Here’s What You Should Do With The Canadian Dollar Now

Technical Outlook

BONDS (MAR) 1/23/2004: The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Near-term resistance for bonds is at 113.18 and then again at 113.29, while swing support hits at 112.18 and below there at 111.29. A positive signal for trend short-term was given on a close over the 9-bar moving average. A bullish signal was given with an upside crossover of the daily stochastics. The next upside objective is 113.29. The market is approaching overbought levels with an RSI over 70.

T-NOTES(MAR) The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 115.09. 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 115.03 and then again at 115.09, while swing support hits at 114.15 and below there at 114.00. The market’s short-term trend is positive on a close above the 9-day moving average.

 

STOCK INDICES RECAP

1/22/2004

The stock market faltered in Thursday’s session and could be in for some trouble in the coming sessions, as US economic information has been unable to foster an extension of the optimism seen since the early December correction. Some disappointment over tech stock earnings pressured the Nasdaq. Microsoft earnings were generally expected to be favorable following the close and that tempered the selling interest. Ford motor posted some favorable earnings early in the session and that also served to countervail some disappointing earnings reports and a downgrade of Lucent stock.

Technical Outlook

S&P500 (MAR) 1/23/2004: The close over the pivot swing is a somewhat positive setup. The daily closing price reversal down is a negative indicator for prices. Underlying support comes in at 1139.80 and 1136.55, with overhead resistance at 1147.80 and 1152.55. The close above the 9-day moving average is a positive short-term indicator for trend. A crossover down in the daily stochastics is a bearish signal. Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The next downside objective is now at 1136.55. The market is becoming somewhat overbought now that the RSI is over 70.

S&P E-Mini (MAR): A new contract high was made on the rally. The downside closing price reversal on the daily chart is somewhat negative. 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 1136.81. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Near-term resistance for the S&P Mini is at 1147.63 and then again at 1152.31, while swing support hits at 1139.88 and below there at 1136.81. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The 9-day RSI over 70 indicates the market is approaching overbought levels.

NASDAQ (MAR) The market made a new contract high on the rally. The market could take on a defensive posture with the daily closing price reversal down. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market tilt is slightly negative with the close under the pivot. The market should run into resistance at 1548.25 and above there at 1565.88 with support at 1522.75 and 1514.88. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The next downside objective is 1514.88.

MINI DOW (MAR) The market rallied to a new contract high. The close above the 9-day moving average is a positive short-term indicator for trend. The market should run into resistance at 10651 and above there at 10675 with support at 10591 and 10555. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 10675. The close over the pivot swing is a somewhat positive setup.

 

CURRENCY MARKET RECAP

1/22/2004

The Dollar remained in a downward pulse but the trade is watching the 86.32 level closely as a close above that level could hint at a reversal. The US numbers were simply not strong enough to change any minds, on when the US Fed might be ready to raise interest rates and therefore money is uninterested in the US. We are very shocked that the Canadian Dollar behaved so poorly Thursday as it did not take advantage of the Dollar weakness and that could be pointing to upcoming weakness in the Canadian Dollar. However, the Pound and Euro both look to continue making the most of the Dollar weakness.

Technical Outlook

YEN (MAR): A positive signal for trend short-term was given on a close over the 9-bar moving average. If yesterday’s gap higher on the day session chart holds, additional buying could develop this session. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Swing resistance is targeted at 94.64 and above there at 94.85, with the yen finding support around 94.14 and below there at 93.85. A bullish signal was given with an upside crossover of the daily stochastics. The next upside objective is 94.85.

EURO (MAR): Momentum studies are rising from mid-range which could accelerate a move higher if resistance levels are penetrated. The near-term upside target is at 1.2762. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. Swing support for the Euro comes in at 1.2612, with overhead resistance at 1.2762. The downside crossover of the 9 & 18 bar moving average is a negative signal. More selling pressure is likely given yesterday’s gap lower price action on the day session chart.

 

PRECIOUS METALS RECAP

1/22/2004

The gold market really underperformed the silver market and it put in the poor performance in the face of a moderate decline in the Dollar. In other words, the mainstay of the bull camp, a weaker Dollar failed to rally prices and that could hint at upcoming weakness. The silver market apparently saw concentrated fund buying on a thin market conditions and that probably allowed the silver a bigger rally than would have ordinarily taken place. We think the action Thursday suggests that the gold market is giving up leadership to the silver market.

Technical Outlook

SILVER (MAR): The market setup is supportive for early gains with the close over the 1st swing resistance. Initial support for silver is at 622.8 and below there at 607.4 with resistance likely at 634.3 and 647.3. A negative signal for trend short-term was given on a close under the 9-bar moving average. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 607.4.

GOLD (APR): Support for gold today comes in near 406.60, while resistance is pegged at 416.60. Momentum studies are still bearish, but are now at oversold levels and will tend to support reversal action if it occurs. The next downside target is now at 406.60. It is a slightly negative indicator that the close was under the swing pivot. The downside crossover of the 9 & 18 bar moving average is a negative signal. The close below the 40-day moving average is an indication the longer-term trend is down. The daily closing price reversal down is a negative indicator for prices.

 

COPPER MARKET RECAP

1/22/2004

The copper market made periodic rallies during the session but did seem to be a little discouraged by the economic information. It would also seem like the Chinese holiday is beginning to temper the daily trading range and that could eventually rob the market of buying interest. The Copper seemed to get an early lift off Dollar weakness as that makes US copper cheap in the eyes of foreign buyers. The copper market also seemed to be tracking movement in the platinum and silver markets!

 

ENERGY MARKET RECAP

1/22/2004

The energy complex reacted strangely to a moderate decline in API crude stocks and a moderately large decline in distillate stocks. In other words, the market saw supportive inventory readings but failed to respond initially. Therefore, maybe the market is overbought and maybe the market is looking ahead to mild weather next week. Some traders have suggested that the outlook for prices is bullish but that prices around this week’s highs were simply just too expensive. With the distillate stock decline data it is clear that cold weather is pulling down supplies and that should limit the corrective capacity.

Technical Outlook

CRUDE OIL (MAR): The upside daily closing price reversal gives the market a bullish tilt. The close over the pivot swing is a somewhat positive setup. Support for crude is keyed on 34.33 and below there at 33.44, with resistance pegged at 35.53 and 35.84. The close above the 9-day moving average is a positive short-term indicator for trend. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 35.84.

UNLEADED GAS (MAR): Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 107.64. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Resistance today is at 107.64, while support should be found around 97.04. The outside day up is somewhat positive. The market made a new contract high on the rally. The daily closing price reversal up is a positive indicator that could support higher prices. A positive signal for trend short-term was given on a close over the 9-bar moving average.

HEATING OIL (MAR):The close over the pivot swing is a somewhat positive setup. Heating oil should encounter support around 95.26, with resistance is at 104.46. The close above the 9-day moving average is a positive short-term indicator for trend. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 104.46. The outside day up gives the market a positive tilt. The market rallied to a new contract high. The upside daily closing price reversal gives the market a bullish tilt.

 

CORN MARKET RECAP

1/22/2004

May corn closed lower for the first time since the January 12th stocks and supply/demand reports. Fund buying slowed to a trickle after the aggressive buying of the past two weeks. On the recent rally to contract highs, open interest has moved into new record high ground but the extreme overbought condition helped to slow the buying today. Traditional technical indicators are in extreme overbought territory after the recent buying binge and weakness in soybeans and wheat helped trigger some light long liquidation selling into the close. For the weekly export sales report, released before the opening, traders are looking for corn sales of 700,000-900,000 tons as compared with 839,300 tons last week.

Technical Outlook

CORN (MAR) 1/23/2004: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 279 1/4. It is a slightly negative indicator that the close was under the swing pivot. Market resistance comes in at 279 1/4 today, with support at 273 1/4. The close above the 9-day moving average is a positive short-term indicator for trend. The market is becoming somewhat overbought now that the RSI is over 70.

 

SOY COMPLEX RECAP

1/22/2004

Soybeans closed slightly lower in choppy, two-sided trade. Hopes that the FDA will extend the ban on feeding cattle remains to pork and poultry operators in the US continues to provide support to the meal market with March meal hitting a contract high and a new 6 1/2 year high for the nearby futures. Meal was also supported by the bitter cold forecast for next week which could increase meal usage. A weaker demand trend in Asia, especially China has been offset by growing concerns that the weather could remain hot and dry into next week. For the weekly export sales report, released before the opening, traders are looking for soybean sales of 400,000-600,000 tons, meal at 25,000-75,000 tons and oil sales of 2,000-7,000 tons.

Technical Outlook

SOYBEANS (MAR) 01/23/04 The market could take on a defensive posture with the daily closing price reversal down. The market has a slightly positive tilt with the close over the swing pivot. The next area of resistance is around 844 1/2 and 849 1/4, while 1st support hits today at 836 and below there at 832 1/4. The market’s close on the 9-day moving average is neutral. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The next downside objective is 832 1/4.

MEAL (MAR): Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 266.9. The market rallied to a new contract high. First resistance comes in at 265.0, with support at 261.8. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The market is becoming somewhat overbought now that the RSI is over 70.

BEAN OIL (MAR): A negative signal for trend short-term was given on a close under the 9-bar moving average. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 28.85. The swing indicator gave a moderately negative reading with the close below the 1st support number. Daily swing resistance is found at 29.41 and above there at 29.73. Support should be encountered at 28.97 and 28.85. Short-term indicators on the defensive. Consider selling an intraday bounce.

 

WHEAT MARKET RECAP

1/22/2004

March wheat closed 5 cents lower and near the low end of the recent consolidation as speculative long liquidation persists with a focus on increasing world production, especially in Europe and Eastern Europe offsetting the possible cold damage problems of the weather forecast for the plains. In fact, news that the EU sold 677,047 tonnes of wheat which had been held in intervention storage was the trigger for increased selling from the trade. The forecast for much below normal temperatures into the plains next week helped provide some support to new crop. For the weekly export sales report, released before the opening, traders are looking for wheat sales of 650,000-850,000 tons as compared with 494,800 tons last week.

Technical Outlook

WHEAT (MAR) 1/23/2004: Bearish daily studies indicate selling minor rallies this session. The close below the 1st swing support could weigh on the market. Expect near-term support around 382 1/4 and below there at 379 , with resistance levels at 391 1/2 and 397 1/2. A negative signal for trend short-term was given on a close under the 9-bar moving average. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 379 .

 

LIVE CATTLE RECAP

1/22/2004

February cattle was up more than 115 points on the day early but closed 7 lower on the session and down 77 from the opening. The reversal comes after a surge higher in the past week but a lack of progress on the export front and ideas that the pipeline will fill up quickly without exports helped shift the psychology a bit more negative. Boxed-beef cut-out values were up $1.58 to $146.79 as compared with $139.86 one week ago. April cattle also moved from higher to lower on the session. Feedlots are expected to price cattle near $90.00 next week as compared with most trades this week at the $85.00-$86.00 level. Weather and active featuring of beef has helped support the cash market rally. Ideas that it will weeks before Mexico lifts the export ban and even much longer for Japan added to the bearish tone.

Technical Outlook

CATTLE (APR) 1/23/2004: Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 77.97. The close below the 1st swing support could weigh on the market. Support should be encountered at 75.55 and below there at 74.97. Market resistance is at 77.05 and then again at 77.97. A positive signal for trend short-term was given on a close over the 9-bar moving average.

 

LEAN HOGS RECAP

1/22/2004

February hogs moved to the highest level since December 2nd before turning lower on the session and closing down 80 points. The reversal could attract some technical selling pressures on Friday. Cash markets were steady (not higher) and the sharp drop in loin values helped trigger more aggressive commercial selling. Pork cut-out values were down $1.36 to $60.26 as compared with $58.28 last week at this time. Ideas that the cash market could weaken next week as beef fills the pipeline helped trigger the sell-off. Weakness in the bellies was triggered by the monthly cold storage report. In addition to higher than expected bellies, total pork in cold storage hit a new 5-year high at 470.7 million pounds as compared with 438.9 million the previous month.

Technical Outlook

HOGS (APR) 1/23/2004: The market setup is somewhat negative with the close under the 1st swing support. Resistance levels comes in at 57.77 and 59.22 today, while support is around 55.57 and then 54.82. Short-term indicators on the defensive. Consider selling an intraday bounce. The close below the 9-day moving average is a negative short-term indicator for trend. A crossover down in the daily stochastics is a bearish signal. Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The next downside target is now at 54.82.

 

COCOA MARKET RECAP

1/22/2004

Cocoa prices exploded higher as the funds stepped up to buy ahead of the US grind stats that will be released Friday morning. If the small spec and funds are pulled back into the market cocoa might have the potential to return to the 1700 level but traders should keep in mind that prices are firming into anticipated supply flow. Maybe the market is picking up signs that the harvest is failing to live up to expectations.

Technical Outlook

COCOA (MAR)01/23/04 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. Cocoa should run into resistance at 1696 and above there at 1708 with support at 1660 and 1636. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 1707.50.

 

COFFEE MARKET RECAP

1/22/2004

After a lower opening, the market found solid buying support from fund traders and May futures closed 140 higher on the session. The market fell short of the contract highs at 77.50 and until this level is penetrated, the market remains under the negative technical influence of the reversal. Funds were noted buyers of near 3500 contracts and open interest jumped to a record high of 96,888 contracts, up 3590 on the session. CSCE exchange stocks were down 6,128 bags to 4.372 million with 79,334 bags pending review.

Technical Outlook

COFFEE (MAR)1/23/04 The daily closing price reversal up is positive. The market setup is supportive for early gains with the close over the 1st swing resistance. 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 near-term upside objective is at 77.45.The Coffee contract should run into resistance at 76.70 and above there at 77.45 with support at 74 and 72.05. The market’s short-term trend is positive on a close above the 9-day moving average.

 

SUGAR MARKET RECAP

1/22/2004

The market moved to a 5-day high as there is still residual buying from the technical reversal on January 16th and from increased activity in the cash market. Producer selling was noted from Brazil and Thailand on a scale up basis but the oversold condition and some pent-up demand is still giving the bulls a slight edge. Open interest is up sharply on the year and there is still most of the open interest in the March contract (140,900 of 254,539 total). With only 25 trading sessions left before March futures goes off of the board, sideways trade is unlikely in the weeks just ahead. Weaker cash prices in Brazil leave the world market as more attractive and could increase the selling pressure.

Technical Outlook

SUGAR (MAR) 1/23/2004: Market positioning is positive with the close over the 1st swing resistance. Swing resistance comes in at 5.91, with support found at 5.77. The close below the 9-day moving average is a negative short-term indicator for trend. Momentum studies are rising from mid-range which could accelerate a move higher if resistance levels are penetrated. The near-term upside target is at 5.91.

 

COTTON MARKET RECAP

1/22/2004

May cotton closed higher for the 5th session in a row with light speculative buying helping to support the gains. Weakness in the dollar helped provide support but cash dealers are aware that China buyers are likely on holiday until January 28th so increased China sales are unlikely. For the weekly export sales report, released before the opening, traders are looking for cotton sales of 130,000-180,000 bales as compared with 135,100 bales last week. Shipments are thought to be near 290,000-325,000 bales as compared with 293,600 bales last week. China has booked 3.246 million bales so far this year as compared with 648,000 last week at this time.

Technical Outlook

COTTON (MAR) 1/23/2004: A positive signal for trend short-term was given on a close over the 9-bar moving average. The market has a slightly positive tilt with the close over the swing pivot. Next resistance area comes in at 76.17 and then again at 76.39, while support is targeted at 75.47 and 74.99. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 76.39. ORANGE JUICE (MAR)1/23/04 The market tilt is slightly negative with the close under the pivot. Orange Juice should run into resistance at 63.10 and above there at 63.75 with support at 61.40 and 60.35. The market’s short-term trend is negative as the close remains below the 9-day moving average. The daily stochastics have crossed over down which is a bearish indication. The next downside objective is now at 60.35.