Is Unleaded At A Near-Term Low?

Technical Outlook

BONDS (JUN) 03/29/04: The close below the 2nd
swing support number puts the market on the defensive. Near-term resistance for
bonds is at 114.32 and then again at 116.01, while swing support hits at 113.15
and below there at 112.31. 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 112.31.

T-NOTES(JUN) 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 114.18. The market’s close below the 1st swing
support number suggests a moderately negative setup for today. 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 115.24 and then again at 116.11, while swing
support hits at 114.27 and below there at 114.18. The market’s short-term trend
is negative as the close remains below the 9-day moving average.

 

STOCK INDICES RECAP

3/26/2004

The stock market continued to show consistent
buying interest and did so in the wake of favorable US economic information. In
fact, almost all the US reports Friday morning were better than expected and
that sets a pattern of better readings ahead of next week’s critical
unemployment report. The US stock market might even have seen some support off
much better than expected Canadian retail sales readings as that suggests better
North American growth. Apparently there wasn’t a fear of weekend terrorism as
the buying outnumbered the sellers.

Technical Outlook

S&P500 (JUN) 03/29/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Underlying support
comes in at 1101.25 and 1097.93, with overhead resistance at 1110.95 and
1117.33. The market’s short-term trend is positive on a close above the 9-day
moving average. Daily momentum studies are on the rise from low levels and
should accelerate a move higher on a push through the 1st swing resistance. The
near-term upside objective is at 1117.33.

S&P E-Mini (JUN): Rising from over sold levels,
daily momentum studies would support higher prices especially on a close above
resistance. The next upside objective is 1117.56. The market has a slightly
positive tilt with the close over the swing pivot. Near-term resistance for the
S&P Mini is at 1111.38 and then again at 1117.56, while swing support hits at
1101.63 and below there at 1098.06. A positive signal for trend short-term was
given on a close over the 9-bar moving average.

NASDAQ (JUN) The downside closing price reversal
on the daily chart is somewhat negative. The market’s close above the 9-day
moving average suggests the short-term trend remains positive. With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
The market should run into resistance at 1428.00 and above there at 1439.00 with
support at 1412.00 and 1407.00. Positive momentum studies in the neutral zone
will tend to reinforce higher price action. The next upside target is 1439.0.

MINI DOW (JUN) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. The market should
run into resistance at 10231 and above there at 10287 with support at 10135 and
10095. 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 10287. With the close higher than the pivot swing number,
the market is in a slightly bullish posture.

 

CURRENCY MARKET RECAP

3/26/2004

Despite the favorable action in US stocks, good
US numbers and a surprisingly weak US Treasury market the US Dollar really
didn’t show much in the way of upside interest. However, from the action Friday
it is clear that the strong currencies are the Yen, Pound and Canadian, with the
weak currencies being the Euro and the Swiss. We suspect that the Dollar sits in
the middle ground and will need an extension of the good economic numbers next
week to put the market in an upward bias.

Technical Outlook

CURRENCIES 03/29/04: YEN (JUN): 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. Swing resistance is targeted at 94.82 and above there
at 95.12, with the yen finding support around 94.36 and below there at 94.20.
Studies are showing positive momentum, but are now in overbought territory so
some caution is warranted. The next upside target is 95.12. The 9-day RSI over
70 indicates the market is approaching overbought levels.

EURO (JUN): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
1.1982. The market is in a bearish position with the close below the 2nd swing
support number. Swing support for the Euro comes in at 1.1982, with overhead
resistance at 1.2230. The market’s short-term trend is negative as the close
remains below the 9-day moving average. The major trend is down with the cross
over back below the 40-day moving average. The gap down on the day session chart
is bearish with more selling pressure possible today.

 

PRECIOUS METALS RECAP

3/26/2004

The gold and silver market showed surprising
strength and did so with only minor declines in the Dollar. While it seemed like
the US macro economic outlook was brightening it would seem that the gold market
is getting support from the potential to see political anxiety. Therefore, the
metals markets continue to show signs of shifting their focus to meet their
needs. With the strong gains Friday both gold and silver managed to forge new
highs for the move and that leaves the bias pointing upward. Adding to the
upside momentum in gold prices were reports of a shut down at a Newmont mining
facility with the coming expecting to slow gold sales as a result of the
problems.

Technical Outlook

METALS 03/29/04: SILVER (MAY): A positive setup
occurred with the close over the 1st swing resistance. Initial support for
silver is at 763.2 and below there at 755.1 with resistance likely at 773.8 and
780.2. 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 755.1. The 9-day RSI over 70
indicates the market is approaching overbought levels. A new contract high was
made on the rally.

GOLD (JUN): Support for gold today comes in near
417.23, while resistance is pegged at 428.23. Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
428.23. The market’s close above the 2nd swing resistance number is a bullish
indication. 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.

 

COPPER MARKET RECAP

3/26/2004

The copper market managed a light short covering
move Friday and was probably helped by the US economic reports and the favorable
US equity market action. The trade was talking up the tightness theme again and
that seems to leave the market with a bullish bias as the end of each session.
We still haven’t seen as much Chinese physical interest and that could be why
prices have tracked mostly sideways.

 

ENERGY MARKET RECAP

3/26/2004

The unleaded market managed an impressive
rejection of the selling pressure and that would seem to hint at a critical near
term low. However, we are seeing a number of funds take profits on long
positions and the funds are heavily long crude oil. It should also be noted that
the OPEC President expressed concern that global demand was set to decline by
2.5 million barrels per day and therefore OPEC could not possibly fail to cut
production in the coming meeting. In fact, the OPEC President suggested that no
OPEC members were in favor of raising production in the coming meeting. Whether
or not OPEC will actually comply with the upcoming cut is something altogether
different but right now the market is maintaining a bullish bias.

Technical Outlook

#ENERGIES 03/29/04: CRUDE OIL (MAY): The upside
closing price reversal on the daily chart is somewhat bullish. It is a mildly
bullish indicator that the market closed over the pivot swing number. Support
for crude is keyed on 35.20 and below there at 34.44, with resistance pegged at
36.27 and 36.58. 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 34.44.

UNLEADED GAS (MAY): 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
108.16. A positive setup occurred with the close over the 1st swing resistance.
Resistance today is at 115.16, while support should be found around 108.16. The
daily closing price reversal up is positive. The market’s close below the 9-day
moving average is an indication the short-term trend remains negative.

HEATING OIL (MAY): It is a mildly bullish
indicator that the market closed over the pivot swing number. Heating oil should
encounter support around 84.71, with resistance is at 91.91. 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
84.71. The upside closing price reversal on the daily chart is somewhat bullish.

 

CORN MARKET RECAP

3/26/2004

A weekly closing price reversal after making
contract highs on Monday combined with a record net long position of the fund
trade could attract additional long liquidation selling into the end of the
month and end of the quarter next week. Strength in soybeans supported the early
bounce but long liquidation selling from speculators and some continued light
selling from commercials (thought to be producer movement) helped to pressure
the market. Cash dealers are seeing a jump in new crop sales ahead of the key
planted acreage report for release next week. Taiwan bought 60,000 tons of US
corn overnight and South Korea bought 110,000 tons of optional origin corn
overnight. A survey of traders from Reuters showed an average trade estimate for
Wednesday’s USDA quarterly stocks report at 5.275 billion bushels (range
5.208-5.340) as compared with 5.132 billion bushels last year at this time. For
the planting intentions report, traders are looking for planted acreage for corn
at 80.29 million acres (range 79.5-81.0) as compared with 78.736 million acres
planted last year. July corn closed 7 cents lower on the week.

Technical Outlook

CORN (MAY) 03/29/04: Momentum studies trending
lower at mid-range should accelerate a move lower if support levels are taken
out. The next downside objective is now at 300 1/4. The market’s close below the
pivot swing number is a mildly negative setup. Market resistance comes in at 311
1/4 today, with support at 300 1/4. The market’s short-term trend is negative as
the close remains below the 9-day moving average.

 

SOY COMPLEX RECAP

3/26/2004

The market found early strength from expectations
of smaller crops out of South America but long liquidation from speculators set
in to push the market sharply lower on the session. A well respected private
forecast firm in Brazil (Safras e Mercado) pegged the soybean crop at 52.28
million tons as compared with their February forecast of 56.67 million tons and
59.5 million tons in the last USDA report. While the estimate is down sharply
from previous forecasts, the trade is now assuming a crop near the 52-54 million
tons level. South Korea is tendering for 150,000 tons of optional origin
soybeans. The market remains nervous with the technical overbought condition of
the market and possible long liquidation selling into the end of the month;
however, positioning ahead of key USDA reports next week might keep the trade
volatile. A survey of traders from Reuters showed an average trade estimate for
Wednesday’s USDA quarterly stocks report at 867 million bushels (range 850-904)
as compared with 1.201 billion bushels last year at this time. For the planted
acreage report, traders are looking for soybean planting intentions at 74.508
million acres (range 71.822-76.4) as compared with 73.404 million acres planted
last year. May soybeans closed 8 cents lower on the week; May meal closed $2.70
higher and May Oil 74 lower on the week.

Technical Outlook

SOYBEANS (MAY) 03/29/04: The swing indicator gave
a moderately negative reading with the close below the 1st support number. The
next area of resistance is around 1027 and 1046 1/2, while 1st support hits
today at 999 and below there at 990 1/2. The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. 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 990 1/2. Short-term indicators on the defensive.
Consider selling an intraday bounce.

MEAL (MAY): 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 310.6. First resistance
comes in at 320.5, with support at 313.4. The market’s short-term trend is
positive on a close above the 9-day moving average. The market’s close below the
pivot swing number is a mildly negative setup.

BEAN OIL (MAY): 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 32.71. It is a slightly negative indicator
that the close was lower than the pivot swing number. Daily swing resistance is
found at 33.72 and above there at 34.11. Support should be encountered at 33.02
and 32.71.

 

WHEAT MARKET RECAP

3/26/2004

Long liquidation from the speculator, poor export
news and improving weather forecasts to support better early growth for the
winter wheat crop helped contribute to the weak trade action but short-covering
boosted the market into the close. Traders viewed the Iraq tender news overnight
as a bearish factor as the US received just 165,000 tons of the tender while
Australia exporters received 460,000 tons. Traders are also concerned with the
slow pace of shipments to China. China has purchased 1.381 million tons of US
wheat for delivery before June 1st but shipments have reached just 294,400
tonnes. Adding to the bearish tone on the floor is talk of larger world crops
for the coming year, talk of another good crop in Australia for next year and
ideas that the longer-term weather maps (6-10 and 8-14 day models) are showing
better chances of rains in the southern and central plains. Forecasts for good
rains in the eastern half of the plains for the weekend added to the bearish
tone. A survey of traders from Reuters showed an average trade estimate for
Wednesday’s USDA quarterly stocks report at 1.037 billion bushels (range
1.02-1.064) as compared with 907 million bushels last year at this time. For the
planted acreage report, traders are looking for spring wheat acreage to come in
near 13.488 million acres (range 13.1-14.1) as compared with 13.84 million acres
planted last year. For winter wheat planted acreage, traders are looking for
43.594 million acres as compared with 44.945 million planted last year and the
January USDA prospective plantings estimate of 43.464 million acres. July wheat
closed 14 1/4 higher on the week.

Technical Outlook

WHEAT (MAY) 03/29/04: It is a slightly negative
indicator that the close was lower than the pivot swing number. Look for
near-term support at 402 and below there at 398, with resistance levels at 408
1/2 and 411. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. Studies are showing positive momentum, but
are now in overbought territory so some caution is warranted. The next upside
target is 411.

 

LIVE CATTLE RECAP

3/26/2004

April cattle closed 50 higher on the session but
down 182 points on the week. The stiff discount of futures to the cash market
and ideas that futures were oversold after closing down for 7 sessions in a row
helped to support. Boxed-beef cut-out values for choice 600-750 pound cuts was
down $1.10 to $138.96 as compared with $143.72 last week at this time.
Cumulative beef production this year is running 9.8% below last years pace but
for the week, production was up slightly from last week and from last year.
Slaughter for the week was 620,000 head as compared with 619,000 last week and
625,000 head last year. Cattle prices are likely to be impacted by the USDA
quarterly hog report.

Technical Outlook

CATTLE (JUN) 03/29/04: Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
72.85. A positive setup occurred with the close over the 1st swing resistance.
Support should be encountered at 73.25 and below there at 72.85. Market
resistance is at 74.00 and then again at 74.35. The moving average crossover
down (9 below 18) indicates a possible developing short-term downtrend.

 

LEAN HOGS RECAP

3/26/2004

The hog market inched lower in choppy, two-sided
trade ahead of the USDA Hogs and Pigs report. The report should set the tone for
the market for next week. Bellies pushed to new contract highs and new all-times
before March closed 100 lower on the session at 109. The 2-day Lean Index was up
19 cents to $68.59 as compared with $67.10 one week ago. For this afternoons
report, traders are looking for March 1st Hogs and Pigs inventory to come in
near 101.6% (range 100-102.4%), kept for breeding estimates averaged 98.7%
(97%-100.4%) and kept for marketings at 102% (range 100%-103%).

Technical Outlook

HOGS (JUN) 03/29/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Resistance levels
comes in at 72.30 and 72.90 today, while support is around 71.25 and then 70.80.
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 70.80.

 

COCOA MARKET RECAP

3/26/2004

The cocoa market showed only minor strength
despite reports that the death toll in recent violence had reached 120. We are
even more surprised that the market wasn’t more sensitive to the news that rebel
leaders are resigning in force from the Ivory Coast government. Apparently
government forces are attempting to temper demonstrations and the result in
significant deaths. Therefore, the cocoa market would seem to have a renewal of
the political anxiety situation and that favors the bull camp.

Technical Outlook

COCOA (MAY) 03/29/04 The market has a slightly
positive tilt with the close over the swing pivot. Cocoa should run into
resistance at 1501 and above there at 1523 with support at 1455 and 1431.
Positive momentum studies in the neutral zone will tend to reinforce higher
price action. The next upside target is 1523.00.

 

COFFEE MARKET RECAP

3/26/2004

July coffee closed 70 higher on the session but
down 470 points on the week. The rally was on light volume with some roaster
buying noted but most of the buying appears to be short-covering. Thursday’s gap
below the major uptrend channel off of the November, December and February lows
turned the technical picture sour and triggered the hefty losses on the week.
Rising exchange stocks and increasing crop production estimates for the upcoming
Brazil crop helped to pressure the market on the week.

Technical Outlook

COFFEE (MAY) 3/29/04 The daily closing price
reversal up is positive. The market has a slightly positive tilt with the close
over the swing pivot. Momentum studies are declining, but have fallen to
oversold levels. The next downside objective is now at 70.45. The Coffee
contract should run into resistance at 72.55 and above there at 72.95 with
support at 71.3 and 70.45. The market’s short-term trend is negative as the
close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

3/26/2004

May sugar closed 53 lower on the session and down
67 on the week as aggressive fund long liquidation triggered a collapse of 121
points off of Wednesday’s higher to Friday’s lows. The lack of fundamental news
to justify the recent sharp gains and the outlook for a bumper crop in Brazil
this year helped to pressure the market. Traders are fearful that the
Commitment-of-Traders reports over the weekend may show a record net long
position from the speculator.

Technical Outlook

SUGAR (MAY) 03/29/04: The market’s close below
the 1st swing support number suggests a moderately negative setup for today.
Swing resistance comes in at 6.68, with support found at 5.70. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. The major trend is down with the cross over back below the 40-day
moving average. 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 5.70. Daily studies pointing down suggests selling minor rallies.

 

COTTON MARKET RECAP

3/26/2004

The market surged sharply higher on the session
led by strength in the stock market and by expectations for a significant drop
in planted acreage for the coming year if many producers switch to what appears
to be more lucrative soybeans. While July cotton closed significantly lower on
the week, December cotton managed to move slightly higher on the week as
expectations for lower plantings this year helped support.

Technical Outlook

COTTON (MAY) 03/29/04: The market’s close below
the 9-day moving average is an indication the short-term trend remains negative.
With the close higher than the pivot swing number, the market is in a slightly
bullish posture. Next resistance area comes in at 65.42 and then again at 65.76,
while support is targeted at 64.38 and 63.68. Negative momentum studies in the
neutral zone will tend to reinforce lower price action. The next downside target
is 63.68.