If You’re Sitting On The Sidelines, Chances Are This Is Why

Technical Outlook

#BONDS (SEP) 6/18/2004: The outside day up is
somewhat positive. The daily closing price reversal up is a positive indicator
that could support higher prices. The market setup is supportive for early gains
with the close over the 1st swing resistance. Near-term resistance for bonds is
at 106.02 and then again at 106.10, while swing support hits at 104.31 and below
there at 104.04. A positive signal for trend short-term was given on a close
over the 9-bar moving average. Stochastics are at mid-range, but trending higher
which should reinforce a move higher if resistance levels are taken out. The
next upside objective is 106.10. Daily studies suggest buying dips today.

T-NOTES(SEP) The outside day up is a positive
signal. The upside closing price reversal on the daily chart is somewhat
bullish. 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 109.05. It is a mildly bullish indicator that the market closed
over the pivot swing number. Near-term resistance for the T-Notes is at 108.31
and then again at 109.05, while swing support hits at 108.07 and below there at
107.22. The market’s short-term trend is positive on a close above the 9-day
moving average.

 

STOCK INDICES RECAP

6/17/2004

The stock market apparently isn’t completely
ready to dismiss the threat of rising interest rates or rising energy prices as
the market saw selling and profit taking off outside market action. We also
think that fears of the June 30th hand over are also keeping investors on the
sidelines and until it is clear that the US will be able to stand back from Iraq
a little many buyers won’t buy in, even if US economic information continues to
be good. US economic information was good Thursday but maybe a 14 month high in
the PPI countervailed the benefit of the numbers.

Technical Outlook

#S&P500 (SEP) 6/18/2004: It is a slightly
negative indicator that the close was under the swing pivot. Underlying support
comes in at 1127.90 and 1123.70, with overhead resistance at 1134.90 and
1137.70. The close below the 9-day moving average is a negative short-term
indicator for trend. Momentum studies trending lower from overbought levels is a
bearish indicator and would tend to reinforce lower price action. The next
downside objective is now at 1123.70.

S&P E-Mini (SEP): 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
1122.81. It is a slightly negative indicator that the close was lower than the
pivot swing number. Near-term resistance for the S&P Mini is at 1134.88 and then
again at 1138.31, while swing support hits at 1127.13 and below there at
1122.81. The market’s close above the 9-day moving average suggests the
short-term trend remains positive.

NASDAQ (SEP) A negative signal for trend
short-term was given on a close under the 9-bar moving average. There could be
some early pressure today given the market’s negative setup with the close below
the 2nd swing support. The market should run into resistance at 1477.50 and
above there at 1487.00 with support at 1460.50 and 1453.00. Momentum studies
trending lower at mid-range could accelerate a price break if support levels are
broken. The next downside objective is 1453.00.

MINI DOW (MAR) The close above the 9-day moving
average is a positive short-term indicator for trend. The market should run into
resistance at 10391 and above there at 10412 with support at 10337 and 10304.
Momentum studies trending lower from overbought levels is a bearish indicator
and would tend to reinforce lower price action. The next downside target is now
at 10304. It is a slightly negative indicator that the close was under the swing
pivot.

 

CURRENCY MARKET RECAP

6/17/2004

The Dollar just can’t seem to muster a consistent
track and also doesn’t seem to be tracking off of interest rate potentials or
growth potentials. From the numbers released Thursday morning it is clear that
the US and UK continue to grow faster than the Euro zone where recently
Industrial production numbers were significantly softer than expectations. In
the UK retail sales figures were significantly stronger than expected and
therefore the Pound fundamentals look pretty strong.

Technical Outlook

#CURRENCIES 6/18/2004: YEN (SEP): A positive
signal for trend short-term was given on a close over the 9-bar moving average.
The market has a bullish tilt coming into today’s trade with the close above the
2nd swing resistance. Swing resistance is targeted at 91.85 and above there at
92.14, with the yen finding support around 91.28 and below there at 91.00.
Stochastics turning bearish at overbought levels will tend to support lower
prices if support levels are broken. The next downside objective is 91.00.

EURO (SEP): Stochastics trending lower at
midrange will tend to reinforce a move lower especially if support levels are
taken out. The next downside target is now at 1.1966. The defensive setup, with
the close under the 2nd swing support, could cause some early weakness. Swing
support for the Euro comes in at 1.1966, with overhead resistance at 1.2106. The
close below the 9-day moving average is a negative short-term indicator for
trend. More selling pressure is likely given yesterday’s gap lower price action
on the day session chart.

 

PRECIOUS METALS RECAP

6/17/2004

After some early gains the gold market softened
and that probably resulted from the Dollar recovery. Apparently gold and silver
are boats without rudders, as the market can’t decide whether to be cheered by
the improving economy or fearful of rising interest rates. A number of traders
appear to be discouraged by the lack of economic uncertainty and some are
disappointed by the choppy price action. In order to cause a fresh wave of
selling in gold we suspect that the Dollar will have to manage a rise above
90.77.

Technical Outlook

#P-METALS 6/18/2004: SILVER (SEP): The market now
above the 40-day moving average suggests the longer-term trend is up. The market
has a bullish tilt coming into today’s trade with the close above the 2nd swing
resistance. Initial support for silver is at 584.8 and below there at 570.9 with
resistance likely at 591.8 and 603.8. A positive signal for trend short-term was
given on a close over the 9-bar moving average. A bullish signal was given with
an upside crossover of the daily stochastics. The next upside objective is
591.8.

GOLD (AUG): Support for gold today comes in near
384.45, while resistance is pegged at 392.85. Stochastics trending lower at
midrange will tend to reinforce a move lower especially if support levels are
taken out. The next downside target is now at 384.45. There could be more upside
follow through since the market closed above the 2nd swing resistance. The close
above the 9-day moving average is a positive short-term indicator for trend. The
cross over and close above the 40-day moving average is an indication the
longer-term trend is up.

 

COPPER MARKET RECAP

6/17/2004

The copper market did manage to take out the
prior days highs and seems to be poised to hover just under the 120 level.
However, some in the bull camp might be disappointed with the markets action on
Thursday, which showed little upward extension off reports of overnight Chinese
buying. In fact, the market also showed almost no response to decent US economic
information. Unfortunately the copper market seems to be paying a significant
amount of attention to the potential for higher interest rates and that shows
the bull case is in question. Sharply rising Chinese treatment fees are
supposedly negative because that could discourage demand but we think that is a
bullish because that shows demand is strong and that supply of concentrates is
still tight, otherwise those charges could not rise sharply!

 

ENERGY MARKET RECAP

6/17/2004

Talk that Iraq’s pipeline repairs could take
longer than the 10 timeframe given by officials finally gave the bulls some
confidence to take prices higher after a lack of response to potentially bullish
developments earlier in the week. Therefore, unless there are more attempts to
sabotage oil facilities energy market may not have enough of a bullish tilt to
retest the May highs. This may be especially true since US gasoline demand
growth was downgraded this week and looks to be pushing more and more specs away
from the long side of the market. OPEC suggested that the world needs an extra
1.71 million barrels of oil in the 3rd quarter over the 2nd quarter and that
should have provided the market with some support. As long as the June 30th
handover looms, we suspect that few specs will be willing to attack the short
side of this market. Weekly natural gas inventory figures showed a build of 94
bcf and that allowed the annual deficit condition to contract which might be
considered a bullish development.

Technical Outlook

#ENERGIES 6/18/2004: CRUDE OIL (AUG): The cross
over and close above the 40-day moving average is an indication the longer-term
trend is up. There could be more upside follow through since the market closed
above the 2nd swing resistance. Support for crude is keyed on 38.14 and below
there at 37.22, with resistance pegged at 39.49 and 39.92. The close above the
9-day moving average is a positive short-term indicator for trend. The crossover
up in the daily stochastics is a bullish signal. The near-term upside target is
at 39.92.

UNLEADED GAS (AUG): A bullish signal was given
with an upside crossover of the daily stochastics. The next upside objective is
121.93. The market has a bullish tilt coming into today’s trade with the close
above the 2nd swing resistance. Resistance today is at 121.93, while support
should be found around 112.33. A positive signal for trend short-term was given
on a close over the 9-bar moving average.

HEATING OIL (AUG): There could be more upside
follow through since the market closed above the 2nd swing resistance. Heating
oil should encounter support around 98.60, with resistance is at 107.20. The
close above the 9-day moving average is a positive short-term indicator for
trend. Momentum studies are rising from mid-range which could accelerate a move
higher if resistance levels are penetrated. The near-term upside target is at
107.20.

 

CORN MARKET RECAP

6/17/2004

The early break brought the market to the lowest
level since February 5th which helped trigger speculative sales. A perception
that there will be some relief from the heavy rains for some of the weekend
helped trigger weakness after the higher opening as traders view the hefty net
long position of the fund trader and the weak technical action as a potential
set-up for aggressive long liquidation selling from fund traders if support
levels are violated. Overnight rains were a little farther north than expected.
Weekly export sales came in at 620,600 tons as compared with 500,000-700,000
tons expected. Old crop sales were 594,500 tons as compared with 530,400 tons
necessary each week to reach the USDA projection. Cumulative sales have reached
88.1% of the USDA forecast for the season as compared with 88.1% on average for
this time of the year. In the weekly report, “unknown” destination cancelled
187,700 tons which traders believe could be a switch to Argentina. Rain across
the China northern plains are which has been hot and dry recently added to the
bearish weather view. Argentina officials increased their 2003/2004 corn crop
production forecast to 12.6 million tons from 12.4 million last month. Cash
markets were firm. December corn support comes in at 278 and 274 3/4 with 288
1/4 and 292 1/2 as resistance.

Technical Outlook

#CORN (DEC) 6/18/2004: Momentum studies are still
bearish, but are now at oversold levels and will tend to support reversal action
if it occurs. The next downside target is now at 275 2/4. The market setup is
somewhat negative with the close under the 1st swing support. Market resistance
comes in at 292 today, with support at 275 2/4. The close below the 9-day moving
average is a negative short-term indicator for trend. Short-term indicators on
the defensive. Consider selling an intraday bounce.

 

SOY COMPLEX RECAP

6/17/2004

The 48 cent range and lower close for July
soybeans is seen as bearish technical action with the contract hitting new lows
for the week. New crop November soybeans had an inside trading session with a
slightly higher close which is neutral. December oil moved under 24.00 for the
first time since December 24th while December meal managed a new high for the
week and the highest close since June 8th. Strength at the China exchange
overnight and a jump in the basis at the gulf helped support a burst of buying
into the opening but weakness in corn and a break in the heavy rains for the
mid-west helped trigger the early selling just after the opening. Traders are
nervous that more rain over the weekend and more rain next week could eat into
yield potential and may delay planting efforts in some areas while other traders
believe the moist subsoil and the forecast for drier weather into early July
could create ideal growing conditions and improving crop conditions ahead.
Indications that India may raise the import duty on refined palm oil helped to
provide some support to oil as oil competes with palm for edible oil imports
with India the worlds largest importer. Weekly export sales came in at 103,700
tons as compared with 0-50,000 tons expected. Old crop sales were 97,700 tons as
compared with 31,100 tons necessary each week to reach the USDA projection.
Cumulative sales have reached 98.5% of the USDA forecast for the season as
compared with 97.7% on average for this time of the year. Weekly sales for meal
were 20,400 tons as compared with 15,000-45,000 tons expected. Old crop sales
were 19,800 tons as compared with 12,800 tons necessary each week to reach USDA
projection. Cumulative sales have reached 94.6% of the USDA forecast for the
season as compared with 85.7% on average for this time of the year. Oil sales
were 4500 tons. Resistance for November soybeans comes in at 675 and 678 1/2
with 654 1/2 and 642 1/2 as support levels.

Technical Outlook

#SOYBEANS (NOV) 06/18/04 The market has a
slightly positive tilt with the close over the swing pivot. The next area of
resistance is around 675 and 681, while 1st support hits today at 663 and below
there at 657. A negative signal for trend short-term was given on a close under
the 9-bar moving average. Daily stochastics declining into oversold territory
suggest the selling may be drying up soon. The next downside objective is 657.

MEAL (DEC): The daily stochastics gave a bullish
indicator with a crossover up. The near-term upside target is at 213.2. First
resistance comes in at 212.0, with support at 208.5. The close below the 9-day
moving average is a negative short-term indicator for trend. The close over the
pivot swing is a somewhat positive setup.

BEAN OIL (DEC): A negative signal for trend
short-term was given on a close under the 9-bar moving average. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The next downside objective is 23.54. The close below the 2nd swing
support number puts the market on the defensive. The outside day down is
somewhat negative. The market could take on a defensive posture with the daily
closing price reversal down. Daily swing resistance is found at 24.24 and above
there at 24.64. Support should be encountered at 23.69 and 23.54.

 

WHEAT MARKET RECAP

6/17/2004

The slowdown in commercial selling due to heavy
rains across Kansas overnight helped support the early bounce but weakness in
the corn market helped to limit early gains. The lack of harvest activity and
fears of quality problems in the Midwest due to too much rain helped support
higher basis bids for soft red winter wheat as exporters try to secure some
quality wheat just in case disease problems develop. Taiwan is tendering for
43,520 tons of US wheat and Japan bought 93,500 tons of wheat at their weekly
tender; 81,000 of the total from the US. Weekly export sales came in at 590,500
tons as compared with 450,000-550,000 tons expected and 393,000 tons necessary
each week to reach the USDA projection. Cumulative sales have reached 24.7% of
the USDA forecast for the season as compared with 12.1% on average for this time
of the year. Futures are considered oversold after recent sharp losses.
September wheat support comes in at 358 and 354 3/4 with 363 and 373 1/2 as
resistance.

Technical Outlook

#WHEAT (DEC) 6/18/2004: The daily closing price
reversal up is a positive indicator that could support higher prices. The market
tilt is slightly negative with the close under the pivot. Expect near-term
support around 368 2/4 and below there at 365, with resistance levels at 374 2/4
and 377. A negative signal for trend short-term was given on a close under the
9-bar moving average. Daily stochastics declining into oversold territory
suggest the selling may be drying up soon. The next downside objective is 365.

 

LIVE CATTLE RECAP

6/17/2004

The market experienced a second day of solid
gains with the perception of an oversold condition and a discount of futures to
the cash market helping to support. Gains were limited by a continued discount
of futures to the cash market and from lower beef prices. The average trade
estimates for June 1st Cattle-on-Feed report, for release after the close
tomorrow came in at 100.2% of last year (range 99-101.5). Placements during May
were pegged at 100.7% of last year (98-104.3) and marketings at 91.5% of last
year (89.7-93). Last years placements were hefty so matching last years
placements is seen as a bearish factor. Boxed beef cut-out vales (for choice
600-750lbs) dropped $.53 to $147.19 at mid-session as compared with $156.53 last
week at this time. The USDA announced that 2004 beef imports could reach 3.4
billion pounds, up 14% from 2003 as strong demand for protein based diets and a
decline in cattle available from Canada has helped to boost imports of hamburger
and lower quality beef.

Technical Outlook

#CATTLE (AUG) 6/18/2004: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
next downside objective is 85.62. The market setup is supportive for early gains
with the close over the 1st swing resistance. Support should be encountered at
86.15 and below there at 85.62. Market resistance is at 87.15 and then again at
87.62. A negative signal for trend short-term was given on a close under the
9-bar moving average.

 

LEAN HOGS RECAP

6/17/2004

The market pushed moderately higher on
expectations for higher cash hog prices into next week and expectations for a
recovery in loin prices and in pork cut-out values for next week as well. Cash
hogs were mostly steady but traders’ suspect good demand for live animals fro
Friday and a steady to higher tone in the cash market. The discount of futures
to the cash market along with the improved tone for cash next week helped boost
new buying and short covering from speculators. The 2-day lean index for the
period ending June 15th was 79.31, up 11 cents from the previous session and up
from 78.10 one week previous.

Technical Outlook

#HOGS (AUG) 6/18/2004: The close over the pivot
swing is a somewhat positive setup. Resistance levels comes in at 76.47 and
76.77 today, while support is around 75.52 and then 74.87. The close below the
9-day moving average is a negative short-term indicator for trend. Momentum
studies trending lower from overbought levels is a bearish indicator and would
tend to reinforce lower price action. The next downside target is now at 74.87.

 

COCOA MARKET RECAP

6/17/2004

The cocoa market continues to lack a clear cut
driving mentality and with the small traders venturing into the short side it
would seem that the bear camp has control over the market. News that the World
Bank might suspend Debt services to the Ivory Coast suggests that the current
government continues to have problems and that could eventually lead to
political problems and then to questions over Ivory Coast Production. In the
mean time, the trade just doesn’t seem to be that concerned with supply issues
and is content to left prices drift down.

Technical Outlook

COCOA (SEP) 06/18/04 The market tilt is slightly
negative with the close under the pivot. Cocoa should run into resistance at
1370 and above there at 1378 with support at 1349 and 1336. Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
1336.25.

 

COFFEE MARKET RECAP

6/17/2004

September Coffee closed sharply lower led by a
continued lack of threatening weather in Brazil which triggered another round of
long liquidation from speculators. End user buyers seem to have the coverage
they need and cash markets are very quiet. In fact, Brazil did not sell any of
the 200,000 bags offered at their tender to sell 200,000 bags of the reserve
left over from last years producer put program. The dry and warmer forecast
through the end of June has added to the bearish tone as harvest looks to
pick-up steam over the near-term.

Technical Outlook

COFFEE (SEP) 6/18/04 There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. Negative momentum studies in the neutral zone will tend to
reinforce lower price action. The next downside objective is now at 76.20. The
Coffee contract should run into resistance at 79.90 and above there at 81.80
with support at 77.1 and 76.20. The market’s short-term trend is negative as the
close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

6/17/2004

October sugar gapped higher from solid gains in
London and managed to close 17 higher on the session to a new contract high.
Ideas that the Brazil harvest is still running slow and that a higher than
expected portion of the crush may move to ethanol production helped support
renewed speculative interest in sugar. The longer-term fundamentals also remain
supportive with lower production expected in the long run from the US and Europe
as crop subsidies subside and strong demand expected late this season and maybe
into next season from non-routine buyers such as India, Russia and China.
Russian stocks are apparently drawing down after excess imports the past two
years but import demand could pick up late in the season and again next season.
The EU sold just 21,000 tons at their weekly tender as compared with
expectations of 30,000-90,000 tons and 60,700 tons last week. Trade house buying
was noted in London and in New York markets. July sugar put in a high of 727 as
compared with other spike highs at 725 on March 24th, 730 on April 28th, and
contract highs at 736 on June 2nd.

Technical Outlook

#SUGAR (OCT) 6/18/2004: The market rallied to a
new contract high. Follow through buying looks likely if the market can hold
yesterday’s gap on the day session chart. The close over the pivot swing is a
somewhat positive setup. Swing resistance comes in at 7.86, with support found
at 7.60. The close above the 9-day moving average is a positive short-term
indicator for trend. Daily stochastics have risen into overbought territory
which will tend to support reversal action if it occurs. The near-term upside
target is at 7.86. The market is becoming somewhat overbought now that the RSI
is over 70.

 

COTTON MARKET RECAP

6/17/2004

Cotton closed slightly higher with an inside
trading session with a relatively wide range. The inside day after a contract
low on Wednesday could indicate a loss in downside momentum and may attract some
technical buying support for Friday. Weekly export sales came in at 248,400
bales as compared with 175,000-275,000 expected. Old crop sales were 118,600
bales as compared with cancellations of 37,600 bales necessary each week to
reach the USDA projection. Cumulative sales have reached 102.3% of the USDA
forecast for the season as compared with 105.9% on average for this time of the
year. Shipments came in at 386,100 bales as compared with 225,000-300,000
expected.

Technical Outlook

#COTTON (OCT) 6/18/2004: A negative signal for
trend short-term was given on a close under the 9-bar moving average. The market
tilt is slightly negative with the close under the pivot. Next resistance area
comes in at 54.65 and then again at 55.35, while support is targeted at 53.35
and 52.75. Daily stochastics declining into oversold territory suggest the
selling may be drying up soon. The next downside objective is 52.75. The market
is approaching over sold levels on an RSI reading under 30.