More Upside Tomorrow For The Indices?

Technical Outlook

#BONDS (JUN) 3/26/2004: The close below the 1st
swing support could weigh on the market. Near-term resistance for bonds is at
115.26 and then again at 116.07, while swing support hits at 115.05 and below
there at 114.29. A negative signal for trend short-term was given on a close
under the 9-bar moving average. A bearish signal was triggered on a crossover
down in the daily stochastics. Stochastics turning bearish at overbought levels
will tend to support lower prices if support levels are broken. The next
downside objective is 114.29. Bearish daily studies indicate selling minor
rallies this session.

T-NOTES(JUN) The daily stochastic’s gave a
bearish indicator with a crossover down. Momentum studies are trending lower
from high levels which should accelerate a move lower on a break below the 1st
swing support. The next downside objective is now at 115.20. The market’s close
below the pivot swing number is a mildly negative setup. 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 116.08 and then again at 116.15, while swing support hits
at 115.27 and below there at 115.20. The market’s short-term trend is positive
on a close above the 9-day moving average.

 

STOCK INDICES RECAP

3/25/2004

The stock market really surprised the trade with
a sharp rise and that rise came in the face of renewed terrorism threats! With
Fed dialogue hinting at a big improvement in the jobs front many bargain hunters
moved into the market. While ongoing claims dropped by 46,000, housing showed a
2% gain and the help wanted Index gained 1 point it would not seem like the
numbers released Thursday were a major improvement. Therefore, the source of the
rally seems to be the Fed or simply fund positioning.

Technical Outlook

#S&P500 (JUN) 3/26/2004: There could be more
upside follow through since the market closed above the 2nd swing resistance.
Underlying support comes in at 1098.50 and 1088.45, with overhead resistance at
1113.90 and 1119.25. 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 objective is at 1119.25.

S&P E-Mini (JUN): A bullish signal was given with
an upside crossover of the daily stochastics. The next upside target is 1122.19.
The market has a bullish tilt coming into today’s trade with the close above the
2nd swing resistance. Near-term resistance for the S&P Mini is at 1115.88 and
then again at 1122.19, while swing support hits at 1096.63 and below there at
1083.69. The market’s close below the 9-day moving average is an indication the
short-term trend remains negative.

NASDAQ (JUN) 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. The market should run into resistance at 1441.50 and above there at
1452.25 with support at 1407.50 and 1384.25. The daily stochastics have crossed
over up which is a bullish indication. The next upside objective is 1452.25.

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 10261 and above there at 10313 with support at 10096 and 9983. The
crossover up in the daily stochastics is a bullish signal. The near-term upside
target is at 10313. There could be more upside follow through since the market
closed above the 2nd swing resistance.

 

CURRENCY MARKET RECAP

3/25/2004

The Dollar Index tried to spike up but failed to
hold the gains, possibly because of new terrorism threats lodged specifically
against the US. We do think that the US economic numbers Thursday were
supportive to the Dollar but not enough to completely discount the terrorism
issue. It is a little surprising that the favorable comments form the Fed about
“big” job growth ahead didn’t manage to support the Dollar but again investors
are in a mode to avoid terrorist targets.

Technical Outlook

#CURRENCIES 3/26/2004: YEN (JUN): A positive
signal for trend short-term was given on a close over the 9-bar moving average.
The market has a slightly positive tilt with the close over the swing pivot.
Swing resistance is targeted at 94.67 and above there at 94.87, with the yen
finding support around 94.33 and below there at 94.19. Rising stochastics at
overbought levels warrant some caution for bulls. The next upside objective is
94.87. The market is approaching overbought levels with an RSI over 70.

EURO (JUN): 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 1.2014. The defensive setup, with the
close under the 2nd swing support, could cause some early weakness. Swing
support for the Euro comes in at 1.2014, with overhead resistance at 1.2220. The
close below the 9-day moving average is a negative short-term indicator for
trend. The close below the 40-day moving average is an indication the
longer-term trend is down. More selling pressure is likely given yesterday’s gap
lower price action on the day session chart.

 

PRECIOUS METALS RECAP

3/25/2004

The early rise in the Dollar undermined the gold
and seemed to leave the market without strong interest for the remainder of the
session. However, it would seem that gold and silver are diverging slightly with
silver showing much more weakness that gold. The direct threat of terrorism
against the US undermined the Dollar and could provide the gold with a fresh
lift over the coming 24 hours. In the mean time it would seem that many
commodity funds are considering some profit taking and that could impact the
silver market more than the gold market.

Technical Outlook

#P-METALS 3/26/2004: SILVER (MAY): The market
tilt is slightly negative with the close under the pivot. Initial support for
silver is at 751.7 and below there at 741.4 with resistance likely at 760.1 and
768.7. A positive signal for trend short-term was given on a close over the
9-bar moving average. A bearish signal was triggered on a crossover down in the
daily stochastics. Stochastics turning bearish at overbought levels will tend to
support lower prices if support levels are broken. The next downside objective
is 741.4. The market is approaching overbought levels with an RSI over 70.

GOLD (JUN): Support for gold today comes in near
415.08, while resistance is pegged at 420.88. Daily stochastics have risen into
overbought territory which will tend to support reversal action if it occurs.
The near-term upside target is at 420.88. It is a slightly negative indicator
that the close was under the swing pivot. The close above the 9-day moving
average is a positive short-term indicator for trend.

 

COPPER MARKET RECAP

3/25/2004

While the copper market showed some significant
weakness early in the session the market managed to reject part of the
aggressive early selling. We have to think that the strong gains in the stock
market fostered some short covering in copper. However, the copper market
remains in a sloppy condition and is still generally overbought technically so
the recent back and forth action does have the potential to spark long term stop
loss selling. The market seemed to be unduly impacted by stories that Chinese
copper production was rising and that could lead to lower Chinese copper
imports.

 ^next^

ENERGY MARKET RECAP

3/25/2004

The energy market weakened as the market rushed
to factor in a near term rise in US crude inventories. With warmer weather in
place the energy market was finally able to comprehend the potential for a
seasonal demand slide and that fostered overly long funds to exit positions.
With a number of markets seeing aggressive fund liquidation the weakness in the
energy complex might be a pattern of things to come. The surprising thing is
that energy prices decided not to rally off rumors that terrorist attacks were
possibly in the works for US refineries. In other words, the usual standard
bullish stories were of no interest to the energy markets and that hints at a
change in sentiment.

Technical Outlook

#ENERGIES 3/26/2004: CRUDE OIL (MAY): More
selling pressure is likely given yesterday’s gap lower price action on the day
session chart. The defensive setup, with the close under the 2nd swing support,
could cause some early weakness. Support for crude is keyed on 35.04 and below
there at 34.74, with resistance pegged at 35.99 and 36.64. The close below the
9-day moving average is a negative short-term indicator for trend. 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 34.74.

UNLEADED GAS (MAY): A bearish signal was
triggered on a crossover down in the daily stochastics. Stochastics turning
bearish at overbought levels will tend to support lower prices if support levels
are broken. The next downside objective is 107.27. There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. Resistance today is at 114.67, while support should be found
around 107.27. A negative signal for trend short-term was given on a close under
the 9-bar moving average.

HEATING OIL (MAY): The defensive setup, with the
close under the 2nd swing support, could cause some early weakness. Heating oil
should encounter support around 85.82, with resistance is at 91.12. The close
below the 9-day moving average is a negative short-term indicator for trend.
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
85.82. More selling pressure is likely given yesterday’s gap lower price action
on the day session chart.

 

CORN MARKET RECAP

3/25/2004

While commercial buyers seemed to be active on
the break, speculative long liquidation selling and weakness in the wheat market
helped pushed the market sharply lower into the close. The jump in soybeans
helped to stabilize the market early in the session and the strong export sales
news was enough to slow the pace of fund long liquidation selling which was
active yesterday. Weekly export sales came in at 1.1924 million tons as compared
with 800,000-1.2 million tons expected. All of the sales were for old crop as
compared with 628,500 tons necessary each week to reach the USDA projection.
Cumulative sales have reached 70.7% of the forecast for the season as compared
with 67.5% on average for this time of the year. Japan was the best buyer for
the week at 553,200 tons. News that China has already sold their planned exports
of 1.4 million tons for the first half of the year helped to provide some
underlying support. China exported 16.4 million tons last year. The
International Grain Council pegged 2003/2004 world coarse grain production at
903 million tons and consumption at 934 million tons. Ending stocks were pegged
at just 132 million tons as compared with 163 million last year. The focus of
attention in the next several trading sessions is likely to shift to positioning
ahead of key reports next week on planted acreage and for March 1st stocks.

Technical Outlook

#CORN (MAY) 3/26/2004: 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 301 1/4. It is a slightly
negative indicator that the close was under the swing pivot. Market resistance
comes in at 313 3/4 today, with support at 301 1/4. The close below the 9-day
moving average is a negative short-term indicator for trend.

 

SOY COMPLEX RECAP

3/25/2004

Weakness in meal and oil helped pull the soybean
market lower late in the session to a mixed close. While July and November
soybeans experienced lower closes, the market was able to hold yesterday’s lows
which is somewhat supportive as the sweeping reversals from Wednesday were not
confirmed. A move under this weeks lows, however, could trigger significant long
liquidation selling from speculators who are thought to be holding a hefty net
long position. The Census crush report showed February crush at 131.39 million
bushels as compared with trade expectations in the 128.5-131.7 range. The crush
pace for the first 6 months of the season is barely down from last year while
the USDA maintains a drop for the season of 9.3%. Oil stocks were pegged at
1.988 billion pounds as compared with trade expectations at 1.996-2.09 billion
pounds. With the crush at the high end of estimates, the low oil stocks indicate
much stronger than expected domestic usage for oil. Meal stocks were pegged at
415,788 tons which was above the average trade estimate at near 352,000 tons.
Weekly export sales came in at 216,200 tons as compared with 0-200,000 expected.
Old crop sales were 214,700 tons as compared with 39,900 tons necessary each
week to reach the USDA projection. Mexico, Indonesia and China were the best
buyers. Cumulative sales have reached 96.1% of the forecast for the season as
compared with 86.7% on average for this time of the year. For meal, sales came
in at 42,800 tons as compared with 25,000-50,000 expected and 22,900 tons
necessary each week to reach the USDA projection. Cumulative sales have reached
83.3% of the forecast for the season as compared with 70.1% on average for this
time of the year. Oil sales came in at 6300 tons as compared with expectations
at 0-5,000 tons. The sales and crush pace remains too high and threatens to
drive ending stocks below the current USDA projection at 125 million bushels;
already a 27-year low. Meal basis was weaker. The focus of attention in the next
several trading sessions is likely to shift to positioning ahead of key reports
next week on planted acreage and for March 1st stocks.

Technical Outlook

#SOYBEANS (MAY) 03/26/04 The market tilt is
slightly negative with the close under the pivot. The next area of resistance is
around 1040 and 1051, while 1st support hits today at 1017 and below there at
1005. The market’s close on the 9-day moving average is neutral. Stochastics
turning bearish at overbought levels will tend to support lower prices if
support levels are broken. The next downside objective is 1005.

MEAL (MAY): 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 310.2. The upside daily closing price
reversal gives the market a bullish tilt. First resistance comes in at 324.0,
with support at 315.5. The close above the 9-day moving average is a positive
short-term indicator for trend. It is a slightly negative indicator that the
close was under the swing pivot. The market is becoming somewhat overbought now
that the RSI is over 70.

BEAN OIL (MAY): A negative signal for trend
short-term was given on a close under the 9-bar moving average. A bearish signal
was triggered on a crossover down in the daily stochastics. The next downside
objective is 33.04. It is a slightly negative indicator that the close was lower
than the pivot swing number. Daily swing resistance is found at 34.07 and above
there at 34.50. Support should be encountered at 33.34 and 33.04.

 

WHEAT MARKET RECAP

3/25/2004

After contract highs on Monday, July wheat pushed
lower for the third session in a row as the focus of attention is clearly on the
new crop situation and the weather outlook as very strong export news does not
seem to be enough to sustain the uptrend. Weekly export sales came in at 789,900
tons as compared with 400,000-600,000 expected. Old crop sales were 689,900 tons
as compared with 214,700 tons necessary each week to reach the USDA projection.
Cumulative sales have reached 92.7% of the forecast for the season as compared
with 85.1% on average for this time of the year. The market also found support
from daily purchases of 45,000 tons of US wheat to South Korea and 81,000 tons
of US wheat to Japan. An increase in the speculative margin requirements was
seen as a slightly negative factor for the market and the 6-10 day forecast from
the National Weather Service which called for above normal to normal
precipitation in the southern plains was also seen as a potentially bearish
factor. The International Grain Council pegged world wheat production for the
2004/2005 season at 601 million tons from 552 million this past year. World
consumption was pegged at 601 million tons from 588 million last year. The EU
sold 51,200 tons of intervention wheat at their weekly tender. New crop
conditions in Europe and Eastern Europe look favorable for early in the season.
The focus of attention in the next several trading sessions is likely to shift
to positioning ahead of key reports next week on planted acreage and for March
1st stocks.

Technical Outlook

#WHEAT (MAY) 3/26/2004: The market tilt is
slightly negative with the close under the pivot. Expect near-term support
around 403 2/4 and below there at 399, with resistance levels at 412 3/4 and
418. A positive signal for trend short-term was given on a close over the 9-bar
moving average. Rising stochastics at overbought levels warrant some caution for
bulls. The next upside objective is 418.

 

LIVE CATTLE RECAP

3/25/2004

April cattle closed lower for the 7th session in
a row as a sharp drop in the beef market and weakness in the cash market this
week kept the market in a long liquidation mode. Boxed-beef cut-out values for
choice 600-750 pound cuts were down 50 cents to $140.27 as compared with $144.21
last week at this time. Other beef cuts were down $1.12 to $1.77 on the session.
Ideas that cattle supplies will be increasing in the weeks just ahead and weak
packer profit margins helped to pressure the market. With poor margins,
slaughter is not coming in as high as expected. Slaughter this week has reached
477,000 head as compared with 488,000 last week and 493,000 head last year. A
lack of exports and expectations for a continued downtrend in the cash market
added to the bearish tone.

Technical Outlook

#CATTLE (JUN) 3/26/2004: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
next downside objective is 72.25. The market has a slightly positive tilt with
the close over the swing pivot. Support should be encountered at 72.70 and below
there at 72.25. Market resistance is at 73.50 and then again at 73.85. The daily
closing price reversal up is a positive indicator that could support higher
prices. A negative signal for trend short-term was given on a close under the
9-bar moving average.

 

LEAN HOGS RECAP

3/25/2004

April hogs pushed moderately higher led by strong
speculative buying after the early break failed to attract much long liquidation
selling. The surge to new all-time highs for March bellies with a limit-up
trading session helped to shift the trade psychology at mid-session and
supported the hog market. The market was lower early in the session with
positioning ahead of the quarterly Hogs and Pigs report for release on Friday.
The discount of futures to the cash market provided some support but fund buying
turned active late in the session to support the solid gains. The 2-day Lean
Index was up 27 cents to $68.40 as compared with $66.40 one week ago.

Technical Outlook

#HOGS (JUN) 3/26/2004: Market positioning is
positive with the close over the 1st swing resistance. Resistance levels comes
in at 72.70 and 73.47 today, while support is around 70.57 and then 69.22. The
outside day up gives the market a positive tilt. The upside daily closing price
reversal gives the market a bullish tilt. The close above the 9-day moving
average is a positive 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 69.22.

 

COCOA MARKET RECAP

3/25/2004

Cocoa prices attempting to move to a new higher
trading range but then set back aggressively and finished moderately off the
high of the day. Small spec selling seemed to settle into the trade and that
could end up sending the market back down to the recent harvest lows. We suspect
that both the funds and small spec positioning is in the process of moving back
into a net short posture. The fundamentals hardly offer much in the way of an
argument against more selling as higher mid crop projections are the last fresh
piece of news and that news was bearish. It should be noted that the Press was
reporting late Thursday that a number of rebel officials had quit the Ivory
Coast Government and if that is the case it could be very difficult to force
cocoa prices consistently lower.

Technical Outlook

COCOA (MAY) 03/26/04 The close below the 1st
swing support could weigh on the market. Cocoa should run into resistance at
1497 and above there at 1539 with support at 1427 and 1399. Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The next
upside target is 1538.50.

 

COFFEE MARKET RECAP

3/25/2004

July coffee closed 370 points and in a major
price washout. In fact, coffee managed to take out the last month’s trade with
the decline Thursday. As in a number of other markets it would seem that
commodity funds decided to dump some positions and with the charts seeing
several support levels violated the chance for more selling seems high. However,
there were reports of roaster buying which means that commercial players see
some value in coffee prices around the January through March consolidation lows.
The recent fund positioning in coffee was a record high and that also suggests
more selling is ahead. London coffee made a contract low in the morning trade
and that leaves the US market drastically overvalued.

Technical Outlook

COFFEE (MAY) 3/26/04 The gap lower price action
on the day session chart is a bearish indicator for trend. There could be some
early pressure today given the market’s negative setup with the close below the
2nd swing support. The 9-day RSI under 30 indicates the market is approaching
oversold levels. Negative momentum studies in the neutral zone will tend to
reinforce lower price action. The next downside objective is now at 69.50. The
Coffee contract should run into resistance at 72.40 and above there at 74.10
with support at 70.1 and 69.50. The market’s short-term trend is negative as the
close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

3/25/2004

May sugar collapsed to close 53 lower on the
session with a wild 65 point range. Active long liquidation from speculators
emerged to drive the market sharply lower after the weak action in London helped
turn the price outlook sour. Talk of surplus stocks in the world and the outlook
for a record crop from Brazil for the 2004/2005 season helped to pressure the
market. Cash activity is slow at the recent higher price level due to record
high freight rates and expectations for weaker prices ahead. Syria is in the
market for 26,000 tons of raw or white sugar and there is talk that India may
import near 500,000 tons of raw sugar, some for re-export. Russia has produced
639,230 tonnes of white from imported raw sugar so far this year as compared
with 826,420 tonnes last year at this time.

Technical Outlook

#SUGAR (MAY) 3/26/2004: The defensive setup, with
the close under the 2nd swing support, could cause some early weakness. Swing
resistance comes in at 7.37, with support found at 6.07. 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 6.07.

 

COTTON MARKET RECAP

3/25/2004

Old crop cotton pushed sharply lower on the
session led by active long liquidation from speculators but December pushed
higher from ideas that cotton acreage is declining due to a shift to soybean
plantings in the south. While the cash fundamental situation appears to be in a
bullish set-up, the market is experiencing heavy selling from merchants and long
liquidation selling from the speculator. The trade focus is shifting to the new
crop situation and the potential for a significant boost in world production for
the coming year. Weekly export sales came in at 190,300 bales as compared with
200,000-300,000 bales expected. Old crop sales were 122,700 bales as compared
with 62,700 bales necessary each week to reach the USDA projection. Cumulative
sales have reached 90.2% of the forecast for the season as compared with 92% on
average for this time of the year.

Technical Outlook

#COTTON (MAY) 3/26/2004: A negative signal for
trend short-term was given on a close under the 9-bar moving average. Bearish
daily studies indicate selling minor rallies this session. The close below the
1st swing support could weigh on the market. Next resistance area comes in at
65.22 and then again at 66.53, while support is targeted at 63.18 and 62.45. A
bearish signal was triggered on a crossover down in the daily stochastics. The
next downside objective is 62.45.