If You’re Bullish, Consider This…
BOND MARKET RECAP
3/11/2005
March Bonds finished down 0-24 at 110-20, 0-13 off
the high and 0-04 up from the low.
March 10 Yr Treasury Notes finished down 0-160 at
108-230, 0-100 off the high and 0-025 up from the low.
The Treasury market was torn between two
opposing fundamental developments on Friday. In addition to a new record US
trade deficit reading, which in turn increases the concern of international
rotation away from U.S. instruments, the Treasury market also appeared to find
support, in the wake of the trade numbers, by speculation that intervention
buying off the falling Dollar would actually support prices. However in the big
picture the Treasury market continues to be confronted by dominating fears of a
rising supply of US government debt and the rising threat of inflation that is
being brought on by soaring energy prices down. Unfortunately, for those short
Treasuries, more near term downside action is not a given, as the technicals are
a little overdone. On the other hand, from a macro economic perspective it would
seem like the bears will generally control the big picture trend. In conclusion,
the Treasury market ends the week oversold technically, but fundamentally
remains firmly entrenched in the bear camp.
Technical Outlook
BONDS (JUN) 03/14/2005: The daily stochastics gave a
bearish indicator with a crossover down. Daily stochastics declining into
oversold territory suggest the selling may be drying up soon. The close under
the 18-day moving average indicates the longer-term trend could be turning down.
The market setup is somewhat negative with the close under the 1st swing
support. The next downside objective is now at 109-29. The next area of
resistance is around 110-31 and 111-18, while 1st support hits today at 110-05
and below there at 109-29.
TNOTES (JUN) 03/14/2005: A crossover down in the
daily stochastics is a bearish signal. Momentum studies are declining, but have
fallen to oversold levels. The close under the 18-day moving average indicates
the longer-term trend could be turning down. The swing indicator gave a
moderately negative reading with the close below the 1st support number. The
next downside objective is 108-070. The market is approaching oversold levels on
an RSI reading under 30. The next area of resistance is around 108-310 and
109-115, while 1st support hits today at 108-130 and below there at
108-070.
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STOCK INDICES RECAP
3/11/2005
March S&P finished down 8.5 at 1205.4, 12.9 off
the high and 2.9 up from the low.
March S&P E-Mini closed down 8.5 at 1205.5. This
was 3 up from the low and 13 off the high.
March Dow closed down 60 at 10813. This was 23 up
from the low and 92 off the high.
The U.S. stock market did a good job of downplaying
the extremely disappointing U.S. trade deficit report on Friday morning. In
fact, shortly after the disappointing trade report, the stock market actually
managed a temporary thrust into positive territory. However in the late morning
action, in the face of a significant reversal in energy prices, the market gave
up the gains quickly. It would seem that higher oil prices are going to be a
constant concern in conjunction with the threat of international diversification
and that’s not a very good combination for those that are bullish. Because the
stock market failed to respond favorably to the Intel earnings report in the
prior session, it is clear that sentiment in the marketplace favors the bear
camp.
Technical Outlook
S&P 500 (JUN) 03/14/2005: Momentum studies
trending lower at mid-range could accelerate a price break if support levels are
broken. The major trend has turned down with the cross over back below the
18-day moving average. The outside day down is somewhat negative. The market’s
close below the 1st swing support number suggests a moderately negative setup
for today. The next downside target is now at 1192.00. The next area of
resistance is around 1213.10 and 1223.60, while 1st support hits today at
1197.30 and below there at 1192.00.
SP EMINI (JUN) 03/14/2005: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The close below
the 18-day moving average is an indication the longer-term trend has turned
down. The outside day down is a negative signal. The market’s close below the
1st swing support number suggests a moderately negative setup for today. The
next downside target is now at 1191.75. The next area of resistance is around
1213.00 and 1223.75, while 1st support hits today at 1197.00 and below there at
1191.75.
NASDAQ (JUN) 03/14/2005: The daily stochastics have
crossed over down which is a bearish indication. Momentum studies trending lower
at mid-range should accelerate a move lower if support levels are taken out. The
close under the 18-day moving average indicates the longer-term trend could be
turning down. The downside closing price reversal on the daily chart is somewhat
negative. The market setup is somewhat negative with the close under the 1st
swing support. The next downside target is now at 1489.88. The next area of
resistance is around 1535.25 and 1556.87, while 1st support hits today at
1501.75 and below there at 1489.88.
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CURRENCY MARKET RECAP
3/11/2005
March US Dollar finished down 13 at 8139, 36 off the
high and 13 up from the low.
March Euro finished up 0.29 at 134.84, 0.26 off the
high and 0.59 up from the low.
March Euro Dollar closed down 0.025 at 96.52. This
was 0.005 up from the low and 0.02 off the high.
March Canadian Dollar closed down 0.08 at 83.09. This
was 0.49 up from the low and 0.16 off the high.
March British Pound finished up 0.36 at 191.65, 0.32
off the high and 0.51 up from the low.
March Swiss closed up 0.22 at 87.43. This was 0.47 up
from the low and 0.12 off the high.
March Japanese Yen closed up 0.17 at 96.95. This was
0.27 up from the low and 0.18 off the high.
The March Dollar index was lucky to have avoided a
bloodbath in the action Friday. In the wake of another record trade deficit
reading, weak U.S. equity prices and a falling U.S. Treasury market, it would
not have been surprising to see very aggressive selling come in against the
Dollar. However, the Swiss, Euro and Pound were all extensively overdone
technically and therefore somewhat without significant follow through buying
capacity. It would certainly seem as if the overall trend remains down in the
Dollar and that more significant declines are due off the trade deficit issue
and a host of other negatives. The most disappointing action of the day came
from the Canadian which seemed to produce some decent numbers but yet the buyers
stayed away from the currency.
Technical Outlook
YEN (JUN) 03/14/2005: The market now above the 40-day
moving average suggests the longer-term trend has turned up. Momentum studies
are trending higher but have entered overbought levels. The major trend could be
turning up with the close back above the 18-day moving average. With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
The next upside objective is 97.37. The next area of resistance is around 97.17
and 97.37, while 1st support hits today at 96.73 and below there at
96.48.
EURO (JUN) 03/14/2005: Daily stochastics have risen
into overbought territory which will tend to support reversal action if it
occurs. The major trend could be turning up with the close back above the 18-day
moving average. Market positioning is positive with the close over the 1st swing
resistance. The near-term upside objective is at 135.60. The market is
approaching overbought levels with an RSI over 70. The next area of resistance
is around 135.26 and 135.60, while 1st support hits today at 134.42 and below
there at 133.91.
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PRECIOUS METALS RECAP
3/11/2005
April Gold closed up 3.4 at 446.8. This was 5.2 up
from the low and 1.2 off the high.
March Silver finished up 0.043 at 7.57, 0.05 off the
high and 0.14 up from the low.
Initially we were disappointed with the upside
performance in gold and silver, following what could have been an extremely
bullish U.S. trade deficit report early Friday morning. In fact, many traders
fully expected to see a massive upside extension in gold, following a record
trade deficit reading. However, it is clear that general psychology towards the
metals remains bullish from a number of fronts and that should help the market
consolidate recent gains. In addition to ongoing flight to quality concerns
associated with the falling Dollar, we also think the metals markets are seeing
the increased chance of cost push inflation from the energy complex. We also
continued to see increased fund interest Friday in a number of commodity markets
and that should simply be another benefit to both the CRB index and the precious
metals.
Technical Outlook
SILVER (MAY) 03/14/2005: A positive indicator was
given with the upside crossover of the 9 & 18 bar moving average. Daily
stochastics have risen into overbought territory which will tend to support
reversal action if it occurs. The major trend could be turning up with the close
back above the 18-day moving average. The daily closing price reversal up on the
daily chart is somewhat positive. The close over the pivot swing is a somewhat
positive setup. The near-term upside target is at 773.8. The next area of
resistance is around 766.5 and 773.8, while 1st support hits today at 747.5 and
below there at 735.8.
GOLD (APR) 03/14/2005: Daily stochastics have risen
into overbought territory which will tend to support reversal action if it
occurs. The major trend could be turning up with the close back above the 18-day
moving average. 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. The near-term upside target is at 452.2. The market is approaching
overbought levels with an RSI over 70. The next area of resistance is around
450.0 and 452.2, while 1st support hits today at 443.6 and below there at
439.4.
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COPPER MARKET RECAP
3/11/2005
March Copper closed down 1.70 at 147.90. This was
2.30 up from the low and 1.50 off the high.
Initially copper prices forged a significant downside
breakout, but by mid-session the tried to rejected the early weakness. We
suspect that favorable stock price action among steel stocks, a lower Dollar and
a temporary bounce in US stock prices provided copper with some support.
However, it was clear by the end of the session that copper prices are going to
be negatively influenced by the macro economy undermine of rising oil prices and
concern for the US Dollar situation. In fact, with U.S. copper imports rising
sharply, at the same time that January copper exports from the U.S. were
reported to have declined sharply, it is understandable why some buyers wouldn’t
come in and buy the weakness on Friday.
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ENERGY MARKET RECAP
3/11/2005
April Crude Oil closed up 0.86 at 55.12. This was
1.47 up from the low and 0.18 off the high.
April Heating Oil closed up 2.73 at 150.07. This was
3.67 up from the low and 0.73 off the high.
April Unleaded Gas finished up 2.90 at 154.96, 0.44
off the high and 4.26 up from the low.
April Natural Gas finished up 0.01 at 6.89, 0.04 off
the high and 0.11 up from the low.
April Propane closed up 0.00 at 0.86. This was equal
to the low and equal to the high.
After starting out weaker on session Friday morning,
the crude-oil market managed a very impressive recovery off the lows. In fact,
given the magnitude of the gains off the lows on Friday morning, it is clear
that bull psychology is reconfirmed and still present in every session.
Apparently, there were some refinery problems in Europe, as well learn as some
of supportive dialogue from of the Nigerian oil minister. In the prior session,
we were a little surprised by the fact that energy prices failed to react to the
favorable demand projections for China and therefore part of the gains Friday
might been a delayed reaction to the information on Thursday. Some traders
suggested that a slight extension in cold weather, in several geographical areas
added to the bullish mentality on Friday.
Technical Outlook
CRUDE OIL (MAY) 03/14/2005: 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 cross over and close
above the 18-day moving average indicates the longer-term trend has turned up.
Market positioning is positive with the close over the 1st swing resistance. The
next downside target is now at 53.15. The market is approaching overbought
levels with an RSI over 70. The next area of resistance is around 55.94 and
56.44, while 1st support hits today at 54.30 and below there at
53.15.
UNLEADED (MAY) 03/14/2005: Momentum studies trending
lower from overbought levels is a bearish indicator and would tend to reinforce
lower price action. The major trend could be turning up with the close back
above the 18-day moving average. The upside daily closing price reversal gives
the market a bullish tilt. With the close over the 1st swing resistance number,
the market is in a moderately positive position. The next downside target is
149.31. The next area of resistance is around 157.30 and 158.70, while 1st
support hits today at 152.61 and below there at 149.31.
HEATING OIL (MAY) 03/14/2005: 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 cross over and
close above the 18-day moving average indicates the longer-term trend has turned
up. A positive setup occurred with the close over the 1st swing resistance. The
next downside objective is now at 144.94. The 9-day RSI over 70 indicates the
market is approaching overbought levels. The next area of resistance is around
152.26 and 153.73, while 1st support hits today at 147.87 and below there at
144.94.
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CORN MARKET RECAP
3/11/2005
May Corn finished up 4 3/4 at 224 3/4, 1/4 off
the high and 5 up from the low. December Corn closed up 3 1/2 at 245. This was 4
up from the low and 1 off the high.
The market continues to find solid buying support
from fund traders with talk of fund buying associated with inflationary hedge
purchases of dollar denominated commodities to protect against a declining US
dollar. Scattered producer selling was noted on mostly steady to lower country
basis levels as producers take advantage of the rally to move some grain. There
were no deliveries against the March contract this morning. May corn closed 7
1/2 cents higher on the week. Commodity index funds were noted buyers of near
8000 contracts yesterday and more buying is supporting the market today. The
Commitment-of-Traders report for release after the close will give traders a
gauge on the net long position of fund traders as of March 8th. Support for May
corn comes in at 220 1/2 with 229 1/2 as next resistance.
Technical Outlook
CORN (MAY) 03/14/2005: The daily stochastics have
crossed over up which is a bullish indication. Momentum studies are trending
higher but have entered overbought levels. The cross over and close above the
18-day moving average is an indication the longer-term trend has turned
positive. The market setup is supportive for early gains with the close over the
1st swing resistance. The near-term upside objective is at 228 3/4. With a
reading over 70, the 9-day RSI is approaching overbought levels. The next area
of resistance is around 227 1/4 and 228 3/4, while 1st support hits today at 222
1/4 and below there at 218 1/2.
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SOY COMPLEX RECAP
3/11/2005
May Soybeans finished up 23 1/4 at 662 1/2, 3 1/2 off
the high and 20 1/2 up from the low. November Soybeans closed up 10 at 634 1/2.
This was 8 1/2 up from the low and 3 1/2 off the high.
May Soymeal closed up 10.9 at 196.0. This was 9.0 up
from the low and 0.5 off the high.
March Soybean Oil finished up 0.41 at 23.96, 0.17 off
the high and 0.31 up from the low.
Fund traders were aggressive buyers again today as
there is more and more talk that index funds have a goal to own
dollar-denominated commodities as a hedge against inflation and against a
potential continued downtrend in the dollar. Funds were noted buyers of near
9000 contracts into the mid-session. The CRB Index scored new highs as well.
Brazil’s Vegetable Oils Industry Association (Abiove) projected the Brazil
soybean crop at just 53.9 million tons today as compared with the March 2nd
forecast of 58.2 million tons and the January forecast of 61.5 million tons.
Rains are expected in the dry areas of southern Brazil for the weekend which
might help ease deterioration. May Soybeans closed 32 1/4 cents higher on the
week. There were 42 contracts delivered against the March soybeans this morning
but a strong commercial stopper took all. There were 308 contracts delivered
against the March meal this morning but a strong commercial stopper took 206 of
the total. Soybean basis levels were steady to weaker in the country with some
producer selling noted. For the NOPA crush report on Monday traders are looking
for February crush near 128-131 million bushels as compared with January crush
at 141.4 million bushels. Support for May soybeans comes in at 655 and 646 with
671 as next resistance.
Technical Outlook
BEANS (MAY) 03/14/2005: Momentum studies are trending
higher but have entered overbought levels. The major trend could be turning up
with the close back above the 18-day moving average. 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. The near-term upside objective is at
682 1/4. The market is approaching overbought levels with an RSI over 70. The
next area of resistance is around 674 1/2 and 682 1/4, while 1st support hits
today at 650 1/2 and below there at 634 1/4.
MEAL (MAY) 03/14/2005: The daily stochastics have
crossed over up which is a bullish indication. Daily stochastics have risen into
overbought territory which will tend to support reversal action if it occurs.
The market now above the 18-day moving average suggests the longer-term trend
has turned up. If yesterday’s gap higher on the day session chart holds,
additional buying could develop this session. 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. The next upside objective is 205.3.
With a reading over 70, the 9-day RSI is approaching overbought levels. The next
area of resistance is around 202.6 and 205.3, while 1st support hits today at
193.6 and below there at 187.3.
BEANOIL (MAY) 03/14/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The cross over and close above
the 18-day moving average is an indication the longer-term trend has turned
positive. With the close over the 1st swing resistance number, the market is in
a moderately positive position. The next upside objective is 24.67. The market
is becoming somewhat overbought now that the RSI is over 70. The next area of
resistance is around 24.36 and 24.67, while 1st support hits today at 23.72 and
below there at 23.40.
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WHEAT MARKET RECAP
3/11/2005
May Wheat finished up 10 at 358, 2 1/2 off the
high and 11 up from the low. July Wheat closed up 11 at 366. This was 12 1/2 up
from the low and 1 off the high.
Fund buying continues to support solid gains in wheat
and all of the grain markets. Active buying in new crop out-of-the-money calls
helped pull futures higher. There seems to be a lack of near-term demand for US
wheat with optional origin tenders this week going to France, Australia and
others but the market continues to find aggressive buying from index funds. May
wheat closed 20 1/2 cents higher on the week. Weather conditions look
non-threatening to the US wheat crop and crop conditions in the hard red areas
look favorable for the start of the growing season. The forecast looks somewhat
dry over the next week but soil moisture is still good. Soft red areas have
faired a little less favorable over the winter with more of a freeze/thaw cycle
but there are still no significant problems. Poor weather in the Ukraine for
March may have nipped up to 10% of the winter crops. The CRB Index moved to a
new high again today to the highest levels since late 1980. There were no
deliveries against March wheat today. May wheat support comes in at 348 1/2 with
362 1/2 as next resistance.
Technical Outlook
WHEAT (MAY) 03/14/2005: Studies are showing positive
momentum but are now in overbought territory, so some caution is warranted. The
major trend could be turning up with the close back above the 18-day moving
average. Market positioning is positive with the close over the 1st swing
resistance. The next upside objective is 369 1/4. With a reading over 70, the
9-day RSI is approaching overbought levels. The next area of resistance is
around 364 3/4 and 369 1/4, while 1st support hits today at 351 1/4 and below
there at 342 1/2.
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LIVE CATTLE RECAP
3/11/2005
April Live Cattle finished down 1.60 at 89.10, 1.40
off the high and 0.25 up from the low.
March Feeder Cattle closed down 0.65 at 104.90. This
was 0.85 up from the low and 0.45 off the high.
The cattle market pushed sharply lower as buyers of
the past week took cover after the National Meat Association filed an emergency
appeal of the Montana judge’s decision to block the USDA plan to open the border
to shipments of young cattle. The appeal seeks to protect packers from imminent
economic collapse. Traders are now nervous that the courts could shift the
supply outlook overnight. The selling drove April cattle below 89.00 as compared
with cash trade at $93.00 this week and talk that feedlots are current with
marketings after the active trade of the past two weeks. In addition, packers
will need more cattle next week with slaughter running above trade expectations
this week. Boxed-beef cut-out values at mid-session were up $1.55 to $155.11 as
compared with $143.89 last week. Slaughter came in at 114,000 head from trade
expectations for 107,000-116,000 head.
Technical Outlook
CATTLE (APR) 03/14/2005: 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 major trend could be turning up with the close back above the
18-day moving average. The gap lower on the day session chart is bearish and
puts the market on the defensive. The defensive setup, with the close under the
2nd swing support, could cause some early weakness. The next downside target is
now at 87.750. The next area of resistance is around 89.920 and 91.020, while
1st support hits today at 88.300 and below there at 87.750.
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LEAN HOGS RECAP
3/11/2005
April Lean Hogs finished down 0.20 at 72.37, 0.72 off
the high and 0.37 up from the low.
March Pork Bellies closed up 2.50 at 88.00. This was
equal to the low and 0.20 off the high.
April hogs closed lower from weaker cash tone and
from massive fund rolling to the June futures. June hogs closed 182 higher on
the session but still closed 57 lower on the week. The new contract high and
lower close on the week could attract technical selling early next week. Hogs
found support from a bounce in loins on Thursday night and from ideas that the
sell-off was overdone. Peoria hogs traded $2.50 lower on the day. The 2-day lean
index for the period ending March 9th came in at 74.01, up 1.03 on the session
and up from 70.42 last week at this time. Slaughter came in at 357,000 head from
trade expectations for 365,000-376,000 head. This is the 4th session in a row in
which slaughter came in well below expectations which suggest poor
demand.
Technical Outlook
HOGS (APR) 03/14/2005: Negative momentum studies in
the neutral zone will tend to reinforce lower price action. The close below the
18-day moving average is an indication the longer-term trend has turned down. It
is a slightly negative indicator that the close was lower than the pivot swing
number. The next downside objective is now at 71.370. The next area of
resistance is around 72.920 and 73.550, while 1st support hits today at 71.850
and below there at 71.370.
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COCOA MARKET RECAP
3/11/2005
May Cocoa finished up 51 at 1804, 38 off the high and
3 up from the low.
The cocoa market seemed to catch a number of bullish
developments into the opening on Friday morning. However, the market somewhat
altered its strong bullish opinion into the close but still prices finished
significantly above the prior day’s highs. While funds were thought to be behind
the aggressive thrust higher we suspect that lower U.S. January cocoa imports
and reduce Ghana purchases from growers, gave traders enough incentive to get
long even at moderately higher prices. In the end we are not sure what
specifically sparked the rally but a big increase in U.S. cocoa imports probably
combined with fund buying off a fresh contract high to vault prices higher. In
conclusion, the action Friday gives the bull camp credibility.
Technical Outlook
COCOA (MAY) 03/14/2005: 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 cross over and close
above the 18-day moving average is an indication the longer-term trend has
turned positive. If yesterday’s gap higher on the day session chart holds,
additional buying could develop this session. The market has a bullish tilt
coming into today’s trade with the close above the 2nd swing resistance. The
next downside target is 1772. The 9-day RSI over 70 indicates the market is
approaching overbought levels. The next area of resistance is around 1824 and
1853, while 1st support hits today at 1784 and below there at 1772.
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COFFEE MARKET RECAP
3/11/2005
May Coffee closed down 1.45 at 136.65. This was 0.75
up from the low and 2.85 off the high.
While the May coffee market managed another new
contract high the coffee market ends the week with a significantly overbought
short term technical condition as the market forged massive gains on the week!
Fortunately for the bull camp the coffee market forged the majority of the gains
after the COT report mark off and hat might mitigate the magnitude of the small
spec and fund long that will confront the market on Monday morning. With some
retail coffee makers announcing price increases and the market getting a little
out of hand early in the action Friday it is not surprising that some fund
banked profits and moved to the sidelines during the action Friday. The dry
conditions in both Brazil and Vietnam probably contributed to the recent gains
but the gains continue to be the result of long term gradual supply tightening
as opposed to some specific crop setback.
Technical Outlook
COFFEE (MAY) 03/14/2005: Daily stochastics have risen
into overbought territory which will tend to support reversal action if it
occurs. The cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. The downside closing price
reversal on the daily chart is somewhat negative. It is a slightly negative
indicator that the close was under the swing pivot. The next upside objective is
140.75. The market is approaching overbought levels with an RSI over 70. The
next area of resistance is around 138.45 and 140.75, while 1st support hits
today at 134.90 and below there at 133.60.
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SUGAR MARKET RECAP
3/11/2005
May Sugar closed up 0.20 at 9.17. This was 0.16 up
from the low and 0.02 off the high.
The sugar market mounted a very impressive upward
extension Friday and would seem to be catching fund buying interest and
potentially a little forced commercial buying. In other words, those
anticipating future needs might now be pulled into the fray rather than risk
having to pay up after a fresh contract high. Since the sugar is coming off a
significant March technical balancing we suspect that the market retains quite a
bit of buying potential. Even more surprising is the fact that sugar prices
managed the impressive run in the face of Press reports that indicated heavy
producer selling. In conclusion, the buying Friday was powerful from a number of
different angles.
Technical Outlook
SUGAR (MAY) 03/14/2005: Positive momentum studies in
the neutral zone will tend to reinforce higher price action. The market now
above the 18-day moving average suggests the longer-term trend has turned up.
The market’s close above the 2nd swing resistance number is a bullish
indication. The next upside objective is 9.31. The next area of resistance is
around 9.26 and 9.31, while 1st support hits today at 9.08 and below there at
8.96.
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COTTON MARKET RECAP
3/11/2005
May Cotton finished up 1.00 at 53.65, 0.15 off the
high and 1.50 up from the low.
Not to be left out of the fund buying interest the
cotton market managed a new contract high probe but failed to sustain the gains
for a new contract high close. Reports of strong Indian textile exports is
expected to fuel increased consumption by that country and that simply joins
into the generally bullish wave of interest that seeped into all AG markets on
Friday. While some doubt that the cotton market fundamentals justify a
significant run up in cotton prices we suspect that a rising tide will lift all
boats and the cotton market will be no exception. Complaints from a US Trade
Association regarding Chinese imports is probably unimportant but given the
explosive political environment one can rule out surprise political
headlines.
Technical Outlook
COTTON (MAY) 03/14/2005: Studies are showing positive
momentum but are now in overbought territory, so some caution is warranted. The
cross over and close above the 18-day moving average indicates the longer-term
trend has turned up. With the close over the 1st swing resistance number, the
market is in a moderately positive position. The next upside objective is 54.96.
With a reading over 70, the 9-day RSI is approaching overbought levels. The next
area of resistance is around 54.47 and 54.96, while 1st support hits today at
52.83 and below there at 51.67.