New Wrench Thrown Into Oil Market…

Technical Outlook

#BONDS (SEP) 06/21/04: The downside closing price
reversal on the daily chart is somewhat negative. With the close higher than the
pivot swing number, the market is in a slightly bullish posture. Near-term
resistance for bonds is at 105.19 and then again at 106.04, while swing support
hits at 104.24 and below there at 104.14. 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 106.04.

T-NOTES(SEP) The daily closing price reversal
down puts the market on the defensive. Momentum studies are trending higher from
mid-range which should support a move higher if resistance levels are
penetrated. The near-term upside objective is at 108.30. It is a mildly bullish
indicator that the market closed over the pivot swing number. Near-term
resistance for the T-Notes is at 108.20 and then again at 108.30, while swing
support hits at 108.05 and below there at 108.00. The market’s short-term trend
is positive on a close above the 9-day moving average.

 

STOCK INDICES RECAP

6/18/2004

Quadruple witching with 4 different futures &
options contracts expiring today added to the market’s volatility. The market
ignored reports of a wider 1st qtr current account deficit and focused on
bullish company specific news for Viacom and Microsoft. Mostly good economic
news this week with the Fed still planning on only raising rates slowly helped
to keep a floor under stock prices. However, further upside gains may be hard
fought since the economic report calendar is thin through month end and
geopolitical violence may intensify ahead of the shift of power to
self-government in Iraq at the end of the month.

Technical Outlook

#S&P500 (SEP) 06/21/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Underlying support
comes in at 1129.30 and 1124.50, with overhead resistance at 1139.10 and
1144.10. 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 1124.50.

S&P E-Mini (SEP): Stochastics turning bearish at
overbought levels will tend to support lower prices if support levels are
broken. The next downside objective is 1120.63. The market has a slightly
positive tilt with the close over the swing pivot. Near-term resistance for the
S&P Mini is at 1140.75 and then again at 1146.63, while swing support hits at
1127.75 and below there at 1120.63. A negative signal for trend short-term was
given on a close under the 9-bar moving average.

NASDAQ (SEP) The downside closing price reversal
on the daily chart is somewhat negative. 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 1480.75 and above there at
1495.38 with support at 1457.25 and 1448.38. Negative momentum studies in the
neutral zone will tend to reinforce lower price action. The next downside target
is 1448.4.

MINI DOW (SEP) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. The market should
run into resistance at 10449 and above there at 10490 with support at 10347 and
10286. 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 10286. A positive setup occurred with
the close over the 1st swing resistance.

 

CURRENCY MARKET RECAP

6/18/2004

A wider than expected 1st quarter current account
deficit of 144.9 bil vs estimates for a $141 bl deficit triggered broad based
selling in the Dollar Friday. Escalating violence in the Middle East, with
newswires reporting that the American being held hostage in Saudi Arabia was
beheaded added to negative Dollar sentiment. Traders are fearful that more
violence and terrorist attacks will be seen leading up to the shift of power to
Iraqi self rule at month end. With the Fed not on an aggressive tightening track
also cools the bull’s case since other country’s suck as the UK and Switzerland
seem to be on a more aggressive rate tightening pace.

Technical Outlook

#CURRENCIES 06/21/04: YEN (SEP): The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. 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 92.44 and above there at 92.70, with
the yen finding support around 91.96 and below there at 91.74. The daily
stochastics have crossed over up which is a bullish indication. The next upside
target is 92.70.

EURO (SEP): 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 1.2002. The market is in a bearish position
with the close below the 2nd swing support number. Swing support for the Euro
comes in at 1.2002, with overhead resistance at 1.2198. The market’s short-term
trend is positive on a close above the 9-day moving average. The gap down on the
day session chart is bearish with more selling pressure possible today.

 

PRECIOUS METALS RECAP

6/18/2004

A broad based Dollar sell-off triggered sharply
higher August gold prices Friday with the market pushing through several key
resistance levels. Data showing a wider US 1st quarter current account deficit
renewed investor interest in gold and escalating terrorist attacks in Iraq and
Saudi Arabia supported gold on safe-haven buying. Gains in energy prices also
underpinned the metal on inflation concerns.

Technical Outlook

#P-METALS 06/21/04: 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 595.5 and below there at 591.2 with resistance
likely at 601.7 and 605.0. 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 601.7. The gap upmove on the day session chart is a bullish indicator for
trend.

GOLD (AUG): Support for gold today comes in near
391.80, while resistance is pegged at 399.00. The daily stochastics gave a
bullish indicator with a crossover up. The near-term upside objective is at
399.00. 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. The gap up on the day session chart gave a bullish indicator and
more follow through could be seen this session.

 

COPPER MARKET RECAP

6/18/2004

September copper traded weaker after the market
failed on an early attempt to push through resistance at 120.50. The market had
seen solid gains this past week on declines in LME copper stocks and supportive
US economic news. The sharply weaker Dollar Friday and solid gains in the stock
market failed to provide support as technically overbought conditions and profit
taking dominated trade. A major trade house predicted copper prices to remain
strong through 2005 due to a widening of the world supply deficit. In addition,
they expected China copper consumption growth to be 10% despite government
efforts to slow growth.

 

ENERGY MARKET RECAP

6/18/2004

Energy markets were volatile Friday with prices
rallying early on expectations that Iraq’s pipeline repairs could take longer
than expected to only be pushed lower on news headlines that Iraq could resume
partial exports by the weekend. However, escalation violence in Iraq and other
Middle East countries targeting oil facilities ahead of the hand over to
self-government rule in Iraq at month end should keep a solid floor under the
market as few traders would want to be short ahead of the weekend. While an Iraq
official thought repairs on the pipeline could result in 700,000 barrels to be
pumped on Saturday, striking Norwegian oil workers is expected to cut Norway’s
output by 400,000 barrels per day which should keep the market skittish about
supplies. Natural gas traded lower Friday hit by week end profit taking after
making sharp gains this past week. Cool weather forecasted for the East Coast
next week added to the negative tone.

Technical Outlook

#ENERGIES 06/21/04: CRUDE OIL (AUG): It is a
mildly bullish indicator that the market closed over the pivot swing number.
Support for crude is keyed on 38.69 and below there at 38.28, with resistance
pegged at 39.32 and 39.54. The market’s short-term trend is positive on a close
above the 9-day moving average. Momentum studies are trending higher from
mid-range which should support a move higher if resistance levels are
penetrated. The near-term upside objective is at 39.54.

UNLEADED GAS (AUG): 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 120.74. With the
close higher than the pivot swing number, the market is in a slightly bullish
posture. Resistance today is at 120.74, while support should be found around
116.34. The market’s close above the 9-day moving average suggests the
short-term trend remains positive.

HEATING OIL (AUG): It is a mildly bullish
indicator that the market closed over the pivot swing number. Heating oil should
encounter support around 101.71, with resistance is at 105.11. The market’s
short-term trend is positive on a close above the 9-day moving average. Momentum
studies are trending higher from mid-range which should support a move higher if
resistance levels are penetrated. The near-term upside objective is at 105.11.
The daily closing price reversal down puts the market on the defensive.

 

CORN MARKET RECAP

6/18/2004

July corn closed 11 1/4 cents lower on the week
with December down 10 3/4 cents. July corn is now back to the lowest level since
mid-January and down over 53 cents from the June highs. Strength in soybeans and
some uncertainty over the impact of this week’s rain on the crop conditions for
Monday’s weekly report helped to provide some profit-taking short-covering after
the lower opening. Sparks, a prominent Memphis-based research firm, pegged corn
planted acreage at 81.2 million acres as compared with the USDA current estimate
of 79.004 million acres. Export news is quiet and basis levels were firm.
December corn support comes in at 278 and 274 3/4 with 284 and 288 1/4 as
resistance.

Technical Outlook

#CORN (DEC) 06/21/04: Daily stochastics are
trending lower, but have declined into oversold territory. The next downside
objective is now at 274 3/4. The market’s close below the pivot swing number is
a mildly negative setup. Market resistance comes in at 287 3/4 today, with
support at 274 3/4. The market’s short-term trend is negative as the close
remains below the 9-day moving average.

 

SOY COMPLEX RECAP

6/18/2004

July soybeans closed 26 cents higher on the week
while November soybeans closed up 2 1/2 cents. Bull spreading from commercials
on continued concerns for tight old crop supplies ahead of the harvest helped
support the July contract but a drier than expected weekend in the northern
mid-west helped to pressure November. In addition, there were concerns that
weekend rains of more rain next week could start to impact river traffic with
talk of possible closures of the lock at Davenport, Iowa. Traders continue to
believe that the rains across the Midwest at this time of the year are doing
more good than harm to the crop but many traders believe that crop conditions
could show some deterioration in Monday’s weekly crop condition report. Sparks,
a prominent Memphis-based research firm, pegged soybean planted acreage at 74.4
million acres as compared with the USDA current estimate of 75.411 million
acres. Basis levels were called firm in the cash markets. The lower opening
failed to attract new selling interest as traders await a better picture of next
week’s weather for Monday morning. Some models show continued heavy rains for
next week while other models have taken some of the rains out of the forecast.
Resistance for November soybeans comes in at 684 1/2 with 661 1/2 and 654 as
support levels.

Technical Outlook

#SOYBEANS (NOV) 06/21/04: It is a slightly
negative indicator that the close was lower than the pivot swing number. The
next area of resistance is around 672 1/2 and 680, while 1st support hits today
at 659 1/2 and below there at 654. The market’s close below the 9-day moving
average is an indication the short-term trend remains negative. Momentum studies
are declining, but have fallen to oversold levels. The next downside target is
654.

MEAL (DEC): 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 212.9. The daily
closing price reversal down puts the market on the defensive. First resistance
comes in at 210.3, with support at 206.3. 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.

BEAN OIL (DEC): The market’s close below the
9-day moving average is an indication the short-term trend remains negative.
Momentum studies are declining, but have fallen to oversold levels. The next
downside target is 23.62. It is a slightly negative indicator that the close was
lower than the pivot swing number. The daily closing price reversal up is
positive. Daily swing resistance is found at 24.26 and above there at 24.48.
Support should be encountered at 23.83 and 23.62.

 

WHEAT MARKET RECAP

6/18/2004

July wheat managed to close higher on the weekly
after hitting the lowest level since November 19th on Tuesday. The weekly
reversal helps improve the technical pattern and could attract some
short-covering or new technical buying next week. Traders look for continued
rains over the weekend to keep harvest activity slow for early next week and
that the weekly crop progress report for Monday night to show deteriorating crop
conditions. Sparks, a prominent Memphis-based research firm, pegged spring wheat
planted acreage at 13.4 million acres as compared with the USDA current estimate
of 13.33 million acres. The slowdown in commercial selling due to heavy rains
across Kansas overnight (1/2 to 1 1/2 inches) helped support the early bounce
but a lack of new buying has kept the trade choppy and two-sided into the
mid-session. More significant rains are expected on Saturday and for next week.
Late weakness in the other grains helped limit the support. Taiwan millers
bought 43,520 tons of US wheat. September wheat support comes in at 358 and 354
3/4 with 363 and 373 1/2 as resistance.

Technical Outlook

#WHEAT (DEC) 06/21/04: The close equal to the
pivot swing number is a neutral directional indicator. Look for near-term
support at 369 and below there at 367 1/4, with resistance levels at 373 and 375
1/4. The market’s close below the 9-day moving average is an indication the
short-term trend remains negative. Momentum studies are declining, but have
fallen to oversold levels. The next downside target is 367 1/4.

 

LIVE CATTLE RECAP

6/18/2004

The market was mixed with choppy, two-sided trade
with light volume trade ahead of the USDA Cattle-on-Feed report released after
the close. The average trade estimates for June 1st Cattle-on-Feed was at 100.2%
of last year (range 99-101.5). Placements during May were pegged at 100.7% of
last year (98-104.3) and marketings at 91.5% of last year (89.7-93). Talk that
packer margins have been squeezed enough to cause packers to back away from the
slaughter helped to trigger the early weakness but strength in the pork market
and active buying in the nearby June contract helped boost futures higher into
the close. Boxed beef cut-out vales (for choice 600-750lbs) dropped $1.21 to
$145.48 at mid-session as compared with $153.64 last week at this time.

Technical Outlook

#CATTLE (AUG) 06/21/04: Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
85.30. With the close higher than the pivot swing number, the market is in a
slightly bullish posture. Support should be encountered at 86.32 and below there
at 85.30. Market resistance is at 87.77 and then again at 88.20. The daily
closing price reversal up is positive. The moving average crossover down (9
below 18) indicates a possible developing short-term downtrend.

 

LEAN HOGS RECAP

6/18/2004

The market pushed higher for the third session in
a row and challenged Monday’s highs with strength in pork bellies and a
perception that cash markets will rally next week helping to provide support.
After holding the gains into mid-session, July and August hogs moved to new
highs for the week and closed sharply higher. Cash hogs were steady but the
discount of futures to cash helped provide support. In addition, the market is
anticipating bullish news for the monthly Cold storage report on Monday which
might show belly stocks at or near the smallest on record for the end of May and
ham stocks near 11-year lows. The 2-day lean index for the period ending June
16th was 79.25, down 6 cents from the previous session but up from 78.51 the
previous week.

Technical Outlook

#HOGS (AUG) 06/21/04: The market’s close above
the 2nd swing resistance number is a bullish indication. Resistance levels comes
in at 77.62 and 78.17 today, while support is around 76.12 and then 75.17. 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 78.17.

 

COCOA MARKET RECAP

6/18/2004

An early session fund and spec rally failed to
hold under the weight of origin selling (possibly from Ghana) and fell sharply
after midsession. London also closed weaker after a strong start from industry
buying. Ample supplies are weighing on the market. There were 35 deliveries in
New York today, bringing the total for the delivery period to 63. CSCE warehouse
stocks were at 2,080,834 bags, down 16,614 from yesterday. The market’s collapse
after such a strong start underscores the lack of fundamental support for this
market in the face of apparently ample supplies.

Technical Outlook

COCOA (SEP) 06/21/04 The outside day down and
close below the previous day’s low is a negative signal. The downside closing
price reversal on the daily chart is somewhat negative. The close below the 1st
swing support could weigh on the market. Cocoa should run into resistance at
1364 and above there at 1394 with support at 1321 and 1308. Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
1308.25. Short-term indicators on the defensive. Consider selling an intraday
bounce.

 

COFFEE MARKET RECAP

6/18/2004

September Coffee closed 15 lower on the session
as the early short-covering bounce failed to find new speculative buyers. Warmer
weather in Brazil for harvest and a lack of threatening weather on the horizon
forced September coffee down 725 points for the week. The first day of winter in
Brazil on Monday should show above normal temperatures and there are no cold
weather systems in the forecast through early July. Without some cold weather in
the longer-range models on Monday, more long liquidation is seen as speculators
are thought to still hold a hefty net long position.

Technical Outlook

COFFEE (SEP) 6/21/04 The market tilt is slightly
negative with the close under the pivot. Momentum studies are declining, but
have fallen to oversold levels. The next downside objective is now at 77.45. The
Coffee contract should run into resistance at 78.80 and above there at 79.55
with support at 77.75 and 77.45. The downside crossover (9 below 18) of the
moving averages suggests a developing short-term downtrend.

 

SUGAR MARKET RECAP

6/18/2004

October sugar gapped higher to a new 15-month
high on the opening before finding producer selling and fund related
profit-taking to trigger a sell-off. Once the sell-off picked up steam, fund and
speculative selling drove the market all the way down to below last weeks close
at 724 before October sugar closed at 738, down 37 on the session. The sweeping
reversal from a prominent high could attract more technical selling early next
week. The advancing harvest in Brazil may have attracted the producer selling.
London also closed sharply lower after an early surge to the highest level since
early May.

Technical Outlook

#SUGAR (OCT) 06/21/04: The market’s key reversal
down is a bearish signal. The outside day down is a negative signal. The rally
brought the market to a new contract high. The daily closing price reversal down
puts the market on the defensive. The market is in a bearish position with the
close below the 2nd swing support number. Swing resistance comes in at 8.08,
with support found at 6.84. The market’s short-term trend is negative as the
close remains below the 9-day moving average. The daily stochastic’s gave a
bearish indicator with a crossover down. The next downside objective is now at
6.84.

 

COTTON MARKET RECAP

6/18/2004

Cotton closed slightly higher in quiet trade with
light short-covering helping support the market after the sharp trade for the
first three days of the week helped pressure. Good weather for the delta, the
southeast and even more rain possibilities in west Texas for the weekend helped
to limit the buying support with traders looking for improving crop conditions
for Monday night’s weekly crop progress report. The WTO ruled today that the US
broke global trade rules by paying lavish subsidies to its cotton farmers and
that the subsidies have hurt Brazil producers. Brazil filed the original
complaint. This may have longer-term implications for the extent of US subsides
for cotton.

Technical Outlook

#COTTON (OCT) 06/21/04: 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. Next resistance area comes in at 54.33 and then again at 54.69,
while support is targeted at 53.68 and 53.39. Momentum studies are declining,
but have fallen to oversold levels. The next downside target is 53.39. The 9-day
RSI under 30 indicates the market is approaching oversold levels.