How The Dollar Is Affecting Copper…

Technical Outlook

#BONDS (SEP) 07/08/04: It is a slightly negative
indicator that the close was lower than the pivot swing number. Near-term
resistance for bonds is at 107.31 and then again at 108.06, while swing support
hits at 107.18 and below there at 107.12. The market’s close above the 9-day
moving average suggests the short-term trend remains positive. 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 107.12.

T-NOTES(SEP) The daily stochastics 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 110.01. The market’s close below
the pivot swing number is a mildly negative setup. Near-term resistance for the
T-Notes is at 110.17 and then again at 110.23, while swing support hits at
110.06 and below there at 110.01. 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

7/7/2004

The stock market appeared to be poised for a
strong opening salvo off favorable earnings expectations but initially didn’t
act impressively. However, toward mid session the market seemed to gather some
momentum and might have been lifted off news that the Russian Central Bank
intervened to ease the concerns over the Russian Banking crisis. We also think
that the market was merely anticipating favorable after the close earnings and
was lifted by the mid day weakness in energy prices. Strong gains in copper and
platinum prices supposedly came off an improved outlook toward the Chinese
economy and seeing the outlook for the Chinese economy improve is certainly
supportive for the equity market.

Technical Outlook

#S&P500 (SEP) 07/08/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Underlying support
comes in at 1114.30 and 1110.25, with overhead resistance at 1122.10 and
1125.85. The downside crossover (9 below 18) of the moving averages suggests a
developing short-term downtrend. Daily stochastics are trending lower, but have
declined into oversold territory. The next downside objective is now at 1110.25.

S&P E-Mini (SEP): Daily stochastics declining
into oversold territory suggest the selling may be drying up soon. The next
downside objective is 1109.63. The market has a slightly positive tilt with the
close over the swing pivot. The market back below the 40-day moving average
suggests the longer-term trend could be turning down. Near-term resistance for
the S&P Mini is at 1122.75 and then again at 1126.63, while swing support hits
at 1114.25 and below there at 1109.63. A negative indicator was given with the
downside crossover of the 9 & 18 bar moving average.

NASDAQ (SEP) 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 1461.00 and above there at
1468.50 with support at 1448.00 and 1442.50. Negative momentum studies in the
neutral zone will tend to reinforce lower price action. The next downside target
is 1442.5.

MINI DOW (SEP) 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 10264 and above there at 10297 with support
at 10193 and 10155. Momentum studies are declining, but have fallen to oversold
levels. The next downside target is 10155. The cross over and close above the
40-day moving average indicates the longer-term trend has turned up. With the
close higher than the pivot swing number, the market is in a slightly bullish
posture.

 

CURRENCY MARKET RECAP

7/7/2004

The Dollar Index fell toward the April lows and
did so even in the face of news that the Russian banking crisis was bad enough
to require a Russian Central Bank bailout. However, with the US economic report
slate empty and the market seeing comments from the US Fed that US productivity
was set to fall back it’s understandable that the slide in the Dollar continued.
The fact that the Euro zone continued to produce favorable economic readings
simply facilitated the rise in the Euro. With several stories pointing to
improved Chinese economic conditions we also think that the Japanese Yen was
given a fresh round of speculative buying. We are not sure there is a reason to
pound the Dollar unless the numbers out over the rest of the week are extremely
weak.

Technical Outlook

#CURRENCIES 07/08/04: YEN (SEP): The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative. The gap upmove on the day session chart is a bullish indicator
for trend. 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. Swing resistance is targeted at 92.69 and above there at 92.92,
with the yen finding support around 92.24 and below there at 92.02. Negative
momentum studies in the neutral zone will tend to reinforce lower price action.
The next downside target is 92.02.

EURO (SEP): Momentum studies are trending higher,
but have entered overbought levels. The near-term upside objective is at 1.2393.
The market is in a bearish position with the close below the 2nd swing support
number. Swing support for the Euro comes in at 1.2315, with overhead resistance
at 1.2393. 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

7/7/2004

The gold market exploded Wednesday and did so
partly because of the sharp ongoing declines in the Dollar and might also have
been lifted by talk that Chinese economic growth was set to continue. Seeing an
improved outlook for Chinese activity seemed to lift all the metals with the
more industrial metals of copper and platinum leading the way higher. We have
seen copper and platinum market action tightly mirror demand expectations out of
Asia and that is why we think the gold managed to rise partly off the Chinese
element. There was a failed buyout attempt in the gold stock area but we are not
sure that played a role in the sharp upside adjustment in gold prices.

Technical Outlook

#P-METALS 07/08/04: SILVER (SEP): A positive
setup occurred with the close over the 1st swing resistance. Initial support for
silver is at 607.5 and below there at 601.8 with resistance likely at 612.8 and
617.5. 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 612.8. Short-term
indicators suggest buying dips today.

GOLD (AUG): Support for gold today comes in near
395.60, while resistance is pegged at 408.00. The daily stochastics gave a
bullish indicator with a crossover up. The near-term upside objective is at
408.00. 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.

 

COPPER MARKET RECAP

7/7/2004

The weak dollar appears to be drawing in
speculative buying in copper as well as in the precious metals. September copper
closed 3.70 higher at 125.50 after trading to 126.00, its highest level since
June 7th. The market gained despite the some disappointing US economic reports,
as cash business has remained strong and copper stocks have been drawn down to
their lowest levels in several years. Strike talk in Chile might also be
underpinning the market, but trader comments indicate that they expect a strike
to be averted.

 

ENERGY MARKET RECAP

7/7/2004

August crude oil fell sharply after different
news reports made it apparent that world oil production and supplies could be on
the rise. Striking Nigerian oil workers resolved their dispute with management
which means production will start immediately after a 5 day stoppage. Also,
Saudi Arabia’s oil minister said OPEC would go ahead with the planned production
increase of 500,000 barrels per day. Iraq oil exports were also flowing again
after a weekend sabotage attempt. Unleaded gas saw a choppy trade as prices were
pressured early on reports of more cargoes of distillates from Venezuela arrived
in NY. However, Aug gasoline closed in positive territory ahead of the delayed
API/DOE report out Thursday with estimates for Gasoline stocks to decline
between 1 and 2 million barrels.

Technical Outlook

#ENERGIES 07/08/04: CRUDE OIL (AUG): The market’s
close below the 1st swing support number suggests a moderately negative setup
for today. Support for crude is keyed on 38.68 and below there at 38.32, with
resistance pegged at 39.48 and 39.92. 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 39.92.

UNLEADED GAS (AUG): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 129.45. With the close higher than the pivot swing number,
the market is in a slightly bullish posture. Resistance today is at 129.45,
while support should be found around 124.45. The market’s close above the 9-day
moving average suggests the short-term trend remains positive.

HEATING OIL (AUG): The market’s close below the
1st swing support number suggests a moderately negative setup for today. Heating
oil should encounter support around 105.11, with resistance is at 110.31. 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 110.31.

 

CORN MARKET RECAP

7/7/2004

The lack of a surprise in the crop ratings but
more active export news helped to provide support to the market on the early
break. Good weather in the forecast over the next week helped to limit the
buying support while strength in wheat helped support. Egypt bought 100,000 tons
of US corn and South Korea bought 105,000 tons of US or South American corn
overnight. The sharp drop in the US dollar along with the 62 cent break off of
the June highs may be helping to boost near-term export demand. The crop was
rated 73% in good to excellent condition to start the week, up 2% from last week
and in-line with trade expectations. The crop is also showing 19% in the silking
stage as compared with 9% last week and 9% on average for this time of the year.
Illinois is 47% silking vs. 11% on average and Indiana is 32% vs. 6% on average.
Deliveries this morning were 165 lots. December corn support moves up to 258 and
256 3/4 with 262 1/2 and 271 as resistance.

Technical Outlook

#CORN (DEC) 07/08/04: Daily stochastics are
trending lower, but have declined into oversold territory. The next downside
objective is now at 254 3/4. The market’s close below the pivot swing number is
a mildly negative setup. Market resistance comes in at 263 1/4 today, with
support at 254 3/4. 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.

 

SOY COMPLEX RECAP

7/7/2004

A lack of deliveries and fears of not being able
to obtain meal supplies in August helped to drive the old crop soybeans sharply
higher and helped to push July meal to a new contract high early in the session.
July soybeans hit an early high of 1035, just short of the May highs before
seeing a collapse into the close. The lower close after an 80 cent range will be
seen as a bearish technical development and the market experienced a correction
in the bull spreads. Crop conditions improved to 67% in good to excellent
condition, up 1% from last week and in-line with trade expectations. Crops last
year were rated 70% good to excellent at this time but the crop was rated 47%
good to excellent by late August last year as the weather shifted in mid-July
from the cool/wet pattern to a hotter and drier pattern. It looks warmer and
drier into next week and there are some concerns that the weather pattern is
following last years pattern. Egypt bought 62,000 tonnes of assorted vegetable
oils and Iran bought 10,000 tonnes of Brazil oil. The FDA announced that they
will publish details on safeguards aimed at protecting US food and animal feed
from mad cow disease. The new rules could cause an increase in meal consumption.
November soybean support comes in at 653 and 650 with 669 3/4 and 678 1/4 as
next resistance.

Technical Outlook

#SOYBEANS (NOV) 07/08/04: A positive setup
occurred with the close over the 1st swing resistance. The next area of
resistance is around 679 and 700 1/2, while 1st support hits today at 642 and
below there at 626 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 626
1/2.

MEAL (DEC): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
197.6. First resistance comes in at 214.3, with support at 202.8. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. The market’s close above the 2nd swing resistance number is a bullish
indication.

BEAN OIL (DEC): 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 22.48. The close below the 2nd swing support number puts the
market on the defensive. The outside day down and close below the previous day’s
low is a negative signal. The downside closing price reversal on the daily chart
is somewhat negative. Daily swing resistance is found at 24.34 and above there
at 25.32. Support should be encountered at 22.92 and 22.48.

 

WHEAT MARKET RECAP

7/7/2004

The improved technical action helped to support
more active short-covering from speculators into the mid-session. The winter
wheat crop is now more than 60% harvested (as of Sunday) and with good weather
this week, harvest is expected to wrap up soon. There is a perception that the
worst of the harvest selling pressures are behind and that commercial buyers
turned more active as well. Some quality problems have shown up in parts of
northern Kansas with sprouting damage noted. The recent sharp break in wheat
prices and in the US dollar has left US wheat a little more competitive on the
world market. Deliveries were only 3 contracts this morning which added to the
positive tone. Support for September wheat moves up to 345 with resistance at
355 1/4 and 360 1/2.

Technical Outlook

#WHEAT (DEC) 07/08/04: The gap upmove on the day
session chart is a bullish indicator for trend. Short-term indicators suggest
buying dips today. A positive setup occurred with the close over the 1st swing
resistance. Look for near-term support at 358 and below there at 355, with
resistance levels at 364 1/4 and 367 1/2. The market’s close above the 9-day
moving average suggests the short-term trend remains positive. 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 367 1/2.

 

LIVE CATTLE RECAP

7/7/2004

August live cattle closed 120 points lower on the
session with commercial selling noted early in the session helping to drive the
market back under the 40-day moving average and part way into the gap left on
Tuesday. Talk that packers are cutting back on slaughter due to poor packer
profit margins. Packer bids emerged this week at just $84 as compared with
offers at $90-$92 added to the bearish tone and led to traders second guessing
the idea that cash markets will trade $2.00-$3.00 higher this week from $87
trades last week. Boxed-beef cut-out values were up 80 cents to $142.54 but
still down from last weeks trade at $145.39.

Technical Outlook

#CATTLE (AUG) 07/08/04: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The next downside
target is 85.27. The swing indicator gave a moderately negative reading with the
close below the 1st support number. Short-term indicators on the defensive.
Consider selling an intraday bounce. Support should be encountered at 85.72 and
below there at 85.27. Market resistance is at 87.12 and then again at 88.07. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative.

 

LEAN HOGS RECAP

7/7/2004

August hogs closed sharply lower led by weakness
in cattle and long liquidation selling from fund traders. While still at a
discount to the cash market, the market is still under the negative influence of
Thursday’s reversal to the downside from a contract high. Ideas that pork
exports may not be as high as previously believed and expectations for summer
production to come in near 2-3% above last year to a new record high added to
the bearish tone. The 2-day lean index fell for the 5th day in a row. The Index
for the period ending July 2nd was down 30 cents to 79.41 as compared with 81.81
one week previous. Weekly average weights for Iowa/Minnesota for the week ending
July 3rd came in at 260.4 pounds as compared with 262.1 pounds the previous week
and 258.3 pounds last year. The sharp drop in weights is supportive. Slaughter
came in at 392,000 head as compared with trade expectations at 388,000 to
393,000 head. Traders are looking for the weekly cold storage report to show an
out-movement of 200,000-700,000 pounds.

Technical Outlook

#HOGS (AUG) 07/08/04: The market is in a bearish
position with the close below the 2nd swing support number. Resistance levels
comes in at 76.07 and 77.52 today, while support is around 74.12 and then 73.62.
The downside crossover (9 below 18) of the moving averages suggests a developing
short-term downtrend. The daily stochastic’s gave a bearish indicator with a
crossover down. The next downside objective is now at 73.62.

 

COCOA MARKET RECAP

7/7/2004

Cocoa climbed to its highest level since June 2nd
today as industry and fund buying led the charge after yesterday’s technical
reversal. With the British Pound rising to a 3-month high against the dollar,
New York cocoa futures were relatively cheap. Also noted was a lack of origin
selling, which traders take as evidence that producing nations have either sold
or hedged most of their production. The trade is also starting to talk about dry
weather that has occurred in Western Africa during June and early July, which
could potentially caused damage to the developing crops. Also mentioned was the
volatile situation in the Ivory Coast, a normally bullish factor which has been
pretty much ignored by the market throughout the past several months’ decline in
prices.

Technical Outlook

COCOA (SEP) 07/08/04 The gap upmove on the day
session chart is a bullish indicator for trend. The market has a bullish tilt
coming into today’s trade with the close above the 2nd swing resistance. Cocoa
should run into resistance at 1459 and above there at 1482 with support at 1379
and 1322. The daily stochastics have crossed over up which is a bullish
indication. The next upside target is 1482.00.

 

COFFEE MARKET RECAP

7/7/2004

September coffee bounced in quiet trade with
speculative buying seen as short-covering and also some buying from talk of
cooler weather moving into Brazil next week. German imports in April reached
1.59 million bags from 1.33 million the previous year. With the advanced harvest
and the temperature lows expected near 37 degrees, no damage is expected but the
first threat this winter along with the oversold condition after the recent
sharp losses helped to pressure. CSCE stocks fell for the second session in a
row, down 2,024 bags to 4.996 million bags with 149,565 bags pending review.

Technical Outlook

COFFEE (SEP) 7/8/04 The market setup is
supportive for early gains with the close over the 1st swing resistance. The
9-day RSI under 30 indicates the market is approaching oversold levels. Momentum
studies are declining, but have fallen to oversold levels. The next downside
objective is now at 70.90. The Coffee contract should run into resistance at
71.90 and above there at 72.10 with support at 71.3 and 70.90. The market’s
short-term trend is negative as the close remains below the 9-day moving
average.

 

SUGAR MARKET RECAP

7/7/2004

October sugar pushed to a new contract high with
the nearby futures moving to the highest level since March of 2003 as continued
solid buying from fund traders and growing concerns for tighter supplies for the
coming season helped support. Talk that Russia may be a more active buyer over
the near-term and continued bullish demand focus on India helped to support the
strong buying. August futures in London hit contract highs and nearby futures
moved to the highest level since February of 2003. The weak dollar added to the
bullish tone from fund traders.

Technical Outlook

#SUGAR (OCT) 07/08/04: The rally brought the
market to a new contract high. With the close over the 1st swing resistance
number, the market is in a moderately positive position. Swing resistance comes
in at 8.33, with support found at 8.03. 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 8.33. With a reading over 70, the 9-day RSI is approaching
overbought levels.

 

COTTON MARKET RECAP

7/7/2004

December cotton closed slightly lower on the
session and failed to experience follow-through buying from the reversal on
Tuesday. Traders hope that China will come in to book US cotton soon which might
help to stabilize the market and slow the recent steep downtrend but export
demand news does not seem to be picking up in spite of the sharp break in cotton
prices or the sharp drop in the US dollar. Traders are looking for a crop of
near 18.0-18.5 million bales as compared with projected usage at 17.3 million
bales.

Technical Outlook

#COTTON (OCT) 07/08/04: 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. Next resistance area comes in at 49.45 and then again at
50.33, while support is targeted at 48.25 and 47.93. Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
47.93. The 9-day RSI under 30 indicates the market is approaching oversold
levels. The downside closing price reversal on the daily chart is somewhat
negative.