Here’s What’s Grinding Coffee Down

Technical Outlook

BONDS (DEC) 09/16/03: The close equal to the
pivot swing number is a neutral directional indicator. Near-term resistance for
bonds is at 108.11 and then again at 108.27, while swing support hits at 107.07
and below there at 106.19. 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 108.27.

T-NOTES(DEC) Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
112.28. With the close over the 1st swing resistance number, the market is in a
moderately positive position. 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
112.18 and then again at 112.28, while swing support hits at 111.23 and below
there at 111.06. The market’s short-term trend is positive on a close above the
9-day moving average.

STOCK INDICES RECAP

9/15/2003

With the December S&P managing only a slight rise
above the high posted Friday and a subsequent setback it would seem that the
bull camp is losing buying interest at higher prices. We have to think that the
stock market was very disappointed with the US economic reports Monday but a
number of sellers might have held off on attacking the short side of the market
because of the upcoming FOMC meeting Tuesday. We really don’t think that the Fed
is poised to cut but those that are shorts have to be concerned about that
threat. Usually the stock market doesn’t perform well from a quasi consolidation
pattern. Some traders are also concerned that hurricane Isabel could make a
direct track over the eastern seaboard and that could be yet another macro
economic setback for the New York area.

Technical Outlook

S&P500 (DEC) 09/16/03: The market’s close below
the pivot swing number is a mildly negative setup. Underlying support comes in
at 1009.30 and 1007.25, with overhead resistance at 1015.70 and 1020.05. The
market’s short-term trend is negative as the close remains below the 9-day
moving average. Momentum studies are trending lower from high levels which
should accelerate a move lower on a break below the 1st swing support. The next
downside objective is now at 1007.25.

S&P E-Mini (DEC): Momentum studies trending lower
at mid-range could accelerate a price break if support levels are broken. The
next downside objective is 1001.13. The market has a slightly positive tilt with
the close over the swing pivot. Near-term resistance for the S&P Mini is at
1023.00 and then again at 1027.13, while swing support hits at 1010.00 and below
there at 1001.13. A negative signal for trend short-term was given on a close
under the 9-bar moving average.

NASDAQ (DEC) The downside closing price reversal on the daily
chart is somewhat negative. The market’s close below the 9-day moving average is
an indication the short-term trend remains negative. It is a slightly negative
indicator that the close was lower than the pivot swing number. The market
should run into resistance at 1359.75 and above there at 1372.88 with support at
1340.25 and 1333.88. Negative momentum studies in the neutral zone will tend to
reinforce lower price action. The next downside target is 1333.9.

CURRENCY MARKET RECAP

9/15/2003

About the most positive development for the
Dollar Monday is that it didn’t come under more pressure than it did. In fact,
the Dollar managed to hold above the Friday lows despite news that the US
economy was becoming even more flat footed than was documented in the last
monthly payroll report. With the broad reading of industrial production almost
showing no progress on the month the trade has to be concerned that the US
economy has lost momentum. In the wake of the deterioration of the outlook
toward the US economy the Euro seems to be the prime benefactor. In fact, only
the Euro and the Swiss managed to make positive gains against the Dollar during
its vulnerable posture.

Technical Outlook

YEN (DEC): The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. It is a
slightly negative indicator that the close was lower than the pivot swing
number. Swing resistance is targeted at 85.51 and above there at 85.65, with the
yen finding support around 85.23 and below there at 85.09. Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The next
downside target is 85.09.

EURO (DEC): Momentum studies are trending higher,
but have entered overbought levels. The near-term upside objective is at 1.1316.
The market is in a bearish position with the close below the 2nd swing support
number. Swing support for the Euro comes in at 1.1212, with overhead resistance
at 1.1316. The market’s short-term trend is positive on a close above the 9-day
moving average. The gap down on the day session chart is bearish with more
selling pressure possible today.

PRECIOUS METALS RECAP

9/15/2003

A failure on the charts is to be expected after
the market was forced to weather confirmation of that record spec and fund long
in gold and silver. However, we suspect that even more longs were disappointed
by the action Monday, as the Dollar was generally weaker, the stock market was
choppy and US numbers were soft. Some traders suggest that weakness in the stock
market, in an indirect fashion, negatively influenced gold futures, as selling
or profit taking in gold shares prompted fresh selling in gold futures. It is
also possible that the trade was just a little concerned about deflation,
considering the weakness in the US economic numbers released Monday morning. The
silver market also broke aggressive and violated key technical areas on the
charts, but then managed to recoil aggressively away from the session lows
before the close.

Technical Outlook

SILVER (DEC): It is a slightly negative indicator
that the close was lower than the pivot swing number. Initial support for silver
is at 514.5 and below there at 506.0 with resistance likely at 520.3 and 527.5.
The market’s close above the 9-day moving average suggests the short-term trend
remains positive. 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 506.0.

GOLD (DEC): Support for gold today comes in near
371.63, while resistance is pegged at 379.43. Momentum studies are trending
lower from high levels which should accelerate a move lower on a break below the
1st swing support. The next downside objective is now at 371.63. The market’s
close below the pivot swing number is a mildly negative setup. The market’s
short-term trend is negative as the close remains below the 9-day moving
average.

COPPER MARKET RECAP

9/15/2003

The copper market managed to respect the lows
posted last Friday and did well to avoid selling in the face of weak equity
prices and softer than expected US Industrial production readings. In fact, the
Industrial production numbers Monday morning typically have a more direct impact
on copper prices, which makes the upside action Monday all the more impressive.
Apparently the trade is confident that Chinese demand is going to remain strong
and that combines with strong world demand patterns to keep copper prices
positively biased. In the end, the copper market merely posted an inside day
higher, which in a sense mitigates the “higher-close” signal for the bull camp.

ENERGY MARKET RECAP

9/15/2003

Like a number of other markets, the crude oil
market managed to maintain its low above the low posted last Friday. Dampening
price action were reports of massive US oil imports in the month of July.
Russian oil imports into the US were reportedly the largest ever, while Saudi
Arabia remained the largest overall importer to the US at 1.835 million barrels
per day. The Russian import tally to the US was 479,000 barrels per day which is
significantly higher than historical levels as it isn’t usually cost effective
to ship oil from Russia to the US. The market also saw Press reports that
suggested some Iraqi oil is finding its way to the US, but as of yet there is
little statistical evidence of Iraqi supply having an influence on US supplies.
While some traders think that Isabel could disrupt shipments into New York
Harbor, the strength and direction of the storm was still up for grabs into the
close Monday. On the other hand, we have to think that the track of the storm is
becoming more negative toward natural gas as the odds of a track into the Gulf
are getting smaller with each passing hour.

Technical Outlook

CRUDE OIL (NOV): The market’s close below the
pivot swing number is a mildly negative setup. Support for crude is keyed on
27.98 and below there at 27.71, with resistance pegged at 28.53 and 28.81. 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 27.71. With a reading
under 30, the 9-day RSI is approaching oversold levels.

UNLEADED GAS (NOV): Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
79.21. With the close higher than the pivot swing number, the market is in a
slightly bullish posture. Resistance today is at 81.41, while support should be
found around 79.21. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative.

HEATING OIL (NOV): The market’s close below the
pivot swing number is a mildly negative setup. Heating oil should encounter
support around 74.42, with resistance is at 77.42. 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 74.42. With a reading under 30, the 9-day RSI
is approaching oversold levels. The daily closing price reversal down puts the
market on the defensive.

CORN MARKET RECAP

9/15/2003

Corn closed just 1 cent lower on the session but
active fund selling into mid-session had the market down more than 2 cents
before the slow-down in selling into the close. Higher wheat prices and solid
export inspection numbers provided some underlying support. Talk of high yields
into Illinois and fund selling kept pressure on today and the market will get
more crop information in tonight’s weekly crop progress reports which should
also show harvest progress. Weekly export inspections came in at 36.8 million
bushels from 23-28 million expected. Cumulative exports through September 11th
have reached 49.9 million bushels from 53.2 million posted at this time last
year.

Technical Outlook

CORN (DEC) 09/16/03: Daily stochastics are
trending lower, but have declined into oversold territory. The next downside
objective is now at 224 1/2. The market’s close below the pivot swing number is
a mildly negative setup. Market resistance comes in at 229 1/2 today, with
support at 224 1/2. 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.

SOY COMPLEX RECAP

9/15/2003

The soybean market closed lower on the session as
commercial and speculative long liquidation selling emerged after a steady
opening and after last weeks surge in prices due to bullish USDA data. November
soybeans closed 4 cents lower on the day with an inside trading session after
gaining 35 3/4 cents last week. Talk of season al weakness into the heart of the
harvest helped pressure the market while uncertainty on the crop size with more
deterioration in crops since September 1st provided underlying support. Weekly
export inspections came in at 5.15 million bushels from 5-8 million expected.
Cumulative exports through September 11th have reached 6.6 million bushels from
4.7 million posted at this time last year. Traders are looking for another 1-2%
drop in crops in good-to-excellent condition for tonight’s weekly crop progress
report.

Technical Outlook

SOYBEANS (NOV) 09/16/03: It is a slightly
negative indicator that the close was lower than the pivot swing number. The
next area of resistance is around 622 3/4 and 627 1/4, while 1st support hits
today at 615 and below there at 611 3/4. 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 627 1/4. The 9-day RSI over 70 indicates
the market is approaching overbought levels.

MEAL (DEC): The daily stochastic’s gave a bearish
indicator with a crossover down. The next downside objective is now at 184.9.
First resistance comes in at 189.5, with support at 186.1. The market’s
short-term trend is positive on a close above the 9-day moving average. The
market’s close below the 1st swing support number suggests a moderately negative
setup for today.

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 22.92. With the close higher than the
pivot swing number, the market is in a slightly bullish posture. Daily swing
resistance is found at 22.79 and above there at 22.92. Support should be
encountered at 22.32 and 21.98. The 9-day RSI over 70 indicates the market is
approaching overbought levels.

WHEAT MARKET RECAP

9/15/2003

The December wheat closed moderately higher on
the session more than 7 cents off of the lows of the session as improving
exports and signs of a slow-down in the active long liquidation trend of the
past several weeks helped support. On top of last weeks good export sales
totals, Egypt bought another 180,000 tons of US wheat on Monday and none from
France due to high prices which indicates that US prices are attracting good
demand. Active commercial selling in put options and ideas that the market is
oversold added to the positive tone. Weekly export inspections came in at 31.5
million bushels from 18-24 million expected. Cumulative exports through
September 11th have reached 309.8 million bushels from 269.5 million posted at
this time last year.

Technical Outlook

WHEAT (DEC) 09/16/03: With the close higher than
the pivot swing number, the market is in a slightly bullish posture. Look for
near-term support at 352 and below there at 346 1/2, with resistance levels at
360 and 362 1/2. 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 up which is a bullish indication. The next upside target is 362
1/2.

LIVE CATTLE RECAP

9/15/2003

October cattle opened higher and closed lower on
concerns that the demand for beef will decline soon due to higher prices and
that Canadian beef will eventually cushion the tight supplies. December cattle
closed 57 higher on the session and up 177 points from the lows of the session
as speculative long liquidation selling dried up near the lows and the 900 point
discount to the expected cash market this week helped provide some fundamental
support. Producers are pricing cattle at $92.00 this week with no bids yet.
Boxed-beef prices pushed to new all-time higher at $159.92, up 95 cents from
Friday and up near $10.00 from last week at this time.

Technical Outlook

CATTLE (DEC) 09/16/03: 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
81.85. With the close higher than the pivot swing number, the market is in a
slightly bullish posture. Support should be encountered at 83.27 and below there
at 81.85. Market resistance is at 85.47 and then again at 86.22. The daily
closing price reversal up is positive. The market’s close above the 9-day moving
average suggests the short-term trend remains positive.

LEAN HOGS RECAP

9/15/2003

October Hogs closed slightly higher with a wide
range and two-sided trade. The market opened 60 higher on strong gains in pork
cut-out values posted late Friday but weakness in cattle and a hefty pork
production expected for the coming week helped pressure. In addition, the
futures premium to the cash market added to the short-term sell-off. A recovery
in December cattle and strong gains in pork cut-out values and packer
profitability helped support. Slaughter came in at 385,000 head as compared with
380,000 last week and estimates at 38,000-382,000 as producer marketings are
picking-up after a $5.00 surge in cash prices since last week. Cash hogs were
steady to $1.00 higher at some locations and are called steady tomorrow.

Technical Outlook

HOGS (DEC) 09/16/03: The market’s close below the
pivot swing number is a mildly negative setup. Resistance levels comes in at
58.12 and 58.72 today, while support is around 56.87 and then 56.22. The upside
closing price reversal on the daily chart is somewhat bullish. The market’s
short-term trend is positive on a close above the 9-day moving average. Momentum
studies are trending lower from high levels which should accelerate a move lower
on a break below the 1st swing support. The next downside objective is now at
56.22.

COCOA MARKET RECAP

9/15/2003

The cocoa market managed to respect the lows
posted Friday around $1,479 to $1,481 and some traders are calling the action a
double bottom. However, the market might be finding some support from ideas that
excessive rains in Nigerian are resulting in Press reports of mold and that
could serve to tilt crop production estimates in a downward motion. Considering
the massive losses last week we have to assume that cocoa is finding some

support off short covering and profit taking. However, it would not seem like
the cocoa market will be able to shut off the September selling pattern without
encountering the July and August consolidation lows.

Technical Outlook

COCOA (DEC)09/16/03 The daily closing price
reversal up is positive. The market has a slightly positive tilt with the close
over the swing pivot. Cocoa should run into resistance at 1530 and above there
at 1541 with support at 1494 and 1469. Momentum studies are declining, but have
fallen to oversold levels. The next downside target is 1468.50.

COFFEE MARKET RECAP

9/15/2003

Heavy selling by the funds drove Dec coffee
sharply lower Monday. The commitment of traders with options showed that the
funds had become net long as of Sept 9th, and the weak close Friday perpetuated
the sell-off. News that Brazil’s coffee regions received some scattered rain
over the weekend and that more rain was expected this week before turning dry
again by the weekend turned the mood bearish. Brazil needed to stay dry the 2nd
half of September during the flowering period, which could have damaged the
crop. Next area of support is at 65 for Dec coffee then 64.

Technical Outlook

COFFEE (DEC)9/16/03 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. The daily stochastics have crossed over down which is a bearish
indication. The next downside objective is now at 63.00.The Coffee contract
should run into resistance at 67.60 and above there at 70.20 with support at 64
and 63.00. The market’s short-term trend is negative as the close remains below
the 9-day moving average.

SUGAR MARKET RECAP

9/15/2003

While Oct sugar is still trading sideways,
several failed attempts to break out up above 6.20 have failed and the market
now looks to be in a position to break lower. Key support is at 5.85 and a close
under there will put the market in a lower range that extends to 5.65. Ample
supplies, producer sales and slack demand make the path of least resistance
down. In other news, the Ukraine reported white sugar output at 601,601 tonnes
for the Jan-Aug period vs 223,527 tonnes same time period last year.

Technical Outlook

SUGAR (MAR) 09/16/03: The market is in a bearish
position with the close below the 2nd swing support number. Swing resistance
comes in at 6.39, with support found at 6.01. #NAME? #NAME?#NAME?#NAME?. #NAME?

COTTON MARKET RECAP

9/15/2003

Dec cotton ran in to some profit taking after
last week’s sharp rally off a bullish USDA world production report and concerns
over hurricane Isabel. Given last week’s rally, the correction in Dec cotton has
been shallow with good trade buying on dips. Now it looks like hurricane Isabel
will hit land around North Carolina which will affect less of the cotton crop
than if the hurricane hit land around Georgia. However, the path of the
hurricane is still uncertain, so until any actual damage to the cotton crop is
known, any further downside correction should be limited.

Technical Outlook

COTTON (DEC) 09/16/03: The market’s close above
the 9-day moving average suggests the short-term trend remains positive. It is a
slightly negative indicator that the close was lower than the pivot swing
number. Next resistance area comes in at 66.48 and then again at 67.04, while
support is targeted at 64.93 and 63.94. Studies are showing positive momentum,
but are now in overbought territory so some caution is warranted. The next
upside target is 67.04. The 9-day RSI over 70 indicates the market is
approaching overbought levels.