If You’re Long Bonds, Consider This…

Technical Outlook

BONDS (MAR) 01/26/04: 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. The close below the 2nd
swing support number puts the market on the defensive. Near-term resistance for
bonds is at 112.25 and then again at 114.07, while swing support hits at 110.24
and below there at 110.05. The market’s close below the 9-day moving average is
an indication the short-term trend remains negative. 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
110.05.

T-NOTES(MAR) The outside day down is a negative
signal. The daily closing price reversal down puts the market on the defensive.
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
113.01. The market is in a bearish position with the close below the 2nd swing
support 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 114.18 and
then again at 115.14, while swing support hits at 113.11 and below there at
113.01. The market’s short-term trend is negative as the close remains below the
9-day moving average.

 

STOCK INDICES RECAP

1/23/2004

The stock market finally showed signs of mounting
a decent correction as the economic report slate was empty and the market was
deservedly disappointed by the Microsoft earnings report. The fact that the ECB
might be poised to cut interest rates was another disappointment to the market
as that suggests the world recovery isn’t quite as strong as the stock market
has been factoring. Fortunately the stock market wasn’t significantly overbought
and that should mitigate the near term corrective action.

Technical Outlook

S&P500 (MAR) 01/26/04: The market’s close below
the pivot swing number is a mildly negative setup. Underlying support comes in
at 1133.65 and 1127.63, with overhead resistance at 1147.35 and 1155.03. The
market’s short-term trend is positive on a close above the 9-day moving average.
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 1127.63.

S&P E-Mini (MAR): The key reversal down puts the
market on the defensive. The market made a new contract high on the rally.
Stochastics turning bearish at overbought levels will tend to support lower
prices if support levels are broken. The next downside objective is 1127.13. The
close below the 1st swing support could weigh on the market. Near-term
resistance for the S&P Mini is at 1147.00 and then again at 1155.13, while swing
support hits at 1133.00 and below there at 1127.13. A positive signal for trend
short-term was given on a close over the 9-bar moving average.

NASDAQ (MAR) 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 1547.00 and above there at
1562.00 with support at 1519.00 and 1506.00. 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
1506.0.

MINI DOW (MAR) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. The market should
run into resistance at 10613 and above there at 10686 with support at 10484 and
10428. 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 10428. The close below the 2nd swing
support number puts the market on the defensive.

 

CURRENCY MARKET RECAP

1/23/2004

The mere suggestion that the ECB might consider
cutting interest catapults the market into a frenzy of activity. The initial
reaction was to think that the Dollar has turned, while the next reaction was to
fear that some US Treasury supply might be thrown back onto the market. In both
reactions it would seem that the up trend in the Euro is called into question
and that the downtrend in the Dollar is at least temporarily suspended. The most
significant reaction of the session was the damage done to the Canadian, as it
looks to be headed into a massive washout.

Technical Outlook

YEN (MAR): The market’s close above the 9-day
moving average suggests the short-term trend remains positive. A new contract
high was made on the rally. The downside closing price reversal on the daily
chart is somewhat negative. It is a slightly negative indicator that the close
was lower than the pivot swing number. Swing resistance is targeted at 94.54 and
above there at 94.88, with the yen finding support around 93.99 and below there
at 93.78. Positive momentum studies in the neutral zone will tend to reinforce
higher price action. The next upside target is 94.88.

EURO (MAR): The daily stochastic’s gave a bearish
indicator with a crossover down. The next downside objective is now at 1.2459.
The market is in a bearish position with the close below the 2nd swing support
number. Swing support for the Euro comes in at 1.2459, with overhead resistance
at 1.2739. The downside crossover (9 below 18) of the moving averages suggests a
developing short-term downtrend. The gap down on the day session chart is
bearish with more selling pressure possible today.

 

PRECIOUS METALS RECAP

1/23/2004

A major turn in the Dollar really undermined the
gold market and could lead to wholesale selling when one considers the magnitude
of the speculative long in gold. It is important to realize that a falling
Dollar has been a primary force behind the bull case in gold and now that factor
might be reversing. With the gold weaker and silver higher it almost seemed like
the trade was spreading the two markets against each other. It is also possible
that silver isn’t as influenced by Dollar action as the gold market.

Technical Outlook

SILVER (MAR): With the close higher than the
pivot swing number, the market is in a slightly bullish posture. Initial support
for silver is at 630.3 and below there at 622.9 with resistance likely at 635.5
and 641.8. The market’s close below the 9-day moving average is an indication
the short-term trend remains negative. Negative momentum studies in the neutral
zone will tend to reinforce lower price action. The next downside target is
622.9.

GOLD (APR): Support for gold today comes in near
404.25, while resistance is pegged at 415.05. Daily stochastics are trending
lower, but have declined into oversold territory. The next downside objective is
now at 404.25. The market’s close below the pivot swing number is a mildly
negative setup. The market’s short-term trend is negative as the close remains
below the 9-day moving average.

 

COPPER MARKET RECAP

1/23/2004

Despite ongoing concerns of the bird flu problem
in Asia, the potential need to cut interest rates in Europe and a sloppy US
equity market the copper market managed to post a minor gain on the session.
Even with the Chinese fully on holiday the copper market appeared to find enough
buyers foster an upside probe. So far the market hasn’t attached too much
attention to the potential for another Canadian labor standoff but that would
certainly provide a fresh reason to buy copper.

 

ENERGY MARKET RECAP

1/23/2004

Once again the crude oil market managed a fresh
contract high again and did so without much in the way of additional bullish
weather information. Even the natural gas market managed to climb in the face of
news that the US might authorize extensive drilling in the Gulf of Mexico. The
anticipated mild weather next week is apparently a short-lived affair and many
traders expect OPEC dialogue to boost prices. The rising Dollar is also seen an
indirect support to energy prices as a higher Dollar might lower the priority of
changing the way OPEC crude oil is priced to the world.

Technical Outlook

CRUDE OIL (MAR): The rally brought the market to
a new contract high. It is a mildly bullish indicator that the market closed
over the pivot swing number. Support for crude is keyed on 34.64 and below there
at 34.35, with resistance pegged at 35.24 and 35.55. 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 35.55.

UNLEADED GAS (MAR): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 103.99. It is a slightly negative indicator that the close
was lower than the pivot swing number. Resistance today is at 103.99, while
support should be found around 100.59. The market’s close above the 9-day moving
average suggests the short-term trend remains positive.

HEATING OIL (MAR):The market’s close below the
pivot swing number is a mildly negative setup. Heating oil should encounter
support around 98.28, with resistance is at 101.78. 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 101.78. The rally brought the market to a new contract high. The
daily closing price reversal down puts the market on the defensive.

 

CORN MARKET RECAP

1/23/2004

The corn market looked like it might be able to
forge a move into new high ground early in the session but in the end failed to
muster the long interest. While weather in Argentina is partially supportive it
wasn’t bullish enough to prevent some players from jumping out of longs because
of the fear that the COT report would show an overly long positioning. The
market is particularly concerned about the fund long growing impatient with
positions and that position is massive. The delayed corn export sales
information was bullish to corn with the 999,000-ton tally coming in slightly
above expectations. The market also saw a report early in the session that the
USDA sold 110,000 metric tons of corn to an unknown destination and that was
supportive.

Technical Outlook

CORN (MAR) 01/26/04: Momentum studies are
trending higher, but have entered overbought levels. The near-term upside
objective is at 281 1/2. The market’s close above the 2nd swing resistance
number is a bullish indication. Market resistance comes in at 281 1/2 today,
with support at 271 1/2. 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. 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

1/23/2004

After hitting a new contract high, May soybeans
closed 1 1/4 cents lower on the session and down 3/4 of a cent on the week. The
daily and weekly closing price reversals are a bearish technical sign of a top.
Forecast for hot and dry weather in Argentina helped support the early surge
higher to new contract highs but fears of a declining demand structure due to
the lower feed demand from Asia and from China moves to delay import demand to
next year helped trigger the long liquidation selling. In addition, weekly
export sales news was bearish. Old crop soybean sales came in at a net 13,500
tons for the week as compared with 70,300 tons necessary each week to reach the
USDA projection. Meal exports remain solid at 79,100 tons as compared with
18,600 tons necessary each week to reach the USDA projection. Cumulative meal
sales have reached 82.1% of the USDA forecast for the season as compared with
55.6% on average for this time of the year.

Technical Outlook

SOYBEANS (MAR) 01/26/04: A new contract high was
made on the rally. The downside closing price reversal on the daily chart is
somewhat negative. It is a slightly negative indicator that the close was lower
than the pivot swing number. The next area of resistance is around 850 and 863
1/4, while 1st support hits today at 828 1/2 and below there at 820 1/4. The
market’s close above the 9-day moving average suggests the short-term trend
remains positive. 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 820 1/4.

MEAL (MAR): Momentum studies are trending higher,
but have entered overbought levels. The near-term upside objective is at 271.4.
The rally brought the market to a new contract high. First resistance comes in
at 267.5, with support at 261.1. 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 (MAR): The market’s close below the
9-day moving average is an indication the short-term trend remains negative.
Negative momentum studies in the neutral zone will tend to reinforce lower price
action. The next downside target is 28.72. With the close higher than the pivot
swing number, the market is in a slightly bullish posture. The daily closing
price reversal up is positive. Daily swing resistance is found at 29.69 and
above there at 30.04. Support should be encountered at 29.03 and 28.72.

 

WHEAT MARKET RECAP

1/23/2004

March wheat closed 5 1/2 lower on the session and
down 16 1/2 cents on the week as a very bullish weekly export number was not
even enough to slow the long liquidation selling. Weekly export sales came in at
a whopping 1.84 million tons as compared with trade expectations at
650,000-850,000 tonnes. Old crop sales were 1.08 million tons as compared with
310,200 bales necessary each week to reach the USDA projection. Cumulative sales
have reached 80.2% of the USDA forecast for the season as compared with 70.1% on
average for this time of the year. Active long liquidation selling on fears that
the COT reports will show a large speculative net long position in the grain
markets added to the bearish tone.

Technical Outlook

WHEAT (MAR) 01/26/04: Short-term indicators on
the defensive. Consider selling an intraday bounce. The swing indicator gave a
moderately negative reading with the close below the 1st support number. Look
for near-term support at 374 1/2 and below there at 370 1/2, with resistance
levels at 388 and 397 1/2. The market’s close below the 9-day moving average is
an indication the short-term trend remains negative. Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The next downside
target is 370 1/2.

 

LIVE CATTLE RECAP

1/23/2004

The market fell as much as the daily limit with
aggressive long liquidation hitting futures as a perception that packer demand
might slow now that the pipeline is refilled helped trigger the selling. Talk of
steady cash markets at best for next week and lower beef prices at mid-session
helped confirm the bearish suspicions. A lack of news to believe that the export
ban will end soon and the outlook for an increasing supply of market-ready
cattle in the weeks ahead added to the bearish tone. Beef production for the
week was up 4.6% from last week and down 9.4% from last year. Slaughter came in
at the low end of estimates at 127,000 head.

Technical Outlook

CATTLE (APR) 01/26/04: Studies are showing
positive momentum, but are now in overbought territory so some caution is
warranted. The next upside target is 77.25. The swing indicator gave a
moderately negative reading with the close below the 1st support number. Support
should be encountered at 74.15 and below there at 73.55. Market resistance is at
76.00 and then again at 77.25. The market’s close below the 9-day moving average
is an indication the short-term trend remains negative.

 

LEAN HOGS RECAP

1/23/2004

The market held support on early weakness with
April hogs closing 27 higher on the session, 85 up from the lows and back up
over the 40-day moving average. Cash hogs were steady. Pork production for the
week was down 2.5% from last week and up 7.6% from last year but this was a
holiday shortened week. Slaughter came in at the low end of estimates at 383,000
head but this seems to be a function of lower supply as compared with weaker
demand. However, the drop in loins late in the week helped to pinch packer
profit margins. The weather helped to limit marketings as well.

Technical Outlook

HOGS (APR) 01/26/04: The market’s close below the
pivot swing number is a mildly negative setup. Resistance levels comes in at
57.40 and 57.65 today, while support is around 56.50 and then 55.85. The upside
closing price reversal on the daily chart is somewhat bullish. 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
55.85.

 

COCOA MARKET RECAP

1/23/2004

A major disappointment in cocoa as the grind came
in down 3% off expectations that called for an increase of 10%. With cocoa
prices holding significantly off the October lows and recently approaching the
January highs it would seem that the market has plenty of downside potential in
the near term. The trade also noted origin selling, which simply adds to the
bearish tilt in the marketplace. With a soaring US Dollar it is possible that US
cocoa could be seen as overly expensive relative to London cocoa.

Technical Outlook

COCOA (MAR)01/26/04 There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. Cocoa should run into resistance at 1635 and above there at 1671
with support at 1584 and 1569. Studies are showing positive momentum, but are
now in overbought territory so some caution is warranted. The next upside target
is 1671.25.

 

COFFEE MARKET RECAP

1/23/2004

May coffee closed 75 lower on the session but up
335 points on the week. Tightness in the Brazil cash market and uncertainty over
the size of the 2004/2005 coffee crop are factors which supported the rally on
the week. Traders expect January exports for Brazil to come in near 38% down
from last years pace. Fears that the afternoon Commitment-of-Traders report will
show an overbought condition and follow-through technical selling from
Wednesday’s reversal from a contract high helped to trigger the long liquidation
selling. Good rains in Brazil in the forecast for the next week helped limit
gains. CSCE exchange stocks were down 6,128 bags to 4.372 million with 79,334
bags pending review.

Technical Outlook

COFFEE (MAR)1/26/04 The market tilt is slightly
negative with the close under the pivot. The 9-day RSI over 70 indicates the
market is approaching overbought levels. Studies are showing positive momentum,
but are now in overbought territory so some caution is warranted. The near-term
upside objective is at 76.15.The Coffee contract should run into resistance at
75.30 and above there at 76.15 with support at 73.7 and 72.95. The market’s
short-term trend is positive on a close above the 9-day moving average.

 

SUGAR MARKET RECAP

1/23/2004

The fundamental set-up for the market remains
quite negative as the drop in prices in Brazil could move the focus of supplies
in Brazil from the domestic market to the world market. Increased exports from
Brazil is a factor which is likely to drag world prices lower. With private
stocks of ethanol in Brazil thought to be at the highest level since 1999 and
excess exportable supplies for this season, the outlook for another bumper crop
for 2004 could trigger more selling from Brazil onto the exchange. In addition,
heavy rains in northeast Brazil near the regions largest cane producing area may
contribute to a larger cane harvest as the rains could help increase the weight
of the cane. The lack of activity in the cash market is beginning to drag
futures down as well as key buyers have been on the sidelines. March sugar
closed 7 lower on the session and down 2 points on the week.

Technical Outlook

SUGAR (MAR) 01/26/04: The market’s close below
the 1st swing support number suggests a moderately negative setup for today.
Swing resistance comes in at 5.91, with support found at 5.63. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. 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 5.91.

 

COTTON MARKET RECAP

1/23/2004

May cotton sputtered near unchanged on the day
for most of the session as the market seemed to consolidate the gains on the
week. Weekly export sales failed to give the market much direction and came in
at 166,000 bales as compared with trade expectations at 130,000-180,000 bales as
compared with 113,500 bales necessary each week to reach the USDA projection.
Cumulative sales have reached 73% of the USDA forecast for the season as
compared with 80% on average for this time of the year. Shipments came in at
354,600 bales as compared with trade expectations at 290,000-325,000 bales.

Technical Outlook

COTTON (MAR) 01/26/04: 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 76.17 and then again at 76.31,
while support is targeted at 75.72 and 75.41. Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 76.31. ORANGE JUICE (MAR)1/26/04 The market has a slightly
positive tilt with the close over the swing pivot. Orange Juice should run into
resistance at 63.05 and above there at 64.00 with support at 61.55 and 61.00.
The market’s short-term trend is negative as the close remains below the 9-day
moving average. Momentum studies are declining, but have fallen to oversold
levels. The next downside objective is now at 61.