Here’s Why Friday’s Report Is Key

Technical Outlook

BONDS (DEC) 11/14/2003: 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 110.20 and then again at 111.04, while swing support hits at 108.21 and below there at 107.06. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market now above the 40-day moving average suggests the longer-term trend is up. A bullish signal was given with an upside crossover of the daily stochastics. The next upside objective is 111.04.

T-NOTES(DEC) The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 113.19. The market’s close above the 2nd swing resistance number is a bullish indication. Near-term resistance for the T-Notes is at 113.08 and then again at 113.19, while swing support hits at 112.02 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

11/13/2003

While the Dec S&P traded sideways to lower, we are impressed with the market’s ability to hold up in the face of uninspiring economic news, a warning about the holiday retail sales outlook, a weaker dollar and sharply higher bond prices. The market held up well despite a disappointing earnings report and a cautious holiday sales forecast by Wal-Mart. A weak sales outlook by Wal-Mart raises doubts that a consumer buying lead economic recovery can be sustained. Stocks need a new bullish catalyst to draw investors back to the market. Weak economic numbers in Friday’s report could spark a wave of profit taking ahead of the weekend.

Technical Outlook

S&P500 (DEC) 11/14/2003: The close over the pivot swing is a somewhat positive setup. Underlying support comes in at 1054.30 and 1049.50, with overhead resistance at 1061.70 and 1064.30. 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 objective is at 1064.30.

S&P E-Mini (DEC): A new contract high was made on the rally. A bullish signal was given with an upside crossover of the daily stochastics. The next upside target is 1065.25. 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 1062.50 and then again at 1065.25, while swing support hits at 1054.50 and below there at 1049.25. The market’s close above the 9-day moving average suggests the short-term trend remains positive.

NASDAQ (DEC) 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. The market should run into resistance at 1446.50 and above there at 1452.25 with support at 1432.50 and 1424.25. The daily stochastics have crossed over up which is a bullish indication. The next upside objective is 1452.25.

CURRENCY MARKET RECAP

11/13/2003

Broad based selling continued to thrust the dollar lower with December closing back below 92 and headed for a test of the October lows. Sentiment remains decided bearish toward the Dollar and today’s economic reports did not help to reverse those feelings. A widening trade deficit, the Fed unlikely to raise, escalation terrorist attacks and economic data still leaving the market with doubts regarding the strength of the US recovery are the main factor damaging the dollar. Minor supportive economic data in the Euro-zone carrying more weight than major supportive economic data in the US means the path of least resistance for the dollar remains down.

Technical Outlook

YEN (DEC): A positive signal for trend short-term was given on a close over the 9-bar moving average. The market setup is supportive for early gains with the close over the 1st swing resistance. Swing resistance is targeted at 92.73 and above there at 92.87, with the yen finding support around 92.34 and below there at 92.09. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 92.87. Daily studies suggest buying dips today.

EURO (DEC): 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 1.1776. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. Swing support for the Euro comes in at 1.1642, with overhead resistance at 1.1776. The close above the 9-day moving average is a positive short-term indicator for trend. More selling pressure is likely given yesterday’s gap lower price action on the day session chart.

PRECIOUS METALS RECAP

11/13/2003

The gold market took a breather from the recent torrid uptrend in price action as the Feb contract run into profit taking just below $400. February gold should find solid support between $390 and $386, as the outlook for gold remains solidly bullish. Rising tensions in the Middle East, physical demand from Asia, the US Fed indicating that interest rates will stay low and no sign of a bottom in the dollar are all ingredients for higher gold prices. We still project Feb gold will test $415.

Technical Outlook

SILVER (DEC): The market has a slightly positive tilt with the close over the swing pivot. Initial support for silver is at 524.5 and below there at 520.8 with resistance likely at 531.8 and 534.5. A positive signal for trend short-term was given on a close over the 9-bar moving average. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 531.8. The market could take on a defensive posture with the daily closing price reversal down.

GOLD (DEC): Support for gold today comes in near 390.10, while resistance is pegged at 400.10. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 400.10. The close over the pivot swing is a somewhat positive setup. The close above the 9-day moving average is a positive short-term indicator for trend. The market rallied to a new contract high. The daily closing price reversal down is a negative indicator for prices.

COPPER MARKET RECAP

11/13/2003

A weak stock market and a lack of convincing economic evidence that the jobs sector is on the mend triggered profit taking in copper. The market has shot higher over the past month and a half and although LME copper stocks continue to decline, the market may have run out of fresh buyers for now. While the outlook remains bullish, March copper may consolidate recent gains and traders may get a chance to buy it on a dip back to 94.10using a risk to a close below 92.40.

ENERGY MARKET RECAP

11/13/2003

The energy complex saw a sharp recovery after early weakness off a disappointing API report, which showed large gains in both distillate & gasoline stocks. A 1.838 decline in crude stocks was more than offset by a 1.5 million barrels rise in gas stocks and over 1.8 million barrels rise in distillate stocks. However, on closer look at the report, the sharp decline in the refinery-operating rate suggests refiners are not revving up heating oil supplies ahead of the winter season. Despite the rise in products, heating oil stocks are only 7.3 million barrels above year ago levels. With a heightened terrorist alert for oil tankers and other Middle East energy facilities, heating oil supplies remain tight enough that any disruption in supply could send the energy complex sharply higher. January crude oil is in a bullish chart position to take out $32.

Technical Outlook

CRUDE OIL (JAN): There could be more upside follow through since the market closed above the 2nd swing resistance. Support for crude is keyed on 30.96 and below there at 30.29, with resistance pegged at 31.90 and 32.17. 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 32.17.

UNLEADED GAS (JAN): Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 88.74. The market setup is supportive for early gains with the close over the 1st swing resistance. Resistance today is at 88.74, while support should be found around 83.14. The market made a new contract high on the rally. 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.

HEATING OIL (JAN): There could be more upside follow through since the market closed above the 2nd swing resistance. Heating oil should encounter support around 83.73, with resistance is at 89.13. 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 89.13.

CORN MARKET RECAP

11/13/2003

March corn closed 1 tick higher on the session but down more than 3 cents off of the highs of the day as fund buying slowed up at mid-session which trigger a 5 cent break off of the highs. News that Taiwan was allowing imports of corn and meal from China as a temporary set-up which might ease the pressure on their livestock industry from high feedgrain prices may have helped eased fears that China would not longer export corn. Continued debate over the energy bill and subsidizing ethanol usage has also kept corn traders a bit nervous about pressing the upside of the market which is now in a slight over bought condition after a 15 cent rally from last weeks lows. Weekly export sales, released before the opening, are expected to come in near 800,000-1.0 million tonnes as compared with 1.447 million tonnes last week at this time.

Technical Outlook

CORN (MAR) 11/14/2003: Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The next downside target is now at 242 3/4. There could be more upside follow through since the market closed above the 2nd swing resistance. Market resistance comes in at 252 1/4 today, with support at 242 3/4. The close above the 9-day moving average is a positive short-term indicator for trend.

SOY COMPLEX RECAP

11/13/2003

January soybeans closed 6 cents higher on the session and 10 cents off of the lows of the day as speculative buying remained active in spite of the sell-off. Talk that the USDA raised China import needs in this weeks USDA reports helped provide support in spite of a lack of confirmation that China bought 5-9 cargoes of US soybeans this week. Traders are looking for the NOPA Monthly Crush report on Friday to show October soybeans crushed at 138-144 million bushels as compared with 123.17 million crushed in September and 144.76 million crushed in October of 2002. Weekly export sales, released before the opening, are expected to come in near 750,000-950,000 tonnes for soybeans, 50,000-100,000 tonnes for meal and 5,000-10,000 tonnes for oil.

Technical Outlook

SOYBEANS (JAN) 11/14/03 The daily closing price reversal up is a positive indicator that could support higher prices. The market has a slightly positive tilt with the close over the swing pivot. The next area of resistance is around 782 1/2 and 787 1/4, while 1st support hits today at 769 1/2 and below there at 761 1/4. A negative indicator was given with the downside crossover of the 9 & 18 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 761 1/4.

MEAL (MAR): Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The next downside target is now at 235.0. The upside daily closing price reversal gives the market a bullish tilt. First resistance comes in at 242.6, with support at 237.7. The close above the 9-day moving average is a positive short-term indicator for trend. It is a slightly negative indicator that the close was under the swing pivot.

BEAN OIL (MAR): A positive signal for trend short-term was given on a close over the 9-bar moving average. Stochastics are at mid-range, but trending higher which should reinforce a move higher if resistance levels are taken out. The next upside objective is 26.22. A positive setup occurred with the close over the 1st swing resistance. Daily swing resistance is found at 26.12 and above there at 26.22. Support should be encountered at 25.79 and 25.56. Short-term indicators suggest buying dips today.

WHEAT MARKET RECAP

11/13/2003

March wheat closed 3 1/4 higher on the session and into new contract highs as buying emerged on a shallow mid-session break to provide support. While there was talk of an overbought condition after a 46 cent rally in just 7 trading sessions, talk of imports from China and others helped keep buyers active. European grain prices are up sharply with French wheat prices still soaring and London wheat hitting the highest level since 1996. Italian milling wheat prices were near 200 euros from 189-192 last week and 187-192 the previous week. Romania’s Agriculture Ministry decided to allow unlimited duty-free imports this year to help ease tightness which has developed due to summer drought. Weekly export sales, released before the opening, are expected to come in near 500,000-750,000 tonnes as compared with 946,700 tonnes last week at this time.

Technical Outlook

WHEAT (MAR) 11/14/2003: The market made a new contract high on the rally. The market has a slightly positive tilt with the close over the swing pivot. Expect near-term support around 414 and below there at 408 3/4, with resistance levels at 421 1/2 and 423 3/4. A positive signal for trend short-term was given on a close over the 9-bar moving average. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 423 3/4. The market is approaching overbought levels with an RSI over 70.

LIVE CATTLE RECAP

11/13/2003

December cattle closed 50 lower on the session but managed to bounce 72 points off of the lows into the close as some buying support emerged due to the stiff discount of December Cattle to the cash market. Cash cattle traded at $105 last week but bids fell from $102 on Wednesday to just $95-$99 today as packer continue to see deep in the red profit margins due to high live cattle prices and declining beef prices. Boxed-beef cut-out values were down $1.41 to $168.38 as compared with $169.91 last week at this time. Slaughter came in at 129,000 head as compared with trade expectations of 125,000-129,000 which could signal some improvement in packer demand. Slaughter this week has reached 466,000 head as compared with 507,000 head last year at this time.

Technical Outlook

CATTLE (DEC) 11/14/2003: Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The next downside objective is 93.05. The market tilt is slightly negative with the close under the pivot. Support should be encountered at 93.87 and below there at 93.05. Market resistance is at 95.77 and then again at 96.82. A negative signal for trend short-term was given on a close under the 9-bar moving average.

LEAN HOGS RECAP

11/13/2003

December hogs closed 1 tick lower on the session and down 70 points from the highs of the day as weakness in the cash market (down $1.00 at Peoria) and a 3-day collapse in pork values helped keep buyers quiet but sellers turned more active on the mid-session rally attempt. The market found some support from sharply higher belly futures as commercial hedge buyers were noted in the belly pit. Slaughter is still running high at 395,000 head which brought week-to-date slaughter to 1.532 million head from 1.568 million last week and 1.52 million head last year.

Technical Outlook

HOGS (DEC) 11/14/2003: It is a slightly negative indicator that the close was under the swing pivot. Resistance levels comes in at 50.50 and 51.07 today, while support is around 49.60 and then 49.27. The close below the 9-day moving average is a negative short-term indicator for trend. 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 49.27. With a reading under 30, the 9-day RSI is approaching oversold levels.

COCOA MARKET RECAP

11/13/2003

March cocoa saw follow through gains Thursday as reports from Ivory Coast exporters indicated shipment of beans from the main 2003/04 crop were down 18% as of Oct 31st from a year ago. This lower export news comes on the heels of yesterday’s revival in the political anxiety between rebel forces and the government. Industry buying was also a factor providing support to cocoa. The upside breakout on the charts projects the next upside target for March cocoa at 1626.

Technical Outlook

COCOA (MAR)11/14/03 The market has a slightly positive tilt with the close over the swing pivot. Cocoa should run into resistance at 1593 and above there at 1623 with support at 1515 and 1467. 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 1623.00.

COFFEE MARKET RECAP

11/13/2003

The successful test of the October lows and higher close on the session is a bullish technical formation and could trigger significant speculative short-covering and technical buying over the near-term. March coffee closed 100 higher on the session and up 150 from the lows of the day as the market break stopped just 1 tick from the October lows. London coffee was also higher after hitting 13-month lows this week and a close above 684 for January coffee in London on Friday would set-up a weekly closing price reversal and a bullish technical signal. The market found support from ideas that Brazil producers will deliver near 1 million bags to government warehouses for storage as the price-support put program price is above the current Brazil cash markets. In addition, traders are not confident that the new crop production is going well after a dry October and mixed weather so far in November.

Technical Outlook

COFFEE (MAR)11/14/03 The outside day up and close above the previous day’s high is a positive signal. 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 daily stochastics have crossed over up which is a bullish indication. The near-term upside objective is at 64.60.The Coffee contract should run into resistance at 64.10 and above there at 64.60 with support at 62.4 and 61.20. The market’s short-term trend is positive on a close above the 9-day moving average. The market was pushed to a new contract low.

SUGAR MARKET RECAP

11/13/2003

The market pushed moderately higher and broke out to the upside of the recent consolidation to close at the highest level since October 3rd. The upside break-out could attract additional technical buying and short-covering to end the week as fund traders were noted as holding a massive net short position in the last COT report. Domestic sugar prices in Brazil moved higher on the week in spite of the perceived bearish cash fundamentals as the strong dollar and the tail end of the harvest season helped support. In addition, fuel alcohol prices were also on the rise. The International Sugar Organization pegged this summers EU sugar production at 16.9 million tonnes as compared with 17.7 million last year as drought kept the size down but the sugar content high.

Technical Outlook

SUGAR (MAR) 11/14/2003: There could be more upside follow through since the market closed above the 2nd swing resistance. Swing resistance comes in at 6.48, with support found at 6.14. The upside crossover of the 9 & 18 bar moving average is a positive signal. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 6.48.

COTTON MARKET RECAP

11/13/2003

March Cotton closed 98 higher on the session and near the highs of the day as traders were anxious to see if exports during the past week have improved due to recent sharp break. Trade houses were noted as active buyers for much of the session which provided support. The inside trading session and close above the opening is positive technical action and the fact that key support at 76.20 March has held this week indicates that a near-term low could be in place. The USDA pegged China cotton imports at a whopping 7 million bales for the 2003/2004 marketing year and traders look for China to be the bulk of this weeks sales.
Weekly export sales, released before the opening, are expected to come in near 300,000-600,000 bales as compared with 275,800 bales last week at this time.

Technical Outlook

COTTON (MAR) 11/14/2003: A negative signal for trend short-term was given on a close under 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 78.78 and then again at 79.19, while support is targeted at 77.15 and 75.93. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The next downside objective is 75.93.