Here’s Why Traders Are Watching The June Dollar

Technical Outlook

#BONDS (JUN) 04/20/04: It is a slightly negative
indicator that the close was lower than the pivot swing number. Near-term
resistance for bonds is at 108.11 and then again at 108.29, while swing support
hits at 107.19 and below there at 107.13. 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 107.13. The 9-day RSI under 30 indicates the market is approaching
oversold levels.

T-NOTES(JUN) The daily closing price reversal
down puts the market on the defensive. Daily momentum studies are on the rise
from low levels and should accelerate a move higher on a push through the 1st
swing resistance. The near-term upside objective is at 112.02. The market’s
close below the pivot swing number is a mildly negative setup. Near-term
resistance for the T-Notes is at 111.22 and then again at 112.02, while swing
support hits at 111.06 and below there at 111.02. The market’s short-term trend
is negative as the close remains below the 9-day moving average. With a reading
under 30, the 9-day RSI is approaching oversold levels.

 

STOCK INDICES RECAP

4/19/2004

The stock market continued to languish within a
tight range but in general has maintained a positive tilt. With the US leading
indicator report showing a +0.3% the market was supported but perhaps a little
disappointed that even better numbers weren’t posted. Reports of Security
arrests in the UK and concerns about increased terror threats inside Saudi
Arabia served to push some potential investors to the sidelines Monday,
especially since earnings reports have been a non-event.

Technical Outlook

#S&P500 (JUN) 04/20/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Underlying support
comes in at 1130.20 and 1125.70, with overhead resistance at 1137.20 and
1139.70. The market’s short-term trend is negative as the close remains below
the 9-day moving average. 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 1125.70.

S&P E-Mini (JUN): Momentum studies trending lower
at mid-range could accelerate a price break if support levels are broken. The
next downside objective is 1125.50. The market has a slightly positive tilt with
the close over the swing pivot. The market now above the 40-day moving average
suggests the longer-term trend is up. Near-term resistance for the S&P Mini is
at 1136.75 and then again at 1139.50, while swing support hits at 1129.75 and
below there at 1125.50. A negative signal for trend short-term was given on a
close under the 9-bar moving average.

NASDAQ (JUN) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. A
positive setup occurred with the close over the 1st swing resistance. The market
should run into resistance at 1483.25 and above there at 1490.63 with support at
1458.75 and 1441.63. Negative momentum studies in the neutral zone will tend to
reinforce lower price action. The next downside target is 1441.6.

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 10442 and above there at 10469 with support
at 10382 and 10349. Negative momentum studies in the neutral zone will tend to
reinforce lower price action. The next downside target is 10349. With the close
higher than the pivot swing number, the market is in a slightly bullish posture.

 

CURRENCY MARKET RECAP

4/19/2004

The Dollar came in very weak, managed to reject
some of the losses but in the end was lower on the session. The US leading
indicator report was mostly as expected and didn’t serve to mitigate the
pre-existing negative macro economic tilt that was foster by information
released from the US last week. Political problems for the US President
continued to undermine the Dollar as another Book on the President seemed to
foster the image of the US as a warmonger. Since the US economy is posting less
impressive economic numbers the political baggage has a little more weight.

Technical Outlook

#CURRENCIES 04/20/04: YEN (JUN): The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative. The swing indicator gave a moderately negative reading with
the close below the 1st support number. Swing resistance is targeted at 92.69
and above there at 93.13, with the yen finding support around 91.98 and below
there at 91.71. The close under the 40-day moving average indicates the
longer-term trend could be turning down. Momentum studies are declining, but
have fallen to oversold levels. The next downside target is 91.71. Short-term
indicators on the defensive. Consider selling an intraday bounce.

EURO (JUN): Daily momentum studies are on the
rise from low levels and should accelerate a move higher on a push through the
1st swing resistance. The near-term upside objective is at 1.2055. The market is
in a bearish position with the close below the 2nd swing support number. Swing
support for the Euro comes in at 1.1955, with overhead resistance at 1.2055. 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

4/19/2004

The gold market started out firm but then gave
back the gains around mid session. The fact that the Dollar managed to recover
some of the early losses seemed to undermine gold but it was clear that silver
was on a different focus as it managed to stay positive. With the energy complex
being lifted by ongoing terrorism fears in Saudi Arabia we would have expected
gold to find a little more flight to quality support. Many traders are watching
the 89.30 level in the June Dollar Index for a sign that the trend has turned
down and at that point one might expect fresh buying in gold instead of simple
short covering.

Technical Outlook

#P-METALS 04/20/04: SILVER (MAY): With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
Initial support for silver is at 715.5 and below there at 710.3 with resistance
likely at 722.4 and 726.5. 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
710.3.

GOLD (JUN): Support for gold today comes in near
398.13, while resistance is pegged at 405.93. Daily stochastics are trending
lower, but have declined into oversold territory. The next downside objective is
now at 398.13. It is a mildly bullish indicator that the market closed over the
pivot swing number. The market’s short-term trend is negative as the close
remains below the 9-day moving average. The daily closing price reversal down
puts the market on the defensive.

 

COPPER MARKET RECAP

4/19/2004

Many suspect that the copper market was initially
vaulted higher by the early weakness in the US Dollar (which makes US supplies
attractive) but the market might also have been lifted by reports that world
aluminum supplies were on the verge of a deficit. Seeing a number of base metals
in short supply in the face of news reports that China might hold off on
restrictive monetary policies is certainly a bullish development. The copper
market was probably also lifted by Wall Street Journal reports that demand for
commodities looked to remain strong despite recent speculation that prices were
discouraging demand.

 

ENERGY MARKET RECAP

4/19/2004

The energy complex started the week out firm
despite suggestions from the US Press that the Saudi Government would weaken oil
prices into the US election. The energy market appeared to be fueled higher off
talk that gasoline demand was remaining relatively firm in the supposedly weak
demand period of spring and because the market is concerned about potential
terrorism attacks on Saudi Arabia. Apparently Saudi officials have repeatedly
found trucks laden with explosives and that is certainly enough to inflate the
anxiety premium in energy prices. Prices might also have been lifted by news
that Libya was fulfilling its OPEC commitment by reducing production.

Technical Outlook

#ENERGIES 04/20/04: CRUDE OIL (JUN): 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 close below the pivot swing
number is a mildly negative setup. Support for crude is keyed on 36.32 and below
there at 35.99, with resistance pegged at 37.19 and 37.73. 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 37.73.

UNLEADED GAS (JUN): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 118.29. It is a slightly negative indicator that the close
was lower than the pivot swing number. Resistance today is at 118.29, while
support should be found around 114.49. 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.

HEATING OIL (JUN): The market’s close below the
1st swing support number suggests a moderately negative setup for today. Heating
oil should encounter support around 90.95, with resistance is at 96.65. 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 96.65.

 

CORN MARKET RECAP

4/19/2004

Fund selling helped pressure the market but the
new crop managed to absorb the bulk of the selling and old crop July led the
market down. The perfect weather for a fast start to the planting season and
fears of continued long liquidation selling of a massive fund long position are
bearish factors. Traders expect plantings to be near 25% complete in tonight’s
weekly progress report. The fastest pace in the past 14 years for this early in
the season occurred in 1994 when 16% was planted. Strength in soybeans and other
commodity markets helped support. Weekly export inspections came in at 17.97
million bushels as compared with trade expectations at 38-43 million bushels.
Cumulative shipments have reached 1.169 billion bushels as compared with 945.1
million last year at this time. Short-term support for July corn comes in at 316
1/4 with 323 and 327 1/2 as resistance.

Technical Outlook

#CORN (JUL) 04/20/04: 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 314 1/4. The market’s close below the
pivot swing number is a mildly negative setup. Market resistance comes in at 322
1/4 today, with support at 314 1/4. The market’s short-term trend is negative as
the close remains below the 9-day moving average.

 

SOY COMPLEX RECAP

4/19/2004

July soybeans closed slightly lower as the early
bounce failed to attract much in the way of new buying as traders view the
short-term weather situation as near ideal for the grain market. November closed
slightly higher with talk that progress is going so well for corn plantings that
producers might shift a few acres away from soybeans and plant to corn. Holding
last weeks lows on the early break helped to slow the fund long liquidation
selling in the market. In addition, traders are a bit more concerned that the
Brazil soybean production will be closer to 50 million tons as compared with the
last USDA projection at 56 million tons. Weekly export inspections came in at
6.39 million bushels as compared with trade expectations at 6-10 million
bushels. Cumulative shipments have reached 782.1 million bushels as compared
with 898.7 million last year at this time. Short-term support for July soybeans
comes in at 960 1/2 with 972 and 986 as resistance. The Buenos Aires Grain
Exchange lowered their Argentina soybean production estimate this year to 33.7
million tons due to drought problems as compared with 34.8 million tons last
year and 35 million tons by the USDA in the April USDA world Supply/Demand
report.

Technical Outlook

#SOYBEANS (JUL) 04/20/04: It is a slightly
negative indicator that the close was lower than the pivot swing number. The
next area of resistance is around 975 1/2 and 986 1/2, while 1st support hits
today at 955 and below there at 945 1/2. 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 945 1/2.

MEAL (JUL): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
297.4. First resistance comes in at 304.9, with support at 299.7. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. The market’s close below the pivot swing number is a mildly negative
setup.

BEAN OIL (JUL): 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 32.86. With the close higher than the pivot swing
number, the market is in a slightly bullish posture. Daily swing resistance is
found at 32.56 and above there at 32.86. Support should be encountered at 31.88
and 31.50.

 

WHEAT MARKET RECAP

4/19/2004

July wheat opened slightly higher and closed
moderately higher on the session as more talk of potential business just ahead
(possibly from China) and a general feeling that the weekend weather may have
damaged some of the winter wheat crop helped support. Fund buying was noted
shortly after the opening. Talk that China may have bought another 2 million
tons of wheat from the US continued this morning and helped to provide
underlying support. Traders expect Egypt to be in the market soon. Egypt last
bought wheat on March 17th (120,000 tons). Weekly export inspections came in at
13.1 million bushels as compared with trade expectations at 18-23 million
bushels. Cumulative shipments have reached 982.7 million bushels as compared
with 747.4 million last year at this time. Short-term support for July Wheat
comes in at 399 1/2 with 404 and 409 1/4 as resistance. The CCC bought 30,000
tons of wheat for Sudan and 56,000 tons for Ethiopia.

Technical Outlook

#WHEAT (JUL) 04/20/04: A positive setup occurred
with the close over the 1st swing resistance. Look for near-term support at 396
1/2 and below there at 391, with resistance levels at 408 and 414. The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative. The cross over and close above the 40-day moving average
indicates the longer-term trend has turned up. Negative momentum studies in the
neutral zone will tend to reinforce lower price action. The next downside target
is 391.

 

LIVE CATTLE RECAP

4/19/2004

June cattle closed slightly higher in two-sided
choppy trade. October futures gapped higher and moved to new contract highs with
support from the bullish placements reported in the USDA report on Friday. Ideas
that the cash market has peaked and that Canadian cattle will be flowing over
the border soon helped to slow the buying support in the June contract on the
early rally. Boxed-beef cut-out values were down 23 cents to 162.35 as compared
with $158.86 last week at this time. Slaughter came in at 11,000 head as
compared with trade expectations at 90,000-112,000 head. The USDA announced that
Canadian bone-in beef can move to the US as long as the beef is coming from
cattle which are 30-month old or younger.

Technical Outlook

#CATTLE (JUN) 04/20/04: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The next downside
target is 75.02. With the close higher than the pivot swing number, the market
is in a slightly bullish posture. Support should be encountered at 75.57 and
below there at 75.02. Market resistance is at 76.87 and then again at 77.62. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative.

 

LEAN HOGS RECAP

4/19/2004

After a 540 point break in 2 1/2 sessions, June
hogs managed to bounce 90 points off of the lows into the close on ideas that
the market is oversold after the steep decline off of last Monday’s contract
highs. Cash markets were $1.00-$2.00 higher at many locations as packer profit
margins are high enough to encourage a hefty slaughter pace. The CME 2-Day lean
Index was up 60 cents to $64.37 as compared with 66.84 on April 1st. Wednesday’s
monthly cold storage report is expected belly stocks at 50.7 million pounds
(range 48.3-52.0) as compared with 57 million pounds last month and 43 million
pounds last year. A 6.3 million pound drawdown in stocks would be a record for
the month on March. In the past 14 years, there has been only 1 year in which
stocks fell more than 1 million pounds and that was in 2001 when stocks fell
1.714 million pounds. In 9 of the 14 years, stocks have increased by more than 3
million pounds with 6 years showing a jump in excess of 8 million pounds.
Slaughter came in at 391,000 head as compared with expectations at 385,000 to
392,000 head.

Technical Outlook

#HOGS (JUN) 04/20/04: The market’s close below
the pivot swing number is a mildly negative setup. Resistance levels comes in at
71.65 and 72.72 today, while support is around 69.70 and then 68.82. The
market’s short-term trend is negative as the close remains below the 9-day
moving average. 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 68.82.

 

COCOA MARKET RECAP

4/19/2004

The cocoa market managed what appeared to be a
slight short covering rally but other than First notice day there would not seem
to be a significant change in fundamentals. After the market was disappointed
with the US grind last week we seriously doubt that sentiment has suddenly
shifted to view the demand situation as a positive. After a significantly weak
US Dollar opening some traders expected US cocoa to come back into favor but as
the session progressed the Dollar seemed to recover and that took away any
arbitrage benefit.

Technical Outlook

COCOA (JUL) 04/20/04 The market setup is
supportive for early gains with the close over the 1st swing resistance. Cocoa
should run into resistance at 1401 and above there at 1419 with support at 1358
and 1333. Momentum studies are declining, but have fallen to oversold levels.
The next downside target is 1333.25.

 

COFFEE MARKET RECAP

4/19/2004

July Coffee closed 25 higher but within the prior
days range. Therefore, the vulnerable status in the coffee market looks to
remain place as the market is hovering just above critical chart support. The
small spec and fund interests continue to press prices with the bears thinking
that weekend rains in Brazil have kept the upcoming crop progressing. The fund
long position documented in the COT report seems to leave the market vulnerable
to more stop loss selling. If the fundamentals don’t begin to show some
improvement the long funds might decide to liquidate even more positions.

Technical Outlook

COFFEE (JUL) 4/20/04 The market has a slightly
positive tilt with the close over the swing pivot. Momentum studies are
declining, but have fallen to oversold levels. The next downside objective is
now at 71.45. The Coffee contract should run into resistance at 72.80 and above
there at 73.05 with support at 72 and 71.45. The market’s short-term trend is
negative as the close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

4/19/2004

After moving to a 5-session high early in the
session, the market closed lower and to the lowest level since April 6th. Trade
house and speculative sellers turned active when August futures moved lower on
the session after hitting contract highs early in the day. The reversal in
London and concerns with the hefty net long position of the speculator in New
York helped to pressure the market. A lack of new business in the cash market
added to the negative tone but cash dealers indicate plenty of inquires from end
users. Egypt is expected to be in the market soon for 40,000 tons of raw sugar
and Bangladesh plans to import 100,000 tons of white sugar.

Technical Outlook

#SUGAR (JUL) 04/20/04: The daily closing price
reversal down puts the market on the defensive. The market’s close below the 1st
swing support number suggests a moderately negative setup for today. Swing
resistance comes in at 7.15, with support found at 6.63. The market’s short-term
trend is negative as the close remains below the 9-day moving average. Momentum
studies are trending higher, but have entered overbought levels. The near-term
upside objective is at 7.15.

 

COTTON MARKET RECAP

4/19/2004

July cotton closed slightly higher but that came
after the market made a new low for the move. The COTLOOK Index closed lower as
traders are still pretty convinced that large planted acres are going to leave
the market oversupplied. We would have expected favorable Chinese economic
stories Monday in the Journal to have provided some support to cotton but
traders were mostly unmoved by macro based news. Talk that the deliverable
stocks might be sold as exports and that could tighten up the near term supply
situation. In other words, near term commercial bull spreading would seem to
countervail recent concerns that the world economy simply isn’t going to be able
to clean up the supply/demand mismatch in cotton.

Technical Outlook

#COTTON (JUL) 04/20/04: 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 63.44 and then again at 63.92,
while support is targeted at 61.99 and 61.02. Positive momentum studies in the
neutral zone will tend to reinforce higher price action. The next upside target
is 63.92. The daily closing price reversal up is positive.