with 94.4% on average for this time of the year. Export shipments,
however, hit a marketing year high which helped support the buying with exports
at 348,900 bales with traders looking for 250,000-350,000 bales. China was the
largest buyer for sales and shipments. The move over 51.10 for May cotton helps
improve the chart picture with 52.25 as next resistance.
Technical Outlook
COTTON (MAY) 03/28/2005: Momentum studies
trending lower at mid-range should accelerate a move lower if support levels are
taken out. The close under the 18-day moving average indicates the longer-term
trend could be turning down. The market setup is supportive for early gains with
the close over the 1st swing resistance. The next downside target is now at
49.00. The next area of resistance is around 52.79 and 53.79, while 1st support
hits today at 50.39 and below there at 49.00.