One Reason To Be Bullish On Stocks

Technical Outlook

#BONDS (JUN) 04/19/04: With the close higher than
the pivot swing number, the market is in a slightly bullish posture. Near-term
resistance for bonds is at 108.25 and then again at 109.08, while swing support
hits at 107.25 and below there at 107.08. 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 107.08. The 9-day RSI under 30 indicates the market is approaching
oversold levels.

T-NOTES(JUN) The daily stochastics gave a bullish
indicator with a crossover up. The near-term upside objective is at 112.10. It
is a mildly bullish indicator that the market closed over the pivot swing
number. Near-term resistance for the T-Notes is at 112.01 and then again at
112.10, while swing support hits at 111.10 and below there at 110.28. 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.

 

STOCK INDICES RECAP

4/16/2004

Finally the stock market managed to catch a bull
wave and that wave was mostly provided by the US Federal Reserve. The Fed in a
number of speeches calmed interest rate fears harbored by the market and that
allowed the trade to ratchet upward. It would also seem like the tensions in
Iraq were tempering slightly as US officials were supposedly undertaking talks
outside of Fallujah. In the end, the favorable IBM earnings also contributed to
the bullish tilt and it the Fed is going to allow much greater growth before
hiking rates investors should be bullish toward stocks.

Technical Outlook

#S&P500 (JUN) 04/19/04: With the close over the
1st swing resistance number, the market is in a moderately positive position.
Underlying support comes in at 1128.75 and 1121.73, with overhead resistance at
1139.25 and 1142.73. The market’s short-term trend is negative as the close
remains below the 9-day moving average. The major trend could be turning up with
the close back above the 40-day moving average. Momentum studies trending lower
at mid-range should accelerate a move lower if support levels are taken out. The
next downside objective is now at 1121.73.

S&P E-Mini (JUN): Momentum studies trending lower
at mid-range could accelerate a price break if support levels are broken. The
next downside objective is 1117.25. The market setup is supportive for early
gains with the close over the 1st swing resistance. The market back below the
40-day moving average suggests the longer-term trend could be turning down.
Near-term resistance for the S&P Mini is at 1140.50 and then again at 1145.25,
while swing support hits at 1126.50 and below there at 1117.25. A negative
signal for trend short-term was given on a close under the 9-bar moving average.

NASDAQ (JUN) 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 1463.50 and above there at
1473.75 with support at 1442.50 and 1431.75. Negative momentum studies in the
neutral zone will tend to reinforce lower price action. The next downside target
is 1431.8.

MINI DOW (JUN) 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 10493 and above there at 10525 with support
at 10378 and 10295. Negative momentum studies in the neutral zone will tend to
reinforce lower price action. The next downside target is 10295. The cross over
and close above the 40-day moving average indicates the longer-term trend has
turned up. A positive setup occurred with the close over the 1st swing
resistance.

 

CURRENCY MARKET RECAP

4/16/2004

The Dollar was overbought coming into the action
Friday and failed to follow through on the upside. However, with US numbers in
general disappointing and unemployment conditions in the US tempering slightly
we can understand some light profit taking in the Dollar. There really wasn’t a
primary big benefactor on the Dollar weakness Friday and that is because the
Dollar wasn’t that weak and the ultra strong housing numbers from the US
discouraged aggressive selling of the Dollar.

Technical Outlook

#CURRENCIES 04/19/04: YEN (JUN): The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative. 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 93.50 and above there at 93.88,
with the yen finding support around 92.42 and below there at 91.72. Momentum
studies are declining, but have fallen to oversold levels. The next downside
target is 91.72.

EURO (JUN): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
1.1842. The market is in a bearish position with the close below the 2nd swing
support number. Swing support for the Euro comes in at 1.1842, with overhead
resistance at 1.2096. The market’s short-term trend is negative as the close
remains below the 9-day moving average. The major trend is down with the cross
over back below the 40-day moving average. The gap down on the day session chart
is bearish with more selling pressure possible today.

 

PRECIOUS METALS RECAP

4/16/2004

The gold market managed an impressive rally
Friday and did so without really seeing much direction from the Dollar. We also
think that comments from the Fed and the Bank of China that they were willing to
hold off on interest rate hikes also breathed live back into the metals on
Friday. Some traders also suggested that uncertainty toward the US economy
remains in place as the Industrial Production was much weaker than expected and
those readings came on top of rising initial claims on Thursday. As long as the
world’s central banks hold off on tightening, the potential for inflation lives
on.

Technical Outlook

#P-METALS 04/19/04: SILVER (MAY): With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
Initial support for silver is at 704.0 and below there at 693.0 with resistance
likely at 716.1 and 725.0. The moving average crossover down (9 below 18)
indicates a possible developing short-term downtrend. Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
693.0.

GOLD (JUN): Support for gold today comes in near
395.20, while resistance is pegged at 406.80. Daily stochastics are trending
lower, but have declined into oversold territory. The next downside objective is
now at 395.20. With the close over the 1st swing resistance number, the market
is in a moderately positive position. The market’s short-term trend is negative
as the close remains below the 9-day moving average.

 

COPPER MARKET RECAP

4/16/2004

The copper market exploded and did so because the
funds were reportedly jumping into the market on the longside. There were also
some labor unrest reports that served to fuel concerns above supply and with the
market thinking that a severe deficit might be seen this summer, the threat of
any additional lost supply is not to be taken lightly. The Codelco facility that
was reporting protests outside its facility suggested that production was not
impacted. However, in a severe deficit condition one can’t wait until the
disruption is a reality.

 

ENERGY MARKET RECAP

4/16/2004

The energy complex faded in the action Friday but
the trade thinks the action was mostly profit taking. Early in the session the
market saw forecasts from OPEC that 2004 demand was set to rise by 300,000
barrels per day. However, while ongoing tensions inside Iraq left the market
concerned about Iraqi export flow, the fact that US officials were undertaking
talks outside of Fallujah might have been seen as a bearish develop for oil
prices. Others suggested that sagging Industrial production numbers from the US
were undermining the outlook for the airlines stocks and that in turn called
demand into question. With the much warmer than normal weather in the Midwest
some might suggest that the seasonal supply rebuilding might be taking place.

Technical Outlook

#ENERGIES 04/19/04: CRUDE OIL (JUN): The daily
closing price reversal down puts the market on the defensive. It is a mildly
bullish indicator that the market closed over the pivot swing number. Support
for crude is keyed on 36.62 and below there at 36.21, with resistance pegged at
37.37 and 37.71. 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 37.71.

UNLEADED GAS (JUN): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 118.57. It is a slightly negative indicator that the close
was lower than the pivot swing number. Resistance today is at 118.57, while
support should be found around 114.57. 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 (JUN): It is a mildly bullish
indicator that the market closed over the pivot swing number. Heating oil should
encounter support around 92.34, with resistance is at 97.14. 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 97.14. The rally brought the market to a new contract
high. The daily closing price reversal down puts the market on the defensive.

 

CORN MARKET RECAP

4/16/2004

July corn lost 16 3/4 cents on the week with
December down 25 1/2 cents. Traders equate good weather for planting as a
bearish factor as early planting progress would suggest increased plantings and
early planted corn has a better chance of higher yields. Traders expect a record
pace for Monday’s weekly crop progress report. December corn led the recovery
bounce on the session with the market up as much as 10 cents on the session as
fund and commercial buyers were active. A lack of fund selling pressures from
soybeans and other commodity markets and a firm cash market tone helped to
support. Cash dealers in central Illinois pushed bids up by 3-4 cents in order
to find a level where producers might sell. The good weather for fieldwork has
discouraged producer selling and so has the recent break in futures. In
addition, cash discounts for Argentina corn have narrowed significantly in the
past two weeks. The trade is trying to access the impact of perfect planting
weather on corn planted acreage as early plantings have a tendency to support an
increase in acreage above intentions and also correlates with higher yields in
the long run if timely rains occur. South Korea ought 110,000 tons of optional
origin corn overnight. Short-term support for July corn comes in at 314 1/2 with
resistance at 323 and 327 1/2.

Technical Outlook

#CORN (JUL) 04/19/04: Momentum studies trending
lower at mid-range should accelerate a move lower if support levels are taken
out. The next downside objective is now at 313. The market’s close above the 2nd
swing resistance number is a bullish indication. Market resistance comes in at
327 today, with support at 313. The market’s short-term trend is negative as the
close remains below the 9-day moving average.

 

SOY COMPLEX RECAP

4/16/2004

July soybeans closed 23 cents lower on the week
after a 2-day range of over 80 cents. November soybeans were down 46 cents on
the week as perfect weather for early fieldwork could support increased
plantings. Ideas that China is unlikely to take action to slow their economy and
a hint of inflation in other commodity markets this morning (copper, silver,
gold, sugar, etc) helped the market recovery after the sharply lower opening.
After liquidating 25,000 contracts of their net long position yesterday, traders
believe that the funds have exited most of their net long and that the lack of
long liquidation selling could help to stabilize the market. The CFTC
Commitment-of-Traders report for this afternoon will include data through
Monday, April 12th instead of Tuesday which is normal as a major commodity house
has a large-trader reporting problem for April 13th. Crop production estimates
from Brazil are still coming in well below the recent USDA forecast which may
have helped provide some support as well. South Korea bought 25,000 tons of US
soybeans and 25,000-30,000 tons of South American meal overnight and the
Philippines bought 30,000 tons of Argentina meal. Short-term support for July
soybeans comes in at 957 and 932 1/2 with 979 1/4 and 988 3/4 as resistance.

Technical Outlook

#SOYBEANS (JUL) 04/19/04: The daily closing price
reversal up is positive. It is a slightly negative indicator that the close was
lower than the pivot swing number. The next area of resistance is around 978 and
989 1/2, while 1st support hits today at 954 and below there at 941 1/2. 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 941 1/2.

MEAL (JUL): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
296.7. The upside closing price reversal on the daily chart is somewhat bullish.
First resistance comes in at 306.0, with support at 299.5. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. The market’s close below the pivot swing number is a mildly negative
setup.

BEAN OIL (JUL): The market’s close above the
9-day moving average suggests the short-term trend remains positive. 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 32.84. With the close higher than the pivot swing number, the market
is in a slightly bullish posture. Daily swing resistance is found at 32.57 and
above there at 32.84. Support should be encountered at 31.70 and 31.10.

 

WHEAT MARKET RECAP

4/16/2004

July wheat recovered some of week’s losses but
still closed 26 3/4 lower on the week. Commercial buying was noted in the pit
and reports from agronomists in the plains suggest that there was some damage
done with the freeze. The wheat market and commodity markets in general, managed
to recover some of yesterday’s sharp losses as there is a sense that the markets
over-reacted to China concerns yesterday. Pre-weekend short-covering and
strength in the other grains added to the more positive tone early. Commercial
buyers turned active shortly after the opening. Other fundamental news was mixed
as traders are concerned with windy and hot weather (85 degrees) moving into the
plains this weekend after the freeze problems but buying support was limited by
the prospects for a good rain event in the plains into the middle of next week.
Export input is also mixed with traders awaiting news on the Iraq tender for
200,000 tons after Australia received the lion’s share of the last tender. In
addition, traders suspect Egypt could tender for wheat over the weekend as well.
July wheat short-term support comes in at 393 with 398 1/2 and 400 3/4 as
resistance.

Technical Outlook

#WHEAT (JUL) 04/19/04: With the close higher than
the pivot swing number, the market is in a slightly bullish posture. Look for
near-term support at 393 1/2 and below there at 389 1/2, with resistance levels
at 400 1/2 and 403 1/2. 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 389
1/2.

 

LIVE CATTLE RECAP

4/16/2004

The June contract closed 87 lower on the session
and down 60 points on the week. The weekly closing price reversal after hitting
contract highs is a bearish technical development. Weakness in pork and
positioning ahead of the Cattle-of-Feed report helped to pressure. Ideas that
the cash market has peaked and that Canadian cattle will be flowing over the
border soon helped to pressure. Boxed-beef cut-out values were up 33 cents to
163.30 as compared with $156.26 last week at this time. Beef production for the
week was 431.7 million pounds which was up 4.4% from last week (holiday) but
down 10.4% from last year. Cash cattle traded at $86.00 in the panhandle,
unchanged from last week. For the USDA report for this afternoon, traders are
looking for On-Feed supplies near 101.5% (range 99.4-102.3); Marketings at
108.3% (106%-111%) and Placements at 93.8% (range 83.7%-100%).

Technical Outlook

#CATTLE (JUN) 04/19/04: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The next downside
target is 73.95. It is a slightly negative indicator that the close was lower
than the pivot swing number. Support should be encountered at 74.97 and below
there at 73.95. Market resistance is at 77.17 and then again at 78.32. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative.

 

LEAN HOGS RECAP

4/16/2004

June hogs closed 200 lower on the session
(limit-down) and down 435 on the week. The lower close on the week after hitting
contract highs could trigger additional long liquidation selling next week as
the weekly reversal is seen by many technicians as a confirmation of top. The
stiff premium of futures to the cash market combined with the hefty pork
production on the week helped to trigger the aggressive long liquidation selling
from funds. The market is a bit concerned with the hefty net long position of
the speculator with open interest near contract highs. The CME 2-Day lean Index
was up 66 cents to $63.77 as compared with 66.84 on April 1st. Wednesday’s
monthly cold storage report is expected to show a significant out-movement of
bellies for the month. In the past 14 years, there has been only 1 year in which
stocks fell more than 1 million pounds and that was in 2001 when stocks fell
1.714 million pounds. In 9 of the 14 years, stocks have increased by more than 3
million pounds with 6 years showing a jump in excess of 8 million pounds. Pork
production for the week was 395.1 million pounds, up 6% from last year.

Technical Outlook

#HOGS (JUN) 04/19/04: The market is in a bearish
position with the close below the 2nd swing support number. Resistance levels
comes in at 71.95 and 73.67 today, while support is around 69.65 and then 69.07.
The market’s short-term trend is negative as the close remains below the 9-day
moving average. Momentum studies trending lower at mid-range should accelerate a
move lower if support levels are taken out. The next downside objective is now
at 69.07.

 

COCOA MARKET RECAP

4/16/2004

The cocoa market saw the small spec trade throw
in the towel Friday as the market fell through a number of critical chart
support levels. We also think that the funds were sellers and that the upcoming
COT report will dramatically overstated the magnitude of the small spec long and
will also understate the size of the net fund short. In other words, the
technicals are oversold but the fundamentals don’t offer a reason to bottom. The
US grind disappointed the trade with a dismal increase in the grind of 1.25%.
Without ultra strong demand the cocoa market sees higher supply overcome the
market.

Technical Outlook

COCOA (JUL) 04/19/04 There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. Cocoa should run into resistance at 1368 and above there at 1382
with support at 1345 and 1336. 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 1335.75.

 

COFFEE MARKET RECAP

4/16/2004

July Coffee closed 50 lower on the session and
down 280 on the week as light fund selling and a lack of new buying interest
from roasters helped to pressure. Traders believe that roasters are booked ahead
and don’t need to extend coverage unless there is a real bargain to be had. The
market had mixed feelings on the slightly bearish trade action. Some believe
that it was impressive that the market managed to hold above this weeks low
while others see a negative reaction to supportive fundamental news on the
monthly Green Coffee stocks report as bearish. Brazil coops for the end of March
were pegged at 3.21 million bags, down 45% from last year (5.84 million bags).

Technical Outlook

COFFEE (JUL) 4/19/04 The close below the 1st
swing support could weigh on the market. Momentum studies are declining, but
have fallen to oversold levels. The next downside objective is now at 71.05. The
Coffee contract should run into resistance at 72.70 and above there at 73.25
with support at 71.6 and 71.05. The market’s short-term trend is negative as the
close remains below the 9-day moving average. Daily studies pointing down
suggests selling minor rallies.

 

SUGAR MARKET RECAP

4/16/2004

July sugar closed 9 points higher on the session
but down 11 points on the week. Strength in London and continued positive tone
for the longer-term fundamentals helped support. Trader house buying emerged on
the lower opening after the market managed to hold above the week’s low. Buying
was limited by expectations that the COT reports, released after the close,
would show a hefty net long position from the speculator. Weather in Brazil
growing areas looks favorable with scattered rains and normal temperatures into
the middle of next week.

Technical Outlook

#SUGAR (JUL) 04/19/04: The upside closing price
reversal on the daily chart is somewhat bullish. It is a mildly bullish
indicator that the market closed over the pivot swing number. Swing resistance
comes in at 7.18, with support found at 6.70. 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 7.18.

 

COTTON MARKET RECAP

4/16/2004

July cotton closed 27 lower and 74 off its high
while May cotton closed up 59 in a less volatile trade Friday than occurred
earlier in the week as traders had been adjusting positions ahead of the May
option expiration on April 16th. Stronger than expected export sales this past
week failed to provide support to July cotton. The Cotlook A Index value was
69.70, +0.30. The US Memphis quote and recently the Australian quote within the
A Index indicated that supplies of the higher “A” quality cotton associated with
the Cotlook Index are becoming tighter and world cotton users may soon be
interested in buying lower quality cotton from the US. July cotton remains in a
solid downtrend with near-term support at 61.80 and below there at 61.50.

Technical Outlook

#COTTON (JUL) 04/19/04: 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 62.89 and then again at 63.52,
while support is targeted at 61.84 and 61.42. Positive momentum studies in the
neutral zone will tend to reinforce higher price action. The next upside target
is 63.52.