Here’s What’s Adding Impetus To Copper

Technical Outlook

BONDS (SEP) 09/04/03: It is a slightly negative
indicator that the close was lower than the pivot swing number. Near-term
resistance for bonds is at 106.04 and then again at 106.18, while swing support
hits at 105.11 and below there at 105.00. 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 105.00.

T-NOTES(SEP) Momentum studies trending lower at
mid-range should accelerate a move lower if support levels are taken out. The
next downside objective is now at 110.03. The market’s close below the pivot
swing number is a mildly negative setup. Near-term resistance for the T-Notes is
at 110.29 and then again at 111.01, while swing support hits at 110.14 and below
there at 110.03. The market’s short-term trend is negative as the close remains
below the 9-day moving average.

 

STOCK INDICES RECAP

9/3/03

With more new highs for the year the stock market
keeps a positive momentum pattern alive. While the US numbers weren’t negative
they certainly weren’t more fodder for the argument that the US recovery is
gathering momentum. The Fed Beige book was complementary but didn’t really fan
the flames of a recovery that was though to be self-perpetuating. Lastly, the
Fed Beige book suggested that economic activity picked up across all sectors but
was varied and that seemed to disappoint the trade. In any regard, it’s
difficult to be disappointed with more new highs for the year.

Technical Outlook

S&P500 (SEP) 09/04/03: It is a mildly bullish
indicator that the market closed over the pivot swing number. Underlying support
comes in at 1023.35 and 1018.93, with overhead resistance at 1030.85 and
1033.93. 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 1033.93. With a reading
over 70, the 9-day RSI is approaching overbought levels.

S&P E-Mini (SEP): Rising stochastics at
overbought levels warrant some caution for bulls. The next upside objective is
1036.06. The market has a slightly positive tilt with the close over the swing
pivot. Near-term resistance for the S&P Mini is at 1031.13 and then again at
1036.06, while swing support hits at 1012.88 and below there at 999.56. A
positive signal for trend short-term was given on a close over the 9-bar moving
average. The market is approaching overbought levels with an RSI over 70.

NASDAQ (SEP) A new contract high was made on the rally. The
downside closing price reversal on the daily chart is somewhat negative. The
market’s close above the 9-day moving average suggests the short-term trend
remains positive. With the close higher than the pivot swing number, the market
is in a slightly bullish posture. The market should run into resistance at
1372.25 and above there at 1384.88 with support at 1350.75 and 1341.88. 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 1384.9.

 

CURRENCY MARKET RECAP

9/3/03

Dollar action was dismal Wednesday as the market
priced in a good set of US numbers and then didn’t get fulfilled. One might have
expected the strong gains in the US equity market to bail out the Dollar but the
trade was content to bank profits. It is also possible that decent PMI readings
from the Euro zone and the UK served to tempered the favor toward the Dollar.
Even after the trade released favorable estimates for the Thursday morning US
reports the Dollar showed no sign of rekindling its upward pattern and that
hints at an over extended pattern.

Technical Outlook

YEN (SEP): The market’s close above the 9-day
moving average suggests the short-term trend remains positive. With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
Swing resistance is targeted at 86.41 and above there at 86.54, with the yen
finding support around 86.04 and below there at 85.80. Studies are showing
positive momentum, but are now in overbought territory so some caution is
warranted. The next upside target is 86.54. The 9-day RSI over 70 indicates the
market is approaching overbought levels.

EURO (SEP): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
1.0734. The market is in a bearish position with the close below the 2nd swing
support number. Swing support for the Euro comes in at 1.0734, with overhead
resistance at 1.0924. The market’s short-term trend is negative as the close
remains below the 9-day moving average. The major trend is down with the cross
over back below the 40-day moving average. With a reading under 30, the 9-day
RSI is approaching oversold levels. The gap down on the day session chart is
bearish with more selling pressure possible today.

 

PRECIOUS METALS RECAP

9/3/03

The World Bank predicted that gold prices would
fall below $300 an ounce in the medium term and that would seem to cap off the
incorrect pattern of gold opinions floated by most banks over the last three
years. Certainly gold is significantly overbought from a COT perspective and
from an open interest stance but it would not seem like prices are poised for a
massive capitulation. Considering that the Dollar slid back off its highs of the
day many thought that gold should have finished firmed. Certainly the equity
market action seemed to favor both gold and silver pricing during the hours that
those markets were open.

Technical Outlook

SILVER (DEC): With the close higher than the
pivot swing number, the market is in a slightly bullish posture. Initial support
for silver is at 503.3 and below there at 496.6 with resistance likely at 507.1
and 512.8. 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 496.6.

GOLD (DEC): Support for gold today comes in near
368.60, while resistance is pegged at 380.20. Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
380.20. The swing indicator gave a neutral reading since the market’s close was
equal to the pivot number. The market’s short-term trend is positive on a close
above the 9-day moving average. The upside closing price reversal on the daily
chart is somewhat bullish.

 

COPPER MARKET RECAP

9/3/03

The copper market managed another impressive
rally Wednesday but the magnitude of the gains this week has to put the market
in an extensively overbought technical condition. We would have thought that the
fundamental condition in copper deteriorated slightly with the muted
construction spending reading but since the US equity market mounted such
impressive mid day gains the copper was supported into its close. We also think
that expectations for more equity market gains gave the copper added impetus.
The trade did note a significant amount of fund buying in the session and that
should bring the funds into an overbought status.

 

ENERGY MARKET RECAP

9/3/03

The energy complex was mixed Wednesday with the
unleaded weak and the crude staying positive on the session. With the World Bank
calling on OPEC to increase production one does begin to see political pressure
on the cartel to increase production. Right now about the only true pressure
would be to see the IEA threaten OPEC with a release of buffer stocks. Some in
the trade think that OPEC is seeing significant internal pressure to expand
various quotas and that might also be seen as a negative. Countervailing the
bearish tilt is the idea that the inventory readings Thursday morning will show
more tightening in crude and gasoline stocks.

Technical Outlook

CRUDE OIL (OCT): The market was pushed to a new
contract low. The upside closing price reversal on the daily chart is somewhat
bullish. The market’s close below the pivot swing number is a mildly negative
setup. Support for crude is keyed on 29.23 and below there at 28.92, with
resistance pegged at 29.76 and 29.98. 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 28.92.

UNLEADED GAS (OCT): Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
81.67. It is a slightly negative indicator that the close was lower than the
pivot swing number. Resistance today is at 86.67, while support should be found
around 81.67. The market’s close below the 9-day moving average is an indication
the short-term trend remains negative.

HEATING OIL (OCT): The market’s close below the
pivot swing number is a mildly negative setup. Heating oil should encounter
support around 75.65, with resistance is at 79.05. 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 75.65. The upside closing price reversal on
the daily chart is somewhat bullish.

 

CORN MARKET RECAP

9/3/03

December corn closed sharply higher and
challenged the June highs as continued crop deterioration is expected this week
in the Iowa/minn region due to a lack of rain. Ending stocks were pegged at
1.184 billion bushels in the August USDA report and if US average yields drop
just 3 bushels/acre under that month’s forecast of 139.9 bushels/acre, ending
stocks would fall below 1 billion bushels and the US stocks/usage ratio would
fall to around 10%. The market has had to deal with a ratio this low only once
in the last twenty years and in that year (1995/96) corn prices reached all-time
highs. In the five weeks since July 27th, crop conditions have dropped from 69%
good to excellent to 46% for the week ending August 31st. Poor to very poor
ratings have moved from 10% to 25%, compared to a 13-year average of 12% for
this time of the year. A lack of deliveries and the firm cash market added to
the positive tone.

Technical Outlook

CORN (DEC) 09/04/03: Momentum studies are
trending higher, but have entered overbought levels. The near-term upside
objective is at 247 1/2. The market’s close above the 2nd swing resistance
number is a bullish indication. Market resistance comes in at 247 1/2 today,
with support at 239 . 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 gap up on the day session chart gave a bullish indicator
and more follow through could be seen this session.

 

SOY COMPLEX RECAP

9/3/03

The market moved sharply led by fears of a
continued drop in crop conditions for the coming week in Iowa and indications of
better demand from China. The lack of deliveries in meal and soybeans and the
lack of rain in the forecast for the western cornbelt added to the positive
tone. Crop estimates are beginning to trickle out on the floor with traders
looking for a revision lower of near 90-130 million bushels from last months
USDA production forecast. With ending stocks pegged at just 220 million in last
months report, downward revisions look necessary in demand and it may take
higher prices to discourage demand.

Technical Outlook

SOYBEANS (NOV) 09/04/03: A positive setup
occurred with the close over the 1st swing resistance. The next area of
resistance is around 584 1/2 and 588 , while 1st support hits today at 577 and
below there at 573 . The market’s close below the 9-day moving average is an
indication the short-term trend remains negative. 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
573 .

MEAL (DEC): Momentum studies trending lower at
mid-range should accelerate a move lower if support levels are taken out. The
next downside objective is now at 177.6. First resistance comes in at 181.1,
with support at 178.7. The market’s short-term trend is negative as the close
remains below the 9-day moving average. With the close over the 1st swing
resistance number, the market is in a moderately positive position.

BEAN OIL (DEC): 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 21.18. A positive setup occurred with
the close over the 1st swing resistance. Daily swing resistance is found at
21.05 and above there at 21.18. Support should be encountered at 20.66 and
20.40. The 9-day RSI over 70 indicates the market is approaching overbought
levels.

 

WHEAT MARKET RECAP

9/3/03

In spite of more bullish demand news and the
strength in the other grain markets, commercial selling from many firms helped
drive wheat nearly 6 cents lower on the session which leaves the December
contract on a test of last weeks lows. The market did not respond to news that
Egypt bought 120,000 tons of US wheat at their overnight tender for 60,000 tons
of optional origin wheat. In addition, the Ukraine Ag Minister indicated that
the wheat crop this year would be only 4 million tons from 20.5 million tons
last year which added to the early bullish tone. Commercial selling and
continued hefty deliveries with a lack of a commercial stopper were the primary
bearish forces.

Technical Outlook

WHEAT (DEC) 09/04/03: The close below the 2nd
swing support number puts the market on the defensive. Look for near-term
support at 368 and below there at 365 3/4, with resistance levels at 375 and 379
3/4. The market’s close below the 9-day moving average is an indication the
short-term trend remains negative. Momentum studies are declining, but have
fallen to oversold levels. The next downside target is 365 3/4.

 

LIVE CATTLE RECAP

9/3/03

December cattle closed limit-up at 82.87 and into
new contract highs as continued strength in the cash market and the boxed-beef
market is driving shorts out and attracting new technical and fundamental
buyers. In spite of the limit-up gains, December cattle is still at a
substantial premium to the cash market with cattle trading in the cash market at
$85.00 in the panhandle and 86 in Kansas. In addition, lighter-weight choice
boxed-beef prices were up $3.11 to $146.73 which is up more than $5 on the week
and helps packers rationalize the higher cash price.

Technical Outlook

CATTLE (OCT) 09/04/03: Studies are showing
positive momentum, but are now in overbought territory so some caution is
warranted. The next upside target is 85.85. Since the close was above the 2nd
swing resistance number, the market’s posture is bullish and could see more
upside follow-through early in the session. Support should be encountered at
84.15 and below there at 83.10. Market resistance is at 85.52 and then again at
85.85. A new contract high was made on the rally. 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.

 

LEAN HOGS RECAP

9/3/03

October hogs closed sharply higher on the session
and at the highest level since mid-July as surging cattle prices and news that
packers paid $1.00 in the cash market in hopes of a large Saturday slaughter
helped support. The technical action is bullish and some of the fundamental cash
news is beginning to improve as well. On top of the higher cash markets, the
USDA announced that the weekly average weights for the Iowa/Minnesota region for
the week ending August 3oth came in at 255.7 pounds, down 2.2 pounds from last
week and up just .20 pounds from last year. The data suggests that producers
have moved any excess hogs in the past ten days and are now quite current with
marketings. The Weekly cold storage report, released after the close, showed a
net out-movement of 2.365 million pounds as compared with trade estimates at
2.0-2.5 million so the news is neutral.

Technical Outlook

HOGS (OCT) 09/04/03: The market’s close above the
2nd swing resistance number is a bullish indication. Resistance levels comes in
at 56.27 and 56.60 today, while support is around 55.27 and then 54.60. 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 56.60. With a reading over 70, the 9-day RSI is
approaching overbought levels.

 

COCOA MARKET RECAP

9/3/03

A massive slide in cocoa prices has to throw the
bull camp off balance. With CSCE stocks climbing by 59,498 bags there is an
additional bit of negative supply news to throw on top of the technical failure.
While many traders think the action was simply profit taking we are seeing very
little in the way of supportive political headlines and not much in the way of
supportive weather dialogue. One would think that both the political and weather
situations would need to maintain a certain pitch in order to remain a factor.

Technical Outlook

COCOA (DEC)09/04/03 The gap lower price action on
the day session chart is a bearish indicator for trend. Could see some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. Cocoa should run into resistance at 1681 and above there at 1703
with support at 1645 and 1631. 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 1630.50.

 

COFFEE MARKET RECAP

9/3/03

December coffee closed slightly lower in range
bound trade. Traders await fresh demand news for the coming season and also are
anxious to see the weather developments in September which can significantly
impact the 2004/2005 crop in Brazil. A dry forecast for the next week in Brazil
helped provide some underlying support. CSCE exchange stocks were down 1464 bags
to 4.404 million bags with 39,589 bags pending review. Brazil exported near 1.53
million bags in August as compared with 2.65 million last year which was just
after the harvest of the record crop. The smaller crop this season and a put
options program which has slowed producer selling at harvest may be factors
which kept exports down.

Technical Outlook

COFFEE (DEC)9/4/03 The market tilt is slightly
negative with the close under the pivot. 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 64.30.The Coffee
contract should run into resistance at 63.80 and above there at 64.30 with
support at 63 and 62.70. The market’s short-term trend is positive on a close
above the 9-day moving average.

 

SUGAR MARKET RECAP

9/3/03

October sugar gapped lower and never recovered to
close 7 lower on the session and down 2 from the opening. The market continues
to probe for a price level where world end users might get more active. In
addition, the market is trying to absorb a hefty Brazil crop and a massive
increase in world ending stocks due to a surplus year for the 2002/2003 season.
October sugar closed down 126 points from the August highs and at the lowest
close since January 3rd. Failure to hold the June lows would leave 549 as next
technical downside objective for October Sugar.

Technical Outlook

SUGAR (OCT) 09/04/03: The gap lower price action
on the day session chart is a bearish indicator for trend. The market’s close
below the 1st swing support number suggests a moderately negative setup for
today. Swing resistance comes in at 6.22, with support found at 6.04. 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 6.04. With a reading
under 30, the 9-day RSI is approaching oversold levels.

 

COTTON MARKET RECAP

9/3/03

December cotton opened lower due to better than
expected crop ratings but closed slightly higher with a quiet inside trading
session. The lack of new selling interest on the break and more rains in the
delta and southeast for the next few days helped provide underlying support. The
continued drop in crop ratings in Texas added to the positive tone. More
potential problems with the cotton crop in China due to a powerful typhoon added
to the more positive tone in the long run as traders expect more China imports
if their own crop does not come in up to expectations.

Technical Outlook

COTTON (DEC) 09/04/03: The market’s close above
the 9-day moving average suggests the short-term trend remains positive. With
the close higher than the pivot swing number, the market is in a slightly
bullish posture. Next resistance area comes in at 59.82 and then again at 59.99,
while support is targeted at 59.22 and 58.79. Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 59.99.