Possible Change In The Dollar?

Technical Outlook

BONDS (MAR) 12/22/03: 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 111.06 and then again at 111.15, while swing support hits at 110.13 and below there at 109.29. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 111.15.

T-NOTES(MAR) Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 113.12. 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 113.06 and then again at 113.12, while swing support hits at 112.21 and below there at 112.10. The market’s short-term trend is positive on a close above the 9-day moving average.

STOCK INDICES RECAP

12/19/2003

The stock market deserved some profit taking action after the stellar gains posted early in the week. Given that the market had to digest rumors of new terrorism threats against the York City, the action in the stock market was in the end quite impressive. It is certainly possible that the stocks were suffering a hangover from the triple witching expiration and many traders were thought to be leveling trading books ahead of the holidays. We suspect that weekend retail sales activity will be stronger than the prior week’s activity and that could reinvigorate the market next week. It should be noted that volume on the session was very light early during the sell off and that would seem to reduce the importance of the slide.

Technical Outlook

S&P500 (MAR) 12/22/03: It is a mildly bullish indicator that the market closed over the pivot swing number. The daily closing price reversal down puts the market on the defensive. Underlying support comes in at 1081.85 and 1078.18, with overhead resistance at 1089.55 and 1093.58. 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 1093.58.

S&P E-Mini (MAR): The market made a new contract high on the rally. The market could take on a defensive posture with the daily closing price reversal down. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 1093.75. The market has a slightly positive tilt with the close over the swing pivot. Near-term resistance for the S&P Mini is at 1089.25 and then again at 1093.75, while swing support hits at 1081.25 and below there at 1077.75. A positive signal for trend short-term was given on a close over the 9-bar moving average.

NASDAQ (MAR) The market’s close above the 9-day moving average suggests the short-term trend remains positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The market should run into resistance at 1437.25 and above there at 1445.88 with support at 1418.75 and 1408.88. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 1445.9.

CURRENCY MARKET RECAP

12/19/2003

It would appear as if the Dollar index is beginning to show signs of consolidation and perhaps a near term bottom. In looking back at the events of the week, it would appear that the US economy is demonstrating that it will be stronger than was previously expected and that should make it difficult to continue attacking the Dollar. In fact, even after a renewed concern of terrorism on U.S. soil, the bear camp could not take the Dollar down hard. It should also be noted that the ultra strong Canadian Dollar has come apart with violation of critical chart support levels and that speaks of a possible change in the Dollar.

Technical Outlook

YEN (MAR): 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. Swing resistance is targeted at 93.24 and above there at 93.43, with the yen finding support around 92.86 and below there at 92.67. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 92.67.

EURO (MAR): 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 1.2272. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.2272, with overhead resistance at 1.2444. The market’s short-term trend is positive on a close above the 9-day moving average. With a reading over 70, the 9-day RSI is approaching overbought levels. The market’s key reversal down is a bearish signal. The rally brought the market to a new contract high. The gap down on the day session chart is bearish with more selling pressure possible today.

PRECIOUS METALS RECAP

12/19/2003

The gold market started the session out weak and basically remained weak into the close. It would appear that the U.S. Dollar is beginning to forge a consolidation low and that is very discouraging to the bull camp in gold. Many speculative traders feared the Commitment of Traders report to be released after the close today, as the net spec long is becoming a constant source of concern. Rumors Friday of an imminent suicide bomb threat to New York City, would seem to have been a deflationary threat but that type of threat could also result in renewed pressure on the Dollar, which would then provide support to gold.

Technical Outlook

SILVER (MAR): With the close higher than the pivot swing number, the market is in a slightly bullish posture. Initial support for silver is at 571.3 and below there at 567.7 with resistance likely at 573.2 and 576.3. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 573.2. The 9-day RSI over 70 indicates the market is approaching overbought levels.

GOLD (FEB): Support for gold today comes in near 406.70, while resistance is pegged at 413.10. 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 406.70. The market’s close below the pivot swing number is a mildly negative setup. The market’s short-term trend is positive on a close above the 9-day moving average.

COPPER MARKET RECAP

12/19/2003

The copper market charged to yet another new high but might have done so on slightly lower volume totals than has recently been employed. A number of news outlets have suggested that few traders are willing to sell into the copper market rally and that effectively feeds the bull camp. Unfortunately for the bull camp it would seem that more and more the buying is being undertaken by small spec traders and that makes the net spec long readings in the COT report vastly understated into the close today. With the market becoming less liquid into year end, it’s a good bet that copper prices will become even more volatile. With the talk Friday morning that aluminum supplies are tight, that in a way reconfirms the tightness in copper. With the highs this week, copper prices reached the highest level since August of 1997 on the monthly charts.

ENERGY MARKET RECAP

12/19/2003

February crude oil did manage a slightly higher-high Friday but then the fell back aggressively in a profit taking slide. Generally mild temperatures in the near-term forecast, combined with rumors of a potential suicide bomb threat to New York City, are certainly reasons for many longs to liquidate especially after the massive run on the week. While areas of Florida will see cold temperatures, in general the U.S. will see mild conditions into the middle of next week. The market even noted declining West Coast power prices and that signifies a general overbought standing in many energy products. However, the fact that New Year’s may usher in an Arctic cold front, should limit near-term profit-taking in natural gas prices.

Technical Outlook

CRUDE OIL (FEB): The market’s close below the 1st swing support number suggests a moderately negative setup for today. Support for crude is keyed on 32.56 and below there at 32.29, with resistance pegged at 33.49 and 34.15. The market’s short-term trend is positive on a close above the 9-day moving average. 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 32.29.

UNLEADED GAS (FEB): Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 94.64. The swing indicator gave a moderately negative reading with the close below the 1st support number. Resistance today is at 94.64, while support should be found around 90.24. The market’s close above the 9-day moving average suggests the short-term trend remains positive.

HEATING OIL (FEB):The market’s close below the 1st swing support number suggests a moderately negative setup for today. Heating oil should encounter support around 92.15, with resistance is at 98.35. 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 98.35.

CORN MARKET RECAP

12/19/2003

The corn market made it very hard probe down Friday, but did manage to reject the weakness and close at mid range. We have to think that overt strength in the soybean market lent some support to corn in the session. It is possible that the predictions of a cold and wet pattern in Argentina next week, provided some of the early selling impetus in corn. The corn market was supported by additional cash sales news Friday morning but we suspect weather in Argentina will take on a growing and importance role in the coming sessions. It should be noted that March corn fell down right on top of the 40 day moving average Friday and then managed to recoil aggressively away from that level.

Technical Outlook

CORN (MAR) 12/22/03: 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 243 3/4. The market’s close below the pivot swing number is a mildly negative setup. Market resistance comes in at 254 1/4 today, with support at 243 3/4. The market’s short-term trend is negative as the close remains below the 9-day moving average. The daily closing price reversal down puts the market on the defensive.

SOY COMPLEX RECAP

12/19/2003

While the soybean market finished the session higher, many traders might have been disappointed by the magnitude of the gains, due to the excess hype attached to the Chinese purchases. Some traders might suggest that the big range up and failure to hold is a negative, especially if one considers the magnitude of the spec long registered in the Commitment of Traders report. Weakness in the Cash soybean basis Friday also provided an undermine to bullish sentiment. The Brazilian Vegetable Oil industry Association predicted that the Brazilian crop would reach 58.1 million metric tons, which is an upward revision but still below the 60 million metric tons that the USDA forecast for that crop. In general, private forecasts are slowly rising to the level posted by the USDA. If private forecasts begin to climb above the 60 million metric ton level that the USDA forecast, that could serve to limit bullish psychology.

Technical Outlook

SOYBEANS (MAR) 12/22/03: With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next area of resistance is around 776 and 783 , while 1st support hits today at 764 and below there at 759 . The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The cross over and close above the 40-day moving average indicates the longer-term trend has turned up. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 759 .

MEAL (MAR): 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 227.0. First resistance comes in at 232.1, with support at 228.7. The market’s short-term trend is negative as the close remains below the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number.

BEAN OIL (MAR): The market’s close below the 9-day moving average is an indication the short-term trend remains negative. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 27.56. A positive setup occurred with the close over the 1st swing resistance. Daily swing resistance is found at 28.05 and above there at 28.18. Support should be encountered at 27.74 and 27.56.

WHEAT MARKET RECAP

12/19/2003

The European wheat markets ended the session without significant direction, while the U.S. wheat market did manage a new high for the move and a higher close than the previous session. The US market actually showed weakness early in the session, but managed to post a strong close. Apparently the market is still hopeful of emerging business from China and Europe and that is causing traders to buy breaks. On the other hand, because U.S. wheat is not under an imminent weather threat, we suspect that aggressive upside action will be difficult to come by. Predictions that the European 2004-2005 wheat crop would rise due to increased acreage, is also a limiting factor but a longer term market factor.

Technical Outlook

WHEAT (MAR) 12/22/03: With the close higher than the pivot swing number, the market is in a slightly bullish posture. Look for near-term support at 388 1/2 and below there at 382 1/4, with resistance levels at 399 1/2 and 404 1/4. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 382 1/4.

LIVE CATTLE RECAP

12/19/2003

February cattle closed 45 higher on the session but still 12 lower on the week. Strength in the hog market and ideas that the market was oversold left the market with a void of new selling interest on the sharply lower opening. Cattle slaughter for the week came in at 634,000 head which was up 2.3% from last week and down only 2.5% from last year. Beef production was down 4.9% from last year.
The Cattle-on-Feed report, released after the close, showed On-Feed supply for December 1st at 104% as compared with the average trade estimate of 105.1% (range 103-106). Placements for November came in at 97% vs. expectations at 99.7% (range 96-104) and marketings for November were 87% as compared with estimates averaging 84.7% (range 80.9-95). The report is bullish with the market called 25-30 higher on Monday as producers marketed more cattle than expected and placed less cattle than trade expectations into feedlots.

Technical Outlook

CATTLE (FEB) 12/22/03: Momentum studies are declining, but have fallen to oversold levels. The next downside target is 86.45. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Support should be encountered at 87.60 and below there at 86.45. Market resistance is at 89.40 and then again at 90.05. The daily closing price reversal up is positive. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

LEAN HOGS RECAP

12/19/2003

After hitting a contract low, February hogs rallied sharply to close 185 points higher on the session. The reversal is technical sign of a low and the fact that the market closed 1 tick higher on the week with a weekly reversal helps confirm the low. Cash hogs were steady to $1.00 lower. Slaughter for the week came in at 2.225 million head which is up 3.6% from last week and up 2.2% from last year. This was the highest weekly slaughter since December of 1998 and the excess pork production could weigh on pork values into next week. Pork production was also up 3.6% from last year. Once the hog market turned higher and moved over Thursday’s highs, buying turned very active and there was a void of new selling interest.

Technical Outlook

HOGS (FEB) 12/22/03: The market’s close above the 2nd swing resistance number is a bullish indication. Resistance levels comes in at 54.55 and 55.22 today, while support is around 52.05 and then 50.22. The market’s key reversal up is a bullish signal. The outside day up is a positive signal. The market was pushed to a new contract low. The upside closing price reversal on the daily chart is somewhat bullish. 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 55.22.

COCOA MARKET RECAP

12/19/2003

The cocoa market finished slightly lower on the session but did manage to recoil from the day’s lows. It would seem that slightly lower prices from the December highs have discouraged some origins from selling. Cumulative export figures for the Ivory Coast would seem to running dramatically behind levels but with arrivals known to be slow that is to be expected. In general, the charts would seem to be negative, with another new low for the move posted in the action Friday but the market did recoil from those lows into the close. However, from the action Friday, it would appear that small spec traders are still in a mood to sell cocoa, especially after an Ivory Coast government study indicated that price support efforts have been far too expensive for their results.

Technical Outlook

COCOA (MAR)12/22/03 The market tilt is slightly negative with the close under the pivot. Cocoa should run into resistance at 1586 and above there at 1598 with support at 1558 and 1542. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 1542.00.

COFFEE MARKET RECAP

12/19/2003

The coffee market seemed to favor the upside in the action Friday as it managed to respect even number support of 62.50. The market continues to waffle around critical moving average levels on the charts as if it searching for direction. Recent crop forecasts for the total Arabica crop are 62.6 million bags, while Robusta production is pegged at 38.8 million bags and the total combined production number is down slightly from the prior year. However, the trade generally assumes that upcoming 2004-2205 production will be enough production to keep the market from rising to far off the recent lows, without some fresh fundamental development. Slightly lower Brazilian export flow is only cause for minor price support and not cause for an uptrend to start.

Technical Outlook

COFFEE (MAR)12/22/03 The outside day up and close above the previous day’s high is a positive signal. The daily closing price reversal up is positive. The market setup is supportive for early gains with the close over the 1st swing resistance. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside objective is now at 62.00.The Coffee contract should run into resistance at 65.20 and above there at 65.70 with support at 63.35 and 62.00. The market’s short-term trend is positive on a close above the 9-day moving average. The major trend could be turning up with the close back above the 40-day moving average.

SUGAR MARKET RECAP

12/19/2003

March sugar closed 34 lower on the session and down 67 points on the week to close at the lowest level since November 7th. Fund and small spec selling drove the market sharply lower and with speculators holding a hefty net long position and in a long liquidation mode, the market may need to absorb more of the same in the coming week. While the speculators were actively selling, there was a noticeable absence of trade house or commercial buying support under the market. Thailand officials rejected all bids for their tender to sell 60,000 tonnes of quota B sugar. This leaves 376,000 tons to be sold in future tenders. The Agriculture Minister from Japan has a forecast for January to March imports of 211,000 tonnes of sugar which is down from 240,200 tonnes last year.

Technical Outlook

SUGAR (MAR) 12/22/03: The gap lower price action on the day session chart is a bearish indicator for trend. The market is in a bearish position with the close below the 2nd swing support number. Swing resistance comes in at 6.41, with support found at 5.91. 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. 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 5.91. With a reading under 30, the 9-day RSI is approaching oversold levels.

COTTON MARKET RECAP

12/19/2003

March cotton closed 202 higher on the session and up 104 points on the week. The close was the first over the 40-day moving average since November 5th. While traders have been very sensitive over the actions of China buyers, news that China bought 2.5 million tons of soybeans was enough to attract some speculative buying and the buying seemed to feed on itself when stops were hit over 70.70. Traders expect China to resume active imports of US cotton soon and signs of better trade relations are seen as friendly.

Technical Outlook

COTTON (MAR) 12/22/03: The market’s close above the 9-day moving average suggests the short-term trend remains positive. 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. Next resistance area comes in at 72.74 and then again at 73.78, while support is targeted at 69.84 and 67.98. The daily stochastics have crossed over up which is a bullish indication. The next upside target is 73.78. The outside day up and close above the previous day’s high is a positive signal. The daily closing price reversal up is positive. ORANGE JUICE (JAN)12/22/03 The sell-off took the market to a new contract low. The daily closing price reversal up is positive. The market tilt is slightly negative with the close under the pivot. Orange Juice should run into resistance at 67.50 and above there at 68.75 with support at 65.00 and 63.75. The market’s short-term trend is negative as the close remains below the 9-day moving average. Momentum studies are declining, but have fallen to oversold levels. The next downside objective is now at 63.75.