Limit Up!

Technical Outlook

BONDS (MAR) 01/06/04: It is a slightly negative indicator that the close was lower than the pivot swing number. Near-term resistance for bonds is at 108.09 and then again at 108.19, while swing support hits at 107.14 and below there at 106.29. 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 106.29.

T-NOTES(MAR) 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 110.28. The market’s close below the pivot swing number is a mildly negative setup. Near-term resistance for the T-Notes is at 111.17 and then again at 111.23, while swing support hits at 111.04 and below there at 110.28. The market’s short-term trend is negative as the close remains below the 9-day moving average.

STOCK INDICES RECAP

1/5/2004

March S&P rallied back to near contract highs seen on Friday as investors pored money in to stocks for the New Year. Strong economic reports recently has brightened the economic outlook for 2004 and has investors expecting strong corporate earnings season with some major firms releasing reports later this week. Since the market has risen sharply since Dec 10, corporate earnings may need to beat the street’s expectations in order for stocks to hold on to gains. A close over 1118 in the March S&P puts the next target at the 1120 area.

Technical Outlook

S&P500 (MAR) 01/06/04: With the close over the 1st swing resistance number, the market is in a moderately positive position. Underlying support comes in at 1115.05 and 1108.78, with overhead resistance at 1124.55 and 1127.78. The market’s short-term trend is positive on a close above the 9-day moving average. The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 1127.78. With a reading over 70, the 9-day RSI is approaching overbought levels.

S&P E-Mini (MAR): The market made a new contract high on the rally. A bullish signal was given with an upside crossover of the daily stochastics. The next upside objective is 1130.31. The market setup is supportive for early gains with the close over the 1st swing resistance. Near-term resistance for the S&P Mini is at 1126.38 and then again at 1130.31, while swing support hits at 1113.63 and below there at 1104.81. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market is approaching overbought levels with an RSI over 70.

NASDAQ (MAR) A new contract high was made on the rally. The market’s close above the 9-day moving average suggests the short-term trend remains positive. 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 market should run into resistance at 1507.50 and above there at 1514.75 with support at 1483.50 and 1466.75. 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 next upside target is 1514.8.

CURRENCY MARKET RECAP

1/5/2004

The Dollar was pushed to new contract lows as comments from a Fed official over night drove another nail in the currency’s coffin by suggesting US rates will stay at 45 year lows despite recent indications the economy is recovering. With inflation rates still low as measured by the CPI & PPI indicators and the jobs sector still anemic, the Fed feels no urgency to raise rates. As a result, the March Euro is heading for $1.30, while the pound has made 11-year highs against the Dollar. A strong jobs report may give the Dollar some reprise if it is thought the Fed may move to raise rates sooner rather than later. March dollar support comes in at 86.22 then 85.95.

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 gap upmove on the day session chart is a bullish indicator for trend. Since the close was above the 2nd swing resistance number, the market’s posture is bullish and could see more upside follow-through early in the session. Swing resistance is targeted at 94.58 and above there at 94.65, with the yen finding support around 94.36 and below there at 94.21. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 94.65. The 9-day RSI over 70 indicates the market is approaching overbought levels.

EURO (MAR): Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 1.2692. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.2600, with overhead resistance at 1.2692. 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 market’s key reversal down is a bearish signal. The rally brought the market to a new contract high. The gap down on the day session chart is bearish with more selling pressure possible today.

PRECIOUS METALS RECAP

1/5/2004

Gold and silver were propelled to new contract highs with gold now at the highest price since 1988 on aggressive fund and speculative buying. A combination of factors have been responsible for the stellar rally in precious metals and include a weaker dollar, indications of robust economic growth, Fed to leave rates low, a strong stock market with expectations for strong corporate earnings, an upswing in world wide investment & physical demand for metals, a hightened terrorist alert and bullish chart pattern. Feb gold’s next target is $430 while March silver has a target of $6.50 on a solid move over $6.35.

Technical Outlook

SILVER (MAR): 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. Initial support for silver is at 612.8 and below there at 597.9 with resistance likely at 623.7 and 636.3. 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 597.9. The 9-day RSI over 70 indicates the market is approaching overbought levels. A new contract high was made on the rally. The gap upmove on the day session chart is a bullish indicator for trend.

GOLD (FEB): Support for gold today comes in near 415.63, while resistance is pegged at 431.03. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 431.03. 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. The rally brought the market to a new contract high.

COPPER MARKET RECAP

1/5/2004

The copper market gapped higher with the March contract rallying to the highest price levels since Aug, 1997. The combination of tightening world copper supplies, robust investment & physical demand, US and Asian economies on the rebound on top of a weaker Dollar are all bullish factors for copper. The Chinese continue to be veracious buyers of copper as they are more concerned about getting the physical product than about price so higher prices have failed to ration demand. The next upside targets for March copper come in at 108.90, 109.20 then 110.

ENERGY MARKET RECAP

1/5/2004

Forecasts for frigid weather conditions in the Northeast & Midwest this coming week was the key factor driving the energy complex sharply higher Monday. Feb crude oil rose just shy of $34 per barrel also supported by a larger than expected decline in the API/DOE crude stock levels in last week’s report showing crude oil supplies are tight and below the government’s comfort level. With distillate stocks only 3 million barrels above year ago levels and gasoline stocks 3 million barrels below year ago levels, any supply disruption could really have a big impact on prices. The complex is in a bullish technical setup and a push through $34 in Feb crude oil leaves little resistance until $35.

Technical Outlook

CRUDE OIL (MAR): The rally brought the market to a new contract high. The market’s close above the 2nd swing resistance number is a bullish indication. Support for crude is keyed on 33.05 and below there at 32.41, with resistance pegged at 33.98 and 34.27. The market’s short-term trend is positive on a close above the 9-day moving average. The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 34.27.

UNLEADED GAS (MAR): Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 100.26. 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. Resistance today is at 100.26, while support should be found around 93.66. A new contract high was made on the rally. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The 9-day RSI over 70 indicates the market is approaching overbought levels.

HEATING OIL (MAR):The market’s close above the 2nd swing resistance number is a bullish indication. Heating oil should encounter support around 92.42, with resistance is at 96.62. The market’s short-term trend is positive on a close above the 9-day moving average. The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 96.62. The rally brought the market to a new contract high. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session.

CORN MARKET RECAP

1/5/2004

The corn market closed slightly lower with an inside trading session after a contract high on Friday which is a slightly negative technical development. Without confirmation of China buying which supported the market on Friday, volume was light and trade was choppy with support from higher soybeans and weakness from weaker wheat markets. The Commitment-of-Traders report with options, released after the close, showed that funds liquidated more than 36,000 contracts of their net long position in just one week ending December 30th. This leaves the market less overbought and in a classic bullish set-up. Weekly export inspections came in at just 33.8 million bushels as compared with 36-41 million expected. Cumulative exports have reached 639.8 million bushels as compared with 527.8 million bushels last week at this time.

Technical Outlook

CORN (MAR) 01/06/04: Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 258 1/4. It is a mildly bullish indicator that the market closed over the pivot swing number. Market resistance comes in at 258 1/4 today, with support at 248 1/4. The market’s short-term trend is positive on a close above the 9-day moving average.

SOY COMPLEX RECAP

1/5/2004

March futures managed to close slightly higher on the session but the failure to take out Friday’s highs on the rally and the close below the opening are short-term bearish factors. The market is extremely overbought and the downside weekly closing price reversal last week combined with the overbought condition could encourage increased technical selling just ahead. The Commitment-of-Traders report with options, released after the close, showed the market in an overbought condition with speculators net long a near record high 79,946 contracts. For oil, specs are net long nearly 62,000 contracts and the net long in meal increased by nearly 9000 contracts on the week to over 46,000. Weekly export inspections came in at just 20.6 million bushels as compared with 23-28 million expected. Cumulative exports have reached 505.8 million bushels as compared with 467.7 million bushels last week at this time.

Technical Outlook

SOYBEANS (MAR) 01/06/04: The daily closing price reversal up is positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next area of resistance is around 808 1/2 and 815 1/4, while 1st support hits today at 792 1/2 and below there at 783 1/4. 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 815 1/4.

MEAL (MAR): Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 250.3. First resistance comes in at 248.0, with support at 242.7. 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 (MAR): The market’s close above the 9-day moving average suggests the short-term trend remains positive. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 29.41. 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 outside day up and close above the previous day’s high is a positive signal. A new contract high was made on the rally. The daily closing price reversal up is positive. Daily swing resistance is found at 29.01 and above there at 29.41. Support should be encountered at 27.98 and 27.35.

WHEAT MARKET RECAP

1/5/2004

Wheat opened weaker on profit taking after Friday’s sharp gains and further weakness set in as the market was disappointed with the weekly inspection data that came out early in the session. Wheat inspections for the week ending Jan 1 came in at 14.8 million bushels versus expectations of 22 to 27 million and 23.792 million the previous week. This brings cumulative exports for the year to 650.3 million versus 544.1 last year.

Technical Outlook

WHEAT (MAR) 01/06/04: It is a slightly negative indicator that the close was lower than the pivot swing number. Look for near-term support at 394 and below there at 391 1/4, with resistance levels at 402 1/2 and 408 1/4. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 408 1/4.

LIVE CATTLE RECAP

1/5/2004

Cattle closed limit up on optimism stemming from meetings scheduled this week between US officials and officials from Japan and Mexico regarding the restarting of exports to those two countries. While it is generally felt that a reinstatement is still a long way off, cattle exports are hopeful that the USDA’s moves last week to pull downed cattle out of the human food chain will go a long way towards easing the concerns held by importers of US beef. Today’s estimated slaughter came in at 95,000 head versus 119,000 last Monday and 118,000 a year ago. Restaurants may actually be benefiting from the Mad Cow case, as it has brought down wholesale beef costs but does not appear to have seriously damaged domestic demand to date.

Technical Outlook

CATTLE (FEB) 01/06/04: The daily stochastics have crossed over up which is a bullish indication. The next upside target is 77.00. A positive setup occurred with the close over the 1st swing resistance. Support should be encountered at 74.17 and below there at 72.50. Market resistance is at 76.42 and then again at 77.00. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The 9-day RSI under 30 indicates the market is approaching oversold levels.

LEAN HOGS RECAP

1/5/2004

Lean hogs closed stronger today on follow through from last Friday’s limit-up move. Today’s estimated hog slaughter came in at 388,000 head versus 397,000 last Monday and 381,000 a year ago. Traders remain optimistic that the discovery of Mad Cow disease in the US will have a beneficial impact on pork demand; they are specifically hopeful that US retailers will begin to feature pork more prominently in their weekly meat promotions. Steady increases in the pork cutout value over the past week, to the highest level since early December, attest to an improved outlook overall.

Technical Outlook

HOGS (FEB) 01/06/04: It is a mildly bullish indicator that the market closed over the pivot swing number. Resistance levels comes in at 56.50 and 56.85 today, while support is around 55.40 and then 54.65. 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 56.85.

COCOA MARKET RECAP

1/5/2004

March cocoa fell sharply Monday following an extended New Year’s break pressured by both speculative and origin sales. March cocoa prices fell despite news report that the Regulatory Authority for Cocoa and Coffee had lowered the amount of beans licensed exporters could buy to 40,000 tonnes per exporter for the 1st quarter 2004, down from 70,000 tonnes in the previous quarter due to tighter local supplies. The market also failed to react to reports that the Ivory Coast received poor rains for the last part of December and a continued dry spell through mid-January could begin to impact the 2004 mid-crop. Next key support for March cocoa is at $1,450.

Technical Outlook

COCOA (MAR)01/06/04 The close below the 1st swing support could weigh on the market. Cocoa should run into resistance at 1499 and above there at 1528 with support at 1449 and 1428. The 9-day RSI under 30 indicates the market is approaching oversold levels. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 1427.50.

COFFEE MARKET RECAP

1/5/2004

March coffee shot higher for the first trading session of the New Year with active trade house buying and continued fund short-covering helping to support. The weaker US dollar helped encourage more active buying from European roasters. CSCE stocks are still high at 4.361 million bags which was down just 314 bags on the session. Brazil exports for the December 1st to December 29th time frame were expected to have reached 1.554 as compared with 1.634 million bags for the same period in 2002. With Vietnam selling expected to reach a peak in early January, the period of peak supplies may be behind us now. The weather outlook this week calls for cooler and wetter weather for many of the growing regions in coffee. The Commitment-of-Traders report with options, released after the close, showed that fund traders were still net short over 8800 contracts as of December 30th which helps explain the surge in short-covering today.

Technical Outlook

COFFEE (MAR)1/6/04 The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The 9-day RSI over 70 indicates the market is approaching overbought levels. Daily stochastics are showing positive momentum from oversold levels which should reinforce a move higher if near-term resistance is taken out. The near-term upside objective is at 72.30.The Coffee contract should run into resistance at 71.00 and above there at 72.30 with support at 66.2 and 62.70. The market’s short-term trend is positive on a close above the 9-day moving average.

SUGAR MARKET RECAP

1/5/2004

After moving to the lowest level of the year on the last trading session of the year, March sugar opened higher for the first trade of the New Year but the close below the opening and the close which was 12 points off of the highs leaves the technical picture bearish. Open interest on the last trading day of the year jumped 4384 contracts to 212,553 which is an indication that speculators are pressing the short side in spite of the move to new 15 month lows. Funds were noted sellers on the early rally attempt. End user demand should see an uptick in the next few weeks as hand-to-mouth buying has left end user stocks tight but there is still no solid reason for more aggressive foreword coverage. Brazil exports in December were pegged at 1.61 million tons as compared with 1.22 million last year. Outside market influences appear bullish but the sugar fundamental outlook is still in question as the market may need to move low enough to attract increased demand from China or Russia.

Technical Outlook

SUGAR (MAR) 01/06/04: It is a mildly bullish indicator that the market closed over the pivot swing number. Swing resistance comes in at 5.85, with support found at 5.61. The market’s short-term trend is negative as the close remains below the 9-day moving average. Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 5.61. With a reading under 30, the 9-day RSI is approaching oversold levels.

COTTON MARKET RECAP

1/5/2004

March Cotton moved to the highest level since November 20th and moved into the November 18th price range on active buying from trade houses and funds in anticipation of bullish demand news during the coming week due to industry meetings. The move back to this level is significant as November 18th was the date which the US slapped on import quotas for selected China textiles due to the active increase in imports from China for the season. Hopes for increased demand from China in the months ahead continues to provide underlying support. The International Cotton Advisory Board pegged world production for the 2003/2004 season at 92.7 million bales as compared with consumption near 94.8 million bales. The drawdown in stocks is a supportive factor but high prices this year are expected to trigger higher production in 2004 from many key users and producers and there is talk of production near 100 million bales for the coming season.

Technical Outlook

COTTON (MAR) 01/06/04: The market’s close above the 9-day moving average suggests the short-term trend remains positive. 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. Next resistance area comes in at 76.25 and then again at 76.58, while support is targeted at 75.35 and 74.78. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 76.58. The 9-day RSI over 70 indicates the market is approaching overbought levels. ORANGE JUICE (MAR)1/6/04 The gap upmove on the day session chart is a bullish indicator for trend. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Orange Juice should run into resistance at 65.10 and above there at 65.55 with support at 64.30 and 63.95. The 9-day RSI under 30 indicates the market is approaching oversold levels. 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 63.95.