More Mad Cow?

Technical Outlook

#BONDS (SEP) 07/16/04: It is a slightly negative
indicator that the close was lower than the pivot swing number. Near-term
resistance for bonds is at 108.06 and then again at 108.16, while swing support
hits at 107.19 and below there at 107.10. 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 107.10.

T-NOTES(SEP) 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 110.02. The market’s close
below the pivot swing number is a mildly negative setup. Near-term resistance
for the T-Notes is at 110.18 and then again at 110.25, while swing support hits
at 110.07 and below there at 110.02. The market’s short-term trend is negative
as the close remains below the 9-day moving average.

 

STOCK INDICES RECAP

7/15/2004

The stock market continues to hold together well
in the face of potentially discouraging regularly scheduled economic
information. It would seem like corporate earnings reports are coming in good
enough that the market isn’t as concerned about the slowing threat. Some traders
suggested that the market was supported by the idea that the New York Fed
readings were strong enough to carry positive sentiment forward. However, the
overall macro economic outlook continued to favor the bear camp with the
information seen Thursday.

Technical Outlook

#S&P500 (SEP) 07/16/04: The market’s close below
the 1st swing support number suggests a moderately negative setup for today.
Underlying support comes in at 1097.65 and 1094.68, with overhead resistance at
1109.15 and 1117.68. 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
1094.68. With a reading under 30, the 9-day RSI is approaching oversold levels.

S&P E-Mini (SEP): Daily stochastics declining
into oversold territory suggest the selling may be drying up soon. The next
downside objective is 1101.88. The market tilt is slightly negative with the
close under the pivot. Near-term resistance for the S&P Mini is at 1104.50 and
then again at 1105.88, while swing support hits at 1102.50 and below there at
1101.88. A negative signal for trend short-term was given on a close under the
9-bar moving average. The market is approaching over sold levels on an RSI
reading under 30.

NASDAQ (SEP) 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 1422.25 and above there at
1434.38 with support at 1405.75 and 1401.38. 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 1401.4.

MINI DOW (SEP) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. The
market should run into resistance at 10180 and above there at 10248 with support
at 10081 and 10050. Momentum studies are declining, but have fallen to oversold
levels. The next downside target is 10050. The swing indicator gave a moderately
negative reading with the close below the 1st support number. Short-term
indicators on the defensive. Consider selling an intraday bounce.

 

CURRENCY MARKET RECAP

7/15/2004

The Dollar very surprisingly held following the
much softer than expected US economic readings. Even with a significantly lower
probability of higher US interest rates the Dollar managed to avoid excessive
bearish dialogue and that suggests that the currency markets lack a clear cut
opinion on the trend. We doubt that the New York Fed reading was the source of
the early strength in the Dollar but that ultra strong reading might have
discouraged early selling.

Technical Outlook

#CURRENCIES 07/16/04: YEN (SEP): The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative. The close below the 2nd swing support number puts the market
on the defensive. Swing resistance is targeted at 91.68 and above there at
92.19, with the yen finding support around 90.90 and below there at 90.63. The
close under the 40-day moving average indicates the longer-term trend could be
turning down. Momentum studies are declining, but have fallen to oversold
levels. The next downside target is 90.63.

EURO (SEP): 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 1.2269. The market is in a
bearish position with the close below the 2nd swing support number. Swing
support for the Euro comes in at 1.2269, with overhead resistance at 1.2407. The
market’s short-term trend is negative as the close remains below the 9-day
moving average. The gap down on the day session chart is bearish with more
selling pressure possible today.

 

PRECIOUS METALS RECAP

7/15/2004

Gold and silver prices started out strong but
gave back gains again shortly after the early US economic report flow. Seeing
the Dollar rise despite the slack numbers certainly undermined prices but at the
same time weak economic numbers should eventually result in Dollar pressure.
Seeing more Iraqi bombings keeps the flight to quality interest in gold but with
inflation numbers slack there has to be some disappointment among inflation
bulls. Traders should note that COMEX silver stocks declined to the lowest level
since October of 2003 in the July 14th readings and that could be suggesting a
tightening supply situation in silver!

Technical Outlook

#P-METALS 07/16/04: SILVER (SEP): With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
Initial support for silver is at 659.3 and below there at 650.4 with resistance
likely at 665.8 and 673.3. 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 665.8. The 9-day RSI over 70 indicates the market is
approaching overbought levels.

GOLD (AUG): Support for gold today comes in near
399.73, while resistance is pegged at 408.73. Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
408.73. The market’s close below the pivot swing number is a mildly negative
setup. The market’s short-term trend is positive on a close above the 9-day
moving average.

 

COPPER MARKET RECAP

7/15/2004

Copper prices basically discounted the soft early
US economic numbers and also ignored early weakness in precious metals prices.
Apparently there are enough strike fears to foster ongoing long interest and
continue to keep copper prices up close to resistance at 130. The ultra strong
New York Manufacturing readings would seem to provide a counter to all the
extremely negative macro economic demand talk and that might be why copper has
managed to stay generally strong while other metals have weakened.

 

ENERGY MARKET RECAP

7/15/2004

We are really surprised that the inventory
readings from Wednesday didn’t start energy prices out on a negative note
Thursday morning but early news of two more Iraqi Pipeline bombings suggests
that the insurgents are launching an offensive. Therefore, international supply
threats are apparently capable of trumpeting domestic supply fundamentals. We
also think that the expectation of extra OPEC Oil in August is robbing the
market of upside that could have been seen off the Iraqi setbacks.

Technical Outlook

#ENERGIES 07/16/04: CRUDE OIL (SEP): It is a
mildly bullish indicator that the market closed over the pivot swing number.
Support for crude is keyed on 40.71 and below there at 40.48, with resistance
pegged at 41.16 and 41.38. 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 41.38.

UNLEADED GAS (SEP): The daily stochastics have
crossed over up which is a bullish indication. The next upside target is 130.75.
With the close higher than the pivot swing number, the market is in a slightly
bullish posture. Resistance today is at 130.75, while support should be found
around 127.15. 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.

HEATING OIL (SEP): It is a mildly bullish
indicator that the market closed over the pivot swing number. Heating oil should
encounter support around 108.79, with resistance is at 111.99. 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 111.99.

 

CORN MARKET RECAP

7/15/2004

The market closed moderately lower but did manage
to hold support at the July 12th lows. The market was called to open higher on
the session but a lack of new buying interest with soybeans and wheat lower
trigger the lower opening which attracted long liquidation selling from funds.
Weekly export sales for wheat came in at 1.08 million tons as compared with
trade expectations at 400,000-500,000 tons. Old crop sales were 657,600 tons as
compared with 197,900 tons necessary each week to reach the USDA projection.
Cumulative sales have reached 96.9% of the USDA forecast for the season as
compared with 94.7% on average for this time of the year. The weather looks near
ideal for pollination of the crop for the next week. Gulf basis was steady to
firm today. Deliveries against the July contract which expired yesterday came in
at 395 contracts. December corn support comes in at 250 and 249 with 253 1/2 and
263 as resistance.

Technical Outlook

#CORN (DEC) 07/16/04: The daily stochastic’s gave
a bearish indicator with a crossover down. The next downside objective is now at
247 1/4. The market’s close below the 1st swing support number suggests a
moderately negative setup for today. Market resistance comes in at 254 1/4
today, with support at 247 1/4. The market’s short-term trend is negative as the
close remains below the 9-day moving average. With a reading under 30, the 9-day
RSI is approaching oversold levels.

 

SOY COMPLEX RECAP

7/15/2004

November soybeans attracted significant fund and
speculative selling while giving back most of yesterdays gains but stayed inside
of yesterday’s range. Weak export sales news, a lack of high temperatures in the
forecast of below normal precipitation for the next 10 days and a lack of any
confirmation of “Asian rust” rumors for the Midwest helped to trigger
speculative selling shortly after the lower opening. Weekly export sales for
soybeans came in at 7900 tons as compared with trade expectations at 0-50,000
tons. Old crop sales showed cancellations of 4800 tons as compared with 32,900
tons necessary each week to reach the USDA projection. Cumulative sales have
reached 99% of the USDA forecast for the season as compared with 101.5% on
average for this time of the year. Meal sales were 20,000 tons from
25,000-50,000 tons expected. Old crop sales were 3500 tons as compared with
12,100 tons necessary each week to reach the USDA projection. Cumulative sales
have reached 96.2% of the USDA forecast for the season as compared with 90% on
average for this time of the year. Oil sales showed cancellations of 4500 tons
against trade expectations of 0-5,000 tons. Cash soybean basis bids were weaker
in the mid-west. Deliveries this morning were 222 for soybeans, 202 for oil and
67 for meal. A strong stopper took 50 meal. November soybean support comes in at
640 and 635 with 656 ½ and 664 as resistance.

Technical Outlook

#SOYBEANS (NOV) 07/16/04: The swing indicator
gave a moderately negative reading with the close below the 1st support number.
The next area of resistance is around 657 and 673 1/2, while 1st support hits
today at 634 and below there at 627 1/2. The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. 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 673 1/2.

MEAL (DEC): The daily stochastic’s gave a bearish
indicator with a crossover down. The next downside objective is now at 194.5.
First resistance comes in at 205.9, with support at 196.9. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. The market’s close below the 1st swing support number suggests a
moderately negative setup for today. Daily studies pointing down suggests
selling minor rallies.

BEAN OIL (DEC): The market’s close below the
9-day moving average is an indication the short-term trend remains negative.
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 23.79. It is a slightly negative indicator that the close was
lower than the pivot swing number. Daily swing resistance is found at 23.53 and
above there at 23.79. Support should be encountered at 23.08 and 22.89.

 

WHEAT MARKET RECAP

7/15/2004

The downside breakout to the lowest level since
October of 2003 keeps the market in a decisive downtrend. Funds were noted
sellers of at least 3000 contracts. Poor weekly export sales and weakness in the
other grains helped pressure the market early. Weekly export sales for wheat
came in at 312,400 tons as compared with trade expectations at 400,000-500,000
tons. Old crop sales were 312,400 tons as compared with 388,900 tons necessary
each week to reach the USDA projection. Cumulative sales have reached 31.3% of
the USDA forecast for the season as compared with 18.5% on average for this time
of the year. Overnight business showed South Korea buying 21,000 tons of US
wheat and Japan buying 126,000 tons at their weekly tender, 85,000 of the total
from the US. The poor weekly sales may leave traders with the impression that
prices may need to move lower in order to compete on the world market. Support
for September wheat drops down to 330 ½ and 326 while resistance is now at 336 ½
and 341.

Technical Outlook

#WHEAT (DEC) 07/16/04: The close below the 2nd
swing support number puts the market on the defensive. Look for near-term
support at 340 1/2 and below there at 337 1/2, with resistance levels at 352 and
360 1/2. 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. The next downside target is 337 1/2.

 

LIVE CATTLE RECAP

7/15/2004

Cattle pushed sharply lower across the board as
rumors that a preliminary mad cow test had come up with an inconclusive reading
helped to trigger aggressive long liquidation selling. Since the new tests have
been used beginning June 1st, there have been two inconclusive tests results and
in both cases, the more accurate tests were negative. More talk that cash would
trade at least $2.00 lower on the week to $84.00 with some talk of 83.00 trade
helped to pressure. Boxed-beef cut-out values at mid-session were up 58 cents to
$141.28 as compared with $141.67 last week at this time.

Technical Outlook

#CATTLE (AUG) 07/16/04: Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
81.45. The swing indicator gave a moderately negative reading with the close
below the 1st support number. Short-term indicators on the defensive. Consider
selling an intraday bounce. Support should be encountered at 81.92 and below
there at 81.45. Market resistance is at 83.62 and then again at 84.85. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative.

 

LEAN HOGS RECAP

7/15/2004

The August hogs managed a move to limit-down into
the mid-session as funds were noted as active sellers when futures broke-out to
the downside of the June-July consolidation. Weakness in cattle, sharply lower
quotes for loins and cash bellies in the Wednesday evening pork cut-out report
and news that hog weights are on the rise were seen as the primary bearish
forces. July Hogs expired at noon at 79.55 which leaves the August contract at a
590 point discount to the cash market. The 2-day lean index for the period
ending July 13th was up .13 to 79.29 as compared with 79.28 one week previous.
Today was the first close under the 40-day moving average for August hogs since
late February,

Technical Outlook

#HOGS (AUG) 07/16/04: The market is in a bearish
position with the close below the 2nd swing support number. Resistance levels
comes in at 74.45 and 75.65 today, while support is around 72.85 and then 72.45.
The downside crossover (9 below 18) of the moving averages suggests a developing
short-term downtrend. The major trend is down with the cross over back below the
40-day moving average. Daily stochastics are trending lower, but have declined
into oversold territory. The next downside objective is now at 72.45.

 

COCOA MARKET RECAP

7/15/2004

Cocoa prices continue to defy fundamental reason
and might be benefiting from long term technical stop loss buying. So far the
Press attributes the upside action to fund buying and since the funds were
recently net short one can’t argue with the opinion. However, with the gains
this week the funds have more than likely shifted their position into a net long
position. Even in the face of news that Ivory Coast export arrivals reached 1.29
million by June 30th the market managed to rally and that is indicative of a
strong market.

Technical Outlook

COCOA (SEP) 07/16/04 The market has a slightly
positive tilt with the close over the swing pivot. Cocoa should run into
resistance at 1554 and above there at 1570 with support at 1508 and 1478. 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 1569.50.

 

COFFEE MARKET RECAP

7/15/2004

September coffee pushed slightly higher on the
session and managed to move to the highest level since July 2nd with light
commercial and speculative buying helping to provide support. A lack of new news
helped to keep the trade volume low and trade quiet but light short-covering and
a lack of selling interest helped support the bounce. There is still some
weather uncertainty to help support but if longer-term weather models do not
show a significant threat soon, Brazil producer selling could increase as the
harvest picks up steam. The Monthly US Green Coffee stocks report, released this
afternoon, is expected to show stocks up between 50,000-100,000 bags from last
month as compared with May 31st stocks of 5.836 million bags.

Technical Outlook

COFFEE (SEP) 7/16/04 The market has a slightly
positive tilt with the close over the swing pivot. 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 73.30.
The Coffee contract should run into resistance at 72.80 and above there at 73.30
with support at 71.45 and 70.60. The market’s short-term trend is positive on a
close above the 9-day moving average.

 

SUGAR MARKET RECAP

7/15/2004

October sugar closed only 1 tick higher on the
session but 14 points off of the highs and 6 below the opening. The market
managed to match the previous contract high at 838 before the late sell-off.
This action could signal a near-term top and with speculators holding a net long
position near record highs, a minor technical correction could quickly snowball
into a major washout on the downside as funds may shift to a “sell weakness”
mode. A senior economist from the London based International Sugar Organization
indicated to Reuter’s reporters that the fundamentals in sugar may not justify
the run to 3 year highs in London. With the 40-day moving average at 755, the
market is in a very overbought condition and could see a significant correction
without changing the longer-term trend.

Technical Outlook

#SUGAR (OCT) 07/16/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Swing resistance
comes in at 8.47, with support found at 8.05. 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 8.05.

 

COTTON MARKET RECAP

7/15/2004

The market experienced quiet, two sided trade
with light volume in spite of improving news on the export front. December
closed 51 higher finding some late buying support from speculators. Weekly
export sales for cotton came in at 337,500 bales as compared with trade
expectations at 250,000-300,000 bales. Old crop sales were 185,400 bales as
compared with -255,600 bales necessary each week to reach the USDA projection.
Cumulative sales have reached 108% of the USDA forecast for the season as
compared with 108.5% on average for this time of the year. Export shipments were
206,500 bales as compared with trade expectations at 275,000-350,000 bales. The
strong sales were partially offset by the slower than expected shipments.
Exchange stocks were down to 127,368 bales as compare with 132,764 bales the
previous session.

Technical Outlook

#COTTON (OCT) 07/16/04: 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 47.76 and then again at 48.03,
while support is targeted at 46.81 and 46.13. 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 48.03. The 9-day
RSI under 30 indicates the market is approaching oversold levels. The daily
closing price reversal up is positive.