Here’s Why Gold Impressed Today

Technical Outlook

#BONDS (JUN) 03/18/04: The downside closing price
reversal on the daily chart is somewhat negative. With the close higher than the
pivot swing number, the market is in a slightly bullish posture. Near-term
resistance for bonds is at 116.04 and then again at 116.21, while swing support
hits at 115.10 and below there at 115.01. 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 116.21. The 9-day RSI over 70 indicates
the market is approaching overbought levels.

T-NOTES(JUN) The rally brought the market to a
new contract high. The daily closing price reversal down puts the market on the
defensive. Momentum studies are trending higher, but have entered overbought
levels. The near-term upside objective is at 116.24. 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 116.13 and then again at 116.24, while swing
support hits at 115.28 and below there at 115.22. 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.

 

STOCK INDICES RECAP

3/17/2004

The stock market was really impressive but many
suspect that a large portion of the gains were either short covering or were the
result of early unwinding of expiration arbitrage plays. It certainly helped the
bull camp from the Fed Chairman to come out during the session with suggestions
that business loan demand was set to rise as that fostered a better feeling
toward the economy. Some traders suggested that a mundane CPI reading solidifies
the idea that interest rates are on hold indefinitely and that is certainly a
bullish argument.

Technical Outlook

#S&P500 (JUN) 03/18/04: The market’s close above
the 2nd swing resistance number is a bullish indication. The gap up on the day
session chart gave a bullish indicator and more follow through could be seen
this session. Underlying support comes in at 1116.55 and 1109.38, with overhead
resistance at 1127.85 and 1131.98. The market’s short-term trend is negative as
the close remains below the 9-day moving average. The daily stochastics gave a
bullish indicator with a crossover up. The near-term upside objective is at
1131.98.

S&P E-Mini (JUN): Daily stochastics declining
into oversold territory suggest the selling may be drying up soon. The next
downside objective is 1104.38. The market has a bullish tilt coming into today’s
trade with the close above the 2nd swing resistance. Near-term resistance for
the S&P Mini is at 1130.25 and then again at 1135.38, while swing support hits
at 1114.75 and below there at 1104.38. A negative signal for trend short-term
was given on a close under the 9-bar moving average.

NASDAQ (JUN) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. A positive setup
occurred with the close over the 1st swing resistance. The market should run
into resistance at 1440.50 and above there at 1447.25 with support at 1422.50
and 1411.25. Short-term indicators suggest buying dips today. The daily
stochastics have crossed over up which is a bullish indication. The next upside
target is 1447.3.

MINI DOW (JUN) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. The
market should run into resistance at 10360 and above there at 10419 with support
at 10198 and 10095. The daily stochastics have crossed over up which is a
bullish indication. The next upside target is 10419. 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.

 

CURRENCY MARKET RECAP

3/17/2004

The Dollar Index showed early strength but then
buckled into the close. However, with the Euro showing almost as much weakness
as the Dollar it would not seem like a major trend is ready to show itself in
the Dollar. One thing is clear and that is the yen looks to be the leading
currency. With the US inflation reading soft, most currency traders think that
US interest rates are on hold for an extended period of time and that simply
takes away long interest from the Dollar. The weak Industrial production
readings from the Euro zone really serve to put the selling pressure on the Euro
as those numbers were from January and most economist think that the real
slowing in the Euro zone came in February and March.

Technical Outlook

#CURRENCIES 03/18/04: YEN (JUN): The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The gap upmove on the day session chart is a bullish indicator for
trend. A positive setup occurred with the close over the 1st swing resistance.
Swing resistance is targeted at 92.88 and above there at 93.08, with the yen
finding support around 92.47 and below there at 92.26. The close under the
40-day moving average indicates the longer-term trend could be turning down.
Positive momentum studies in the neutral zone will tend to reinforce higher
price action. The next upside target is 93.08. Short-term indicators suggest
buying dips today.

EURO (JUN): Momentum studies are trending higher
from mid-range which should support a move higher if resistance levels are
penetrated. The near-term upside objective is at 1.2286. The market is in a
bearish position with the close below the 2nd swing support number. Swing
support for the Euro comes in at 1.2116, with overhead resistance at 1.2286. 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. The gap down on the day session chart is bearish with
more selling pressure possible today.

 

PRECIOUS METALS RECAP

3/17/2004

The gold market really put on an impressive
performance and certainly managed to outperform the silver market. The fact that
gold rallied without the benefit of a weak Dollar and rallied in the face of
what many considered a mundane CPI reading means that the market has capacity it
hasn’t had in the recent past. In other words, the gold market is showing some
prowess and it is possible that both gold and silver manage upside breakouts in
the coming sessions. It should also be noted that gold managed to climb above a
number of critical technical levels on the charts with the close above $408 in
the June contract.

Technical Outlook

#P-METALS 03/18/04: SILVER (MAY): 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. Initial support for
silver is at 718.5 and below there at 707.8 with resistance likely at 724.3 and
733.5. 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
724.3. The 9-day RSI over 70 indicates the market is approaching overbought
levels. The outside day up and close above the previous day’s high is a positive
signal. The daily closing price reversal up is positive.

GOLD (APR): Support for gold today comes in near
400.43, while resistance is pegged at 411.43. Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
411.43. Consider buying pull-backs since daily studies are bullish. With the
close over the 1st swing resistance number, the market is in a moderately
positive position. The market’s short-term trend is positive on a close above
the 9-day moving average. The major trend could be turning up with the close
back above the 40-day moving average.

 

COPPER MARKET RECAP

3/17/2004

The copper market is certainly showing choppy
action for such a strong bull market. It seemed that the trade was undermined by
the reports flowing from an industry meeting where presenters suggested that
sagging macro economics in the US and Euro zone economies might serve to derail
surging demand patterns. It was also noted during the session that a Canadian
copper producer was planning to increase production and that simply caught the
market in a weakened posture. We continue to see the overly large fund and small
spec longs moving to the sidelines and that could spell even more losses in the
future.

 

ENERGY MARKET RECAP

3/17/2004

There was no weakness in the energy complex as
the weekly inventory readings appeared to clear the way for an aggressive buying
binge. While the inventory readings were not that significant it appeared like
the trade took the failure to build up crude stocks as a sign that no seasonal
rebuilding was going to take place. The trade also cited an ongoing decline in
gasoline inventories, as a sign that the market was going to progress directly
to “summer like” gasoline trading patterns. In short the market is pent on the
bull case and won’t let go of that mentality.

Technical Outlook

#ENERGIES 03/18/04: CRUDE OIL (MAY): The rally
brought the market to a new contract high. The market’s close above the 2nd
swing resistance number is a bullish indication. Support for crude is keyed on
37.12 and below there at 36.46, with resistance pegged at 38.12 and 38.46. 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 38.46. With a reading over 70, the 9-day RSI is
approaching overbought levels.

UNLEADED GAS (MAY): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 118.38. 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. Resistance today is at 118.38, while support should be
found around 110.38. 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.

HEATING OIL (MAY): The market’s close above the
2nd swing resistance number is a bullish indication. Heating oil should
encounter support around 89.35, with resistance is at 97.95. 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 97.95. The rally brought the market to a new contract
high.

 

CORN MARKET RECAP

3/17/2004

After a lower opening, the market found a lack of
follow-through selling shortly after the opening and a surge in wheat prices and
higher soybean trade helped support a rally to match yesterday’s contract highs.
The July and December contracts managed new contract highs. South Korea bought
105,000 tons of optional origin corn overnight and traders suspect that this
business may go to the US. South Korea is also tendering for 52,500 tons of corn
for food consumption. In addition to South Korea activity, the market may have
found some support from news from the Vietnam Trade Minister that the country
may need to import near 500,000-600,000 tons of corn in order to restock poultry
flocks which were diminished from the bird flu outbreak. For the weekly export
sales report, released before the opening, traders are looking for sales near
700,000-900,000 tons as compared with 573,600 tons last week.

Technical Outlook

#CORN (MAY) 03/18/04: Momentum studies are
trending higher, but have entered overbought levels. The near-term upside
objective is at 313 1/4. The market’s close above the 2nd swing resistance
number is a bullish indication. Market resistance comes in at 313 1/4 today,
with support at 301 1/4. The market’s short-term trend is positive on a close
above the 9-day moving average. The rally brought the market to a new contract
high. The upside closing price reversal on the daily chart is somewhat bullish.

 

SOY COMPLEX RECAP

3/17/2004

May soybeans closed higher for the 5th session in
a row and moved to new contract highs and new 15 1/2 year highs for nearby
futures. Speculative buying emerged to drive prices higher when the early break
failed to attract long liquidation selling. Commercial buying was noted as well
shortly after the lower opening. The Brazil export inspectors are still on
strike for the third day in a row in spite of a warning from the government to
end the strike if export flow is disrupted. Traders remain nervous over the
outcome of this situation and over the size of the harvest in Brazil. The Ag
Ministry in Brazil indicates that near 10 vessels were blocked at the main port
of Paranagua, Brazil due to the strike so far. The Argentina Ag Minister today
pegged the 2003/2004 soybean crop at 34.7 million tons as compared with 36.5
forecast from the USDA and 34.8 million tons last year. For the weekly export
sales report, released before the opening, traders are looking for soybean sales
near 100,000-350,000 tons as compared with 267,900 tons last week. Meal sales
are expected near 0-50,000 tons and oil at 0-5,000 tons. Concerns with the
overbought condition of the market helped to stall the rally at 999 for May
soybeans as some light long liquidation selling emerged to trigger a set-back
late in the session.

Technical Outlook

#SOYBEANS (MAY) 03/18/04: A new contract high was
made on the rally. With the close higher than the pivot swing number, the market
is in a slightly bullish posture. The next area of resistance is around 1002 1/2
and 1009 1/4, while 1st support hits today at 985 1/2 and below there at 975
1/4. 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
1009 1/4. The 9-day RSI over 70 indicates the market is approaching overbought
levels.

MEAL (MAY): Momentum studies are trending higher,
but have entered overbought levels. The near-term upside objective is at 311.2.
The rally brought the market to a new contract high. First resistance comes in
at 308.4, with support at 301.4. The market’s short-term trend is positive on a
close above the 9-day moving average. It is a mildly bullish indicator that the
market closed over the pivot swing number. With a reading over 70, the 9-day RSI
is approaching overbought levels.

BEAN OIL (MAY): The market’s close above the
9-day moving average suggests the short-term trend remains positive. Positive
momentum studies in the neutral zone will tend to reinforce higher price action.
The next upside target is 34.11. It is a slightly negative indicator that the
close was lower than the pivot swing number. Daily swing resistance is found at
33.72 and above there at 34.11. Support should be encountered at 33.07 and
32.81.

 

WHEAT MARKET RECAP

3/17/2004

Massive fund buying thought to be near 10,000
contracts by late in the session helped drive the market sharply higher. Buying
from Egypt and Iraq and hopes that China will ship near 1 million tons of US
wheat in the next few months helped to support the demand bulls and the surge in
new buying came at the same time that world stocks are tightening to the lowest
level since the 1981/1982 season and in conjunction with a switch in the weather
pattern in the US winter wheat areas. Futures moved sharply higher shortly after
the opening from continued dry forecast for the central plains and from signs of
improving demand. Egypt bought 120,000 tons of US wheat overnight and traders
remain confident that the US will receive a lion’s share of UN/Iraq tender for
630,000 tons of wheat. The US has already sold 110,000 tons to Iraq yesterday
and another 160,000 overnight. Argentina sold 110,000 tons to Iraq overnight as
well. There is very little rain in the forecast for the plains with warming
trend into the weekend when central plains temperatures are expected to be near
20 degrees above normal. Warm and dry weather in Western Kansas could stress the
early sprouted wheat with little subsoil moisture while other areas of the
plains will dry out from recent rains. The trade sentiment at last week’s lows
had the market anticipating a good start to the US crop and surging world
production. This appears to be shifting quickly. Ay wheat in Kansas City closed
at the highest level since January 16th and May Minneapolis wheat closed within
6 cents of contract highs. For the weekly export sales report, released before
the opening, traders are looking for sales near 400,000-500,000 tons as compared
with 617,200 tons last week.

Technical Outlook

#WHEAT (MAY) 03/18/04: 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. Look for near-term support at
382 and below there at 368, with resistance levels at 401 and 406. The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The cross over and close above the 40-day moving average indicates the
longer-term trend has turned up. Positive momentum studies in the neutral zone
will tend to reinforce higher price action. The next upside target is 406.

 

LIVE CATTLE RECAP

3/17/2004

The rally to the highest level since December 3rd
failed to entice new buying and weakness in pork and talk of higher production
in the weeks ahead helped to trigger the reversal and lower close, down 65 for
April cattle. Positioning ahead of the Cattle-on-Feed report on Friday added to
the bearish tone with traders are looking for on-feed supplies for March 1st to
come in near 103.8% of last year (range 103-105), February placements at 96.2%
(range 90.6-102.6) and February marketings at 98.6% (95.9-100.5). News that
Japan will insist that all US cattle be tested for mad cow helped to pressure.
In addition, there was talk that higher beef prices could lower beef demand into
the active spring demand period just ahead. Boxed-beef cut-out values were up 60
cents to $145.20 as compared with $144.11 last week at this time.

Technical Outlook

#CATTLE (APR) 03/18/04: 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
80.05. It is a slightly negative indicator that the close was lower than the
pivot swing number. Support should be encountered at 80.92 and below there at
80.05. Market resistance is at 83.02 and then again at 84.27. 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.

 

LEAN HOGS RECAP

3/17/2004

April hogs closed 122 lower on the session and
down 172 points from the highs of the day. The key reversal from a new contract
high could attract additional technical selling on Thursday. Talk that high pork
values could weaken demand this spring and expectations that export demand could
slow as more countries lift bans on US poultry and beef helped pressure the
market. Cash markets were steady on the session. Weekly average weights from
Iowa/Minnesota for the week ending March 13th averaged 264.5 pounds as compared
with 266.3 pounds the previous week and 262.9 pounds last year. Packer margins
were pinched this week which might limit demand for live animals for late in the
week.

Technical Outlook

#HOGS (APR) 03/18/04: The market’s close below
the 1st swing support number suggests a moderately negative setup for today.
Resistance levels comes in at 65.10 and 66.40 today, while support is around
63.05 and then 62.30. The market’s key reversal down is a bearish signal. The
outside day down is a negative signal. The rally brought the market to a new
contract high. The daily closing price reversal down puts the market on the
defensive. The market’s short-term trend is positive on a close above the 9-day
moving average. The daily stochastic’s gave a bearish indicator with a crossover
down. 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 62.30.

 

COCOA MARKET RECAP

3/17/2004

There was no follow through in the cocoa market
as the recent buying interest dried up and pries folded in on top of the recent
buyers. A sharp rise in CSCE cocoa warehouse stocks and a return of origin
selling caught the market overbought and vulnerable. The market almost
completely discounted the fact that Ivory Coast weather seems to be turning dry
partly because the main focus is on the last crop and not the coming crop.

Technical Outlook

COCOA (MAY) 03/18/04 The close below the 1st
swing support could weigh on the market. Cocoa should run into resistance at
1462 and above there at 1501 with support at 1401 and 1379. Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The next
upside target is 1500.75.

 

COFFEE MARKET RECAP

3/17/2004

The coffee market fell back from the recent highs
and closed lower, which suggests that the recent rally wave might have run its
course already. With both commercials and locals selling we suspect that the
funds will see some liquidation pressure in the coming sessions. Seeing the
commercials drop out of the market so far above the February lows might alarm
the spec crowd and result in a surprising slide in the coming sessions. Fears
that the Brazilian Ag Inspectors might end their strike could have undermined
prices but the strike is still on and that could eventually be supportive to
coffee. It was also noted that Brazilian coffee exports for March were set to
decline and that should cushion the market from excessive liquidation.

Technical Outlook

COFFEE (MAY) 3/18/04 The market tilt is slightly
negative with the close under the pivot. Studies are showing positive momentum,
but are now in overbought territory so some caution is warranted. The near-term
upside objective is at 79.10. The Coffee contract should run into resistance at
77.80 and above there at 79.10 with support at 75.9 and 75.30. The market’s
short-term trend is positive on a close above the 9-day moving average.

 

SUGAR MARKET RECAP

3/17/2004

May sugar close lower for the first time in the
last 10 trading session after there was a lack of new buying interest on the
early move to the highest level since August of 2003. Ideas that futures are
overbought and talk of a record crop in Brazil for this spring helped to trigger
some light long liquidation selling and the slightly lower opening. London
closed lower for the 4th session in a row after contract highs posted on March
11th. The Sao Paulo Cane Agroindustry Union announced that the first forecast
for the 2004/2005 cane crop from the key center-south region will be released on
March 29th. Because of increased plantings, traders are looking for a crop near
310-322 million tons as compared with 298.5 million tons last year.

Technical Outlook

#SUGAR (MAY) 03/18/04: The daily closing price
reversal down puts the market on the defensive. The market’s close below the
pivot swing number is a mildly negative setup. Swing resistance comes in at
6.93, with support found at 6.61. The market’s short-term trend is positive on a
close above the 9-day moving average. The daily stochastic’s gave a bearish
indicator with a crossover down. 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 6.61. With a reading over 70, the
9-day RSI is approaching overbought levels.

 

COTTON MARKET RECAP

3/17/2004

July Cotton closed 57 higher and at the highest
level since March 8th as a steady flow of speculative buying ahead of the weekly
sales report helped support. For the weekly export sales report, released before
the opening, traders are looking for sales near 200,000-400,000 bales as
compared with 106,700 bales last week. Shipments are expected to come in near
290,000-330,000 bales as compared with 316,400 bales last week. With step 2
payments kicking in, traders are looking for shipments to swell in the next few
weeks, especially beginning with next weeks report. The Cotlook A Index was up 5
to 71.60. As of last weeks sales report, China had booked 4.172 million bales of
US cotton so far this season as compared with 1.275 million last year at this
time.

Technical Outlook

#COTTON (MAY) 03/18/04: 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 66.80 and then again at 67.30,
while support is targeted at 65.40 and 64.50. Daily stochastics are showing
positive momentum from oversold levels which should reinforce a move higher if
near-term resistance is taken out. The next upside target is 67.30. The daily
closing price reversal up is positive.