Plenty Of Action On The Dollar Today–Here’s How It Ended Up
BOND MARKET RECAP
11/26/2004
March Bonds closed down 0-17 at 111-23. This was
0-05 up from the low and 0-02 off the high.
March 10 Yr Treasury Notes finished down 0-065 at
112-015, 0-005 off the high and 0-045 up from the low.
The Treasury market cam under pressure late
Thursday night off rumors that the Chinese might be slowing their purchases of
US Treasury bonds. Considering that the US Dollar was also off sharply early in
the Friday morning US action we are a little surprised that US bonds and notes
didn’t come under even more pressure. However, into the US opening the Dollar
managed to bounce and that reduced the international investment rotations
argument somewhat. However, with the US equity markets showing some early
strength we suspect that bond longs were feeling additional pressure. In
retrospect the Treasury market downplayed the Chinese flap but the issue is a
long way from being forgotten.
Technical Outlook
BONDS (MAR) 11/29/2004: The close below the
40-day moving average is an indication the longer-term trend has turned down.
Stochastics are at mid-range but trending higher, which should reinforce a move
higher if resistance levels are taken out. A negative signal for trend
short-term was given on a close under the 9-bar moving average. The close below
the 2nd swing support number puts the market on the defensive. The next upside
target is 112-26. The next area of resistance is around 112-05 and 112-26, while
1st support hits today at 111-03 and below there at 110-21.
TNOTES (MAR) 11/29/2004: Daily stochastics are
trending lower but have declined into oversold territory. The market’s close
below the 9-day moving average is an indication the short-term trend remains
negative. The swing indicator gave a moderately negative reading with the close
below the 1st support number. The next downside target is now at 110-230. The
next area of resistance is around 111-240 and 112-025, while 1st support hits
today at 111-025 and below there at 110-230.
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STOCK INDICES RECAP
11/26/2004
December S&P finished down 0.7 at 1181.2, 6.3 off
the high and equal to the low.
December S&P E-Mini closed down 1 at 1181. This
was 1.75 up from the low and 6.5 off the high.
December Dow closed down 11 at 10515. This was
equal to the low and 10 off the high.
December Dow E-Mini finished down 7 at 10515, 46
off the high and 14 up from the low.
The stock market shook off early negative price
indications from the Asian and European markets to open higher in the US on
Friday morning. Apparently the market was more optimistic about a favorable kick
off to the holiday shopping season, than it was to the potential negatives
arising off the falling Dollar. It certainly helped the stock market to have
outside potential negatives like rising gold and energy prices eliminated from
the equation by market closures. It seems as if many analysts are happy with the
very early retailing flow and that could in effect help extend the recent trend
of bullishness.
Technical Outlook
S&P 500 (DEC) 11/29/2004: Momentum studies are
trending lower from high levels which should accelerate a move lower on a break
below the 1st swing support. The market’s short-term trend is positive on the
close above the 9-day moving average. The daily closing price reversal down puts
the market on the defensive. The market tilt is slightly negative with the close
under the pivot. The next downside target is now at 1175.50. The next area of
resistance is around 1184.50 and 1189.50, while 1st support hits today at
1177.50 and below there at 1175.50.
SP EMINI (DEC) 11/29/2004: Momentum studies are
trending lower from high levels which should accelerate a move lower on a break
below the 1st swing support. The close above the 9-day moving average is a
positive short-term indicator for trend. The daily closing price reversal down
puts the market on the defensive. It is a slightly negative indicator that the
close was under the swing pivot. The next downside objective is now at 1173.94.
The next area of resistance is around 1185.12 and 1190.43, while 1st support
hits today at 1176.88 and below there at 1173.94.
NASDAQ (DEC) 11/29/2004: The rally brought the
market to a new contract high. 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 market’s close above the 9-day moving
average suggests the short-term trend remains positive. The daily closing price
reversal down is a negative indicator for prices. The market’s close below the
pivot swing number is a mildly negative setup. The next downside target is
1567.75. The next area of resistance is around 1584.50 and 1593.75, while 1st
support hits today at 1571.50 and below there at 1567.75.
MINIDOW (DEC) 11/29/2004: Momentum studies
trending lower from overbought levels is a bearish indicator and would tend to
reinforce lower price action. The close below the 9-day moving average is a
negative short-term indicator for trend. The daily closing price reversal down
is a negative indicator for prices. It is a slightly negative indicator that the
close was lower than the pivot swing number. The next downside target is 10462.
The next area of resistance is around 10542 and 10581, while 1st support hits
today at 10482 and below there at 10462.
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CURRENCY MARKET RECAP
11/26/2004
December US Dollar finished down 39 at 8181, 64
off the high and 3 up from the low.
December Euro finished up 1.26 at 132.93, 0.02
off the high and 0.76 up from the low.
December Euro Dollar closed down 0.0025 at
97.525. This was 0.005 up from the low and 0.0025 off the high.
December Canadian Dollar closed up 0.12 at 84.92.
This was 0.3 up from the low and 0.13 off the high.
December British Pound finished up 1.54 at
189.42, 0.16 off the high and 0.61 up from the low.
December Swiss closed up 0.57 at 87.83. This was
0.55 up from the low and 0.1 off the high.
December Japanese Yen closed up 0.33 at 97.59.
This was 0.47 up from the low and 0.08 off the high.
The Dollar exhibited extremely violent action
early Friday morning as rumors were sending prices reeling back and forth.
Initially the trade suggested that the ECB was not primed to intervene and that
caused the Euro to explode and for the Dollar to come apart. However, as the
session extended it became clear that the market lacked the volume to extend the
moves and some profit taking pared the big early moves. We suspect that the BOJ
will become increasingly vocal on the Yen exchange rate with the Dollar but
until there begins to be some coordinated intervention dialogue we are not sure
that a lone central bank can alter the existing trends.
Technical Outlook
YEN (DEC) 11/29/2004: A new contract high was
made on the rally. Daily stochastics have risen into overbought territory which
will tend to support reversal action if it occurs. The market’s close above the
9-day moving average suggests the short-term trend remains positive. The upside
daily closing price reversal gives the market a bullish tilt. With the close
over the 1st swing resistance number, the market is in a moderately positive
position. The next upside objective is 98.04. The 9-day RSI over 70 indicates
the market is approaching overbought levels. The next area of resistance is
around 97.86 and 98.04, while 1st support hits today at 97.32 and below there at
96.95.
EURO (DEC) 11/29/2004: The market rallied to a
new contract high. Momentum studies are trending higher but have entered
overbought levels. A positive signal for trend short-term was given on a close
over the 9-bar moving average. If yesterday’s gap higher on the day session
chart holds, additional buying could develop this session. The market’s close
above the 2nd swing resistance number is a bullish indication. The next upside
target is 133.52. With a reading over 70, the 9-day RSI is approaching
overbought levels. The next area of resistance is around 133.32 and 133.52,
while 1st support hits today at 132.54 and below there at 131.97.
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PRECIOUS METALS RECAP
11/26/2004
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Market Closed due to Holiday!
Technical Outlook
SILVER (DEC) 11/29/2004: Momentum studies
trending lower from overbought levels is a bearish indicator and would tend to
reinforce lower price action. A positive signal for trend short-term was given
on a close over the 9-bar moving average. The market setup is supportive for
early gains with the close over the 1st swing resistance. The next downside
target is 751.6. The next area of resistance is around 765.6 and 768.5, while
1st support hits today at 757.1 and below there at 751.6.
GOLD (DEC) 11/29/2004: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The close above the 9-day moving average is a positive short-term
indicator for trend. A positive setup occurred with the close over the 1st swing
resistance. The near-term upside target is at 450.7. The market is becoming
somewhat overbought now that the RSI is over 70. The next area of resistance is
around 450.2 and 450.7, while 1st support hits today at 448.4 and below there at
447.2.
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COPPER MARKET RECAP
11/26/2004
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Market closed for holiday! Shanghai copper stocks
declined by 1,245 tons to 23,258 tons and Chinese copper prices ended at a new
high Friday morning.
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ENERGY MARKET RECAP
11/26/2004
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Markets closed for Holiday!
Technical Outlook
CRUDE OIL (JAN) 11/29/2004: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. The market’s short-term trend is positive on the close above the
9-day moving average. The daily closing price reversal up on the daily chart is
somewhat positive. The close over the pivot swing is a somewhat positive setup.
The near-term upside objective is at 50.87. The next area of resistance is
around 50.34 and 50.87, while 1st support hits today at 48.54 and below there at
47.27.
UNLEADED (JAN) 11/29/2004: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. A positive signal for trend short-term was given on a
close over the 9-bar moving average. The market’s close below the pivot swing
number is a mildly negative setup. The next upside target is 134.56. The next
area of resistance is around 133.22 and 134.56, while 1st support hits today at
129.28 and below there at 126.67.
HEATING OIL (JAN) 11/29/2004: Daily stochastics
have risen into overbought territory which will tend to support reversal action
if it occurs. A positive signal for trend short-term was given on a close over
the 9-bar moving average. The upside closing price reversal on the daily chart
is somewhat bullish. The market tilt is slightly negative with the close under
the pivot. The next upside objective is 151.58. The next area of resistance is
around 149.57 and 151.58, while 1st support hits today at 143.77 and below there
at 139.99.
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CORN MARKET RECAP
11/26/2004
December Corn finished down 3/4 at 197, 1
3/4 off the high and 1/2 up from the low. March Corn closed down 1 1/4 at 207.
This was 1/4 up from the low and 2 1/4 off the high.
Strong sales and a bullish tone early in the day
failed to attract new buying and the market experienced weakness in the other
grains which helped pressure corn. Corn prices in Brazil are expected to weaken
in the months just ahead as producers make room in storage for a record grain
harvest in Brazil in March of 2005. Weekly export sales came in at 1.319 million
tons as compared with trade expectations at 700,000-900,000 tons and 799,600
tons necessary each week to reach the USDA projection. Japan was the best buyer
at 484,100 tons. Cumulative sales have reached 37.3% of the USDA forecast for
the entire season as compared with 38.4% on average for this time of the year.
South Korea bought 55,000 tons of optional origin corn. The International Grain
Council on Thursday raised their world coarse grain production forecast by 10
million tons to 997 million tons from 914 million tons last year.
Technical Outlook
CORN (MAR) 11/29/2004: The market made a new
contract low on the break. Momentum studies are still bearish but are now at
oversold levels and will tend to support reversal action if it occurs. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative. The outside day down is somewhat negative. The close
below the 2nd swing support number puts the market on the defensive. The next
downside objective is now at 205. The next area of resistance is around 208 1/4
and 210, while 1st support hits today at 205 3/4 and below there at 205.
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SOY COMPLEX RECAP
11/26/2004
January Soybeans finished down 5 1/2 at 548 1/2,
9 1/2 off the high and 2 up from the low. March Soybeans closed down 5 1/4 at
551 1/4. This was 1 3/4 up from the low and 9 1/4 off the high.
January Soymeal closed up 0.1 at 161.2. This was
1.2 up from the low and 1.8 off the high.
January Soybean Oil finished down 0.37 at 20.74,
0.46 off the high and 0.04 up from the low.
Solid export sales and Asian rust already
reported in 6 states with government officials testing Tennessee fields to add
to the list helped support the market early on Friday in the holiday shortened
session. However, long liquidation selling and good weather for Brazil helped
turn the market lower into the mid-session. Weekly export sales for soybeans
1.337 million tons as compared with trade expectations at 600,000-800,000 tons
and 288,000 tons necessary each week to reach the USDA projection. China was the
largest buyer and represented 1.014 million tons of the total. Cumulative sales
have reached 57.2% of the USDA forecast for the entire season as compared with
56.6% on average for this time of the year. Meal sales hit 140,200 tons against
expectations for 75,000-125,000 tons. Cumulative meal sales have reached 52.5%
of the USDA forecast for the entire season as compared with 43.8% on average for
this time of the year. Oil sales were 11,900 tons from 5,000-10,000 tons
expected. Because of the holiday, the Commitment-of-Traders report will be
delayed until Monday afternoon. Rains are expected to spread across key Brazil
soybean areas over the weekend which will help the crop get off to a good start.
Technical Outlook
BEANS (JAN) 11/29/2004: Rising stochastics at
overbought levels warrant some caution for bulls. A negative signal for trend
short-term was given on a close under the 9-bar moving average. The close below
the 1st swing support could weigh on the market. The near-term upside objective
is at 561 3/4. The next area of resistance is around 554 1/4 and 561 3/4, while
1st support hits today at 542 3/4 and below there at 539.
MEAL (JAN) 11/29/2004: Rising stochastics at
overbought levels warrant some caution for bulls. The market’s short-term trend
is positive on the close above the 9-day moving average. It is a slightly
negative indicator that the close was under the swing pivot. The next upside
target is 165.2. The next area of resistance is around 163.6 and 165.2, while
1st support hits today at 161.0 and below there at 159.9.
BEANOIL (JAN) 11/29/2004: The close below the
40-day moving average is an indication the longer-term trend has turned down.
The daily stochastics gave a bearish indicator with a crossover down. Momentum
studies trending lower at mid-range should accelerate a move lower if support
levels are taken out. A negative signal for trend short-term was given on a
close under the 9-bar moving average. The close below the 1st swing support
could weigh on the market. The next downside objective is 20.51. The next area
of resistance is around 21.11 and 21.44, while 1st support hits today at 20.65
and below there at 20.51.
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WHEAT MARKET RECAP
11/26/2004
December Wheat finished down 7 3/4 at 291 1/2, 8 off the high
and 1/2 up from the low. March Wheat closed down 6 1/2 at 303 1/2. This was 1
1/4 up from the low and 6 1/2 off the high.
The solid export sales news failed to provide
support and March wheat moved to a new contract low into the mid-session on
Friday. Weekly export sales came in at 443,400 tons as compared with trade
expectations at 350,000-450,000 tons and 300,000 tons necessary each week to
reach the USDA projection. Guatemala was the largest buyer at 114,100 tons.
Cumulative sales have reached 68.5% of the USDA forecast for the entire season
as compared with 57.6% on average for this time of the year. The fast sales pace
would suggest that the USDA might increase their export forecast in the December
Supply/demand report. The International Grain Council, however, raised their
world wheat production forecast by 1 million tons from last month yesterday to
618 million tons from 554 million tons last year. As a result, World ending
stocks for the 2004/2005 season are now pegged at 138 million tons from 126
million tons last year. Under 308 for March wheat, 298 becomes next downside
swing objective with resistance at 310.
Technical Outlook
WHEAT (MAR) 11/29/2004: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. 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. The next downside target is now at 297. With a reading
under 30, the 9-day RSI is approaching oversold levels. The next area of
resistance is around 306 3/4 and 312 1/4, while 1st support hits today at 299
1/4 and below there at 297.
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LIVE CATTLE RECAP
11/26/2004
December Live Cattle closed up 0.35 at 90.25.
This was 0.55 up from the low and 0.20 off the high.
January Feeder Cattle finished up 0.82 at 103.10,
0.45 off the high and 0.60 up from the low.
After a 400 point gain in the previous two
sessions, February cattle experienced choppy and two-sided trade early in the
session Friday. While the market is showing signs of an overbought condition,
cash markets look firm next week after trading at $89.00 this week, up $4.00
from last week. Volume was light in the holiday shortened trading session. Muddy
feedlot conditions have already caused significant stress to feedlot cattle and
more snow and rain is in the forecast for the southern plains for Sunday, Monday
and Tuesday of next week which could cause the supply of market-ready cattle to
tighten. News that Japanese officials will visit the US and Canada next week in
order to prepare to allow some imports helped provide underlying support.
Boxed-beef cut-out values were up 36 cents at mid-session to $138.74 as compared
with $139.34 last week at this time.
Technical Outlook
CATTLE (DEC) 11/29/2004: Rising stochastics at
overbought levels warrant some caution for bulls. The market’s short-term trend
is positive on the close above the 9-day moving average. The market has a
slightly positive tilt with the close over the swing pivot. The next upside
objective is 90.870. The market is approaching overbought levels with an RSI
over 70. The next area of resistance is around 90.570 and 90.870, while 1st
support hits today at 89.850 and below there at 89.400.
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LEAN HOGS RECAP
11/26/2004
December Lean Hogs closed up 0.25 at 76.80. This
was 0.55 up from the low and 0.20 off the high.
February Pork Bellies finished up 0.60 at 101.75,
0.90 off the high and 0.90 up from the low.
February hogs pushed into new contract highs on
the opening on Friday before moving lower on the day into the middle of the
holiday-shortened session. Strength in the cattle and news of higher cash
markets helped support. Peoria cash was up $2.00 as packers scramble for enough
hogs for a large Saturday slaughter and prepare inventory for a full week of
slaughter next week. The CME 2-Day Lean Index for the period ending November
23rd was reported at 78.20, down $.49 from the previous session. The hefty net
short position of the small speculator and record high open interest suggests
increased volatility ahead.
Technical Outlook
HOGS (DEC) 11/29/2004: A new contract high was
made on the rally. Rising stochastics at overbought levels warrant some caution
for bulls. The market’s short-term trend is positive on the close above the
9-day moving average. The close over the pivot swing is a somewhat positive
setup. The near-term upside target is at 77.500. The market is approaching
overbought levels with an RSI over 70. The next area of resistance is around
77.250 and 77.500, while 1st support hits today at 76.520 and below there at
76.020.
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COCOA MARKET RECAP
11/26/2004
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Market Closed due to Holiday!
Technical Outlook
COCOA (DEC) 11/29/2004: Momentum studies trending
lower at mid-range could accelerate a price break if support levels are broken.
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. The next downside target is now at 1573.
The next area of resistance is around 1625 and 1632, while 1st support hits
today at 1595 and below there at 1573.
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COFFEE MARKET RECAP
11/26/2004
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Market Closed due to Holiday!
Technical Outlook
COFFEE (DEC) 11/29/2004: Negative momentum
studies in the neutral zone will tend to reinforce lower price action. 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 lower than the pivot swing
number. The next downside objective is now at 86.25. The next area of resistance
is around 90.20 and 91.40, while 1st support hits today at 87.65 and below there
at 86.25.
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SUGAR MARKET RECAP
11/26/2004
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Market Closed due to Holiday!
Technical Outlook
SUGAR (MAR) 11/29/2004: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. A positive signal was given by the outside
day up. The market has a bullish tilt coming into today’s trade with the close
above the 2nd swing resistance. The next upside target is 9.10. The next area of
resistance is around 9.05 and 9.10, while 1st support hits today at 8.89 and
below there at 8.77.
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COTTON MARKET RECAP
11/26/2004
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Market Closed due to Holiday!
Technical Outlook
COTTON (DEC) 11/29/2004: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. A negative signal was given by the outside
day down. The market’s close below the 1st swing support number suggests a
moderately negative setup for today. The near-term upside objective is at 49.33.
The next area of resistance is around 48.77 and 49.33, while 1st support hits
today at 48.03 and below there at 47.84.