Reversal In Cattle?

Technical Outlook

#BONDS (SEP) 07/15/04: With the close higher than
the pivot swing number, the market is in a slightly bullish posture. Near-term
resistance for bonds is at 108.09 and then again at 108.25, while swing support
hits at 107.15 and below there at 107.05. The market’s close above the 9-day
moving average suggests the short-term trend remains positive. 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 107.05.

T-NOTES(SEP) The daily closing price reversal
down puts the market on the defensive. 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 109.30. The market’s close below
the pivot swing number is a mildly negative setup. Near-term resistance for the
T-Notes is at 110.22 and then again at 111.00, while swing support hits at
110.05 and below there at 109.30. The market’s short-term trend is positive on a
close above the 9-day moving average.

 

STOCK INDICES RECAP

7/14/2004

The stock market managed an impressive
performance early in the session. Coming into the opening the market was under
pressure due to poor Intel earnings. Compounding the concern over the economy
was weaker than expected retail sales. However, the equity market managed to
hold up fairly well in the face of discouraging news. Some traders attribute the
stock market performance Wednesday to an oversold technical condition.

Technical Outlook

#S&P500 (SEP) 07/15/04: The market’s close below
the 1st swing support number suggests a moderately negative setup for today. The
outside day down is a negative signal. The daily closing price reversal down
puts the market on the defensive. Underlying support comes in at 1105.05 and
1099.88, with overhead resistance at 1117.55 and 1124.88. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. Daily stochastics are trending lower, but have declined into oversold
territory. The next downside objective is now at 1099.88. Daily studies pointing
down suggests selling minor rallies.

S&P E-Mini (SEP): The market could take on a
defensive posture with the daily closing price reversal down. Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
next downside objective is 1099.38. The close below the 1st swing support could
weigh on the market. Near-term resistance for the S&P Mini is at 1118.00 and
then again at 1125.38, while swing support hits at 1105.00 and below there at
1099.38. A negative signal for trend short-term was given on a close under the
9-bar moving average.

NASDAQ (SEP) 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 market
should run into resistance at 1429.75 and above there at 1444.38 with support at
1407.25 and 1399.38. 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 1399.4.

MINI DOW (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. The
market should run into resistance at 10248 and above there at 10319 with support
at 10132 and 10087. Momentum studies are declining, but have fallen to oversold
levels. The next downside target is 10087. It is a slightly negative indicator
that the close was lower than the pivot swing number.

 

CURRENCY MARKET RECAP

7/14/2004

Retail sales from the US were down significantly
below expectations and that undermines the dollar and facilitates the downtrend.
Leadership in the currency markets was assumed by the Euro and the Swiss which
could mean additional downside in the dollar ahead. Some dollar sellers were
apparently holding back due to the proximity of US inflation reports on Thursday
and Friday.

Technical Outlook

#CURRENCIES 07/15/04: YEN (SEP): 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 92.18 and above
there at 92.46, with the yen finding support around 91.73 and below there at
91.56. Negative momentum studies in the neutral zone will tend to reinforce
lower price action. The next downside target is 91.56.

EURO (SEP): Momentum studies are trending higher,
but have entered overbought levels. The near-term upside objective is at 1.2434.
The market is in a bearish position with the close below the 2nd swing support
number. Swing support for the Euro comes in at 1.2334, with overhead resistance
at 1.2434. 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

7/14/2004

Gold and silver prices started out very strong
but gave back gains into mid session. Certainly seeing the Dollar down again
provided a lift to prices but at the same time slack retail sales could have
undermined gold and silver. Seeing a couple bombings in Iraq might also hint at
slightly higher flight to quality interest in gold but with inflation numbers
due out Thursday many longs are taking a wait and see attitude.

Technical Outlook

#P-METALS 07/15/04: SILVER (SEP): 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. Initial support for
silver is at 652.7 and below there at 640.6 with resistance likely at 659.3 and
669.7. 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
659.3. The 9-day RSI over 70 indicates the market is approaching overbought
levels.

GOLD (AUG): Support for gold today comes in near
401.45, while resistance is pegged at 409.05. Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
409.05. Consider buying pull-backs since daily studies are bullish. With the
close over the 1st swing resistance number, the market is in a moderately
positive position. The market’s short-term trend is positive on a close above
the 9-day moving average.

 

COPPER MARKET RECAP

7/14/2004

September copper closed barely changed as a
weaker June retail sales number was offset by a sharply weaker Dollar. A strike
at a Mexican mine, labor talks at mines in Chile and the US combined with
continuing declines in LME copper warehouse stocks provide underlying support to
the Sep copper market’s uptrend. The market has been consolidating recent gains
and has so far not been able to penetrate resistance at 130, basis the Sept
contract. However, the Jun PPI and Industrial Production numbers out Thursday
may provide a fresh catalyst for new buying. However, technical indicators have
reached overbought levels.

 

ENERGY MARKET RECAP

7/14/2004

A decline in API (-5 mbd) & EIA (-2.1 mbd) crude
stocks when most traders were looking for a rise due to rising crude oil imports
triggered a sharp rally in Sept crude oil with prices bouncing back over $41 per
barrel. Energy demand looks to be running stronger than traders had anticipated
and despite efforts by OPEC to raise production, the market remains very much
concerned over supply given terrorist attacks on oil facilities and political
unrest in Nigeria. Gasoline stocks measured by both API and EIA showed a decline
which added to the market’s positive sentiment. Despite gains in distillate
stocks, Sept heating oil followed the rest of the complex higher.

Technical Outlook

#ENERGIES 07/15/04: CRUDE OIL (SEP): The market’s
close above the 2nd swing resistance number is a bullish indication. Support for
crude is keyed on 40.25 and below there at 38.93, with resistance pegged at
42.05 and 42.53. 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 42.53.

UNLEADED GAS (SEP): 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
121.98. 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. Resistance today is at 133.58, while support should be found around
121.98. The outside day up and close above the previous day’s high is a positive
signal. A new contract high was made on the rally. The daily closing price
reversal up is positive. The market’s close above the 9-day moving average
suggests the short-term trend remains positive.

HEATING OIL (SEP): The market’s close above the
2nd swing resistance number is a bullish indication. Heating oil should
encounter support around 104.64, with resistance is at 113.64. 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 113.64. The rally brought the market to a new contract
high.

 

CORN MARKET RECAP

7/14/2004

The market held support on early weakness and a
surge in November soybeans based on “less than perfect” weather forecast into
late July helped to support significant short-covering and some new buying.
Commercial buyers are trying to wait and see how low prices may go before
extending coverage but the turn higher in new crop soybeans, the oversold
technical condition of the market and the technical reversal on Monday has
helped to improve the technical outlook for the market. Mixed basis levels in
the US and hefty deliveries of 544 lots overnight were seen as limiting factors.
In addition, the weather looks favorable for record yields as the crop is still
in pollination period with plenty of moisture and a lack of temperature
extremes. For the weekly export sales report, released before the opening,
traders are looking for corn sales near 400,000 to 500,000 tons as compared with
553,500 tons last week. December corn support moves up to 253 1/2 and 251 with
resistance at 263 and 267 1/2.

Technical Outlook

#CORN (DEC) 07/15/04: 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 258 3/4.
The market’s close above the 2nd swing resistance number is a bullish
indication. Market resistance comes in at 258 3/4 today, with support at 248
3/4. 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. The upside closing price reversal on the daily chart is
somewhat bullish.

 

SOY COMPLEX RECAP

7/14/2004

The market turned higher shortly after the
opening led by new crop futures as traders are a bit concerned with a potential
shift in the weather pattern. So far this season, growing conditions have been
ideal with active rain systems and a lack of extreme heat. The forecast for the
next 10 days includes a lack of heat but rain amounts look to be below normal.
The longer-term maps are also dry and show the possibility of some heat. With
the recent break “pricing in” the perfect weather scenario for this year’s crop,
a shift to a drier pattern after July 20th could leave soybean crops in need of
rains ahead of the key reproductive period in early August. The NOPA crush
report, released before the opening, showed June crush at 102.4 million bushels
as compared with trade expectations at 99.5-102 million bushels. The report was
supportive to old crop futures but hefty deliveries kept July soybeans under
pressure. The NOPA crush report showed end of June oil stocks at 1.145 billion
pounds as compared with 1.575 billion last year. Deliveries this morning totaled
217 lots for soybeans, 100 for meal and 48 for oil. For the weekly export sales
report, released before the opening, traders are looking for soybean sales near
0 to 50,000 tons, 25,000-50,000 tons for meal and 0-5,000 tons for oil. July
Soybeans closed sharply lower on the last trading session at 862 1/2 with a
range of 840-890. November soybean support comes in at 662 and 649 with 671 1/2
and 681 1/2 as resistance.

Technical Outlook

#SOYBEANS (NOV) 07/15/04: 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 area of resistance
is around 683 and 691, while 1st support hits today at 653 and below there at
631. The market’s close above the 9-day moving average suggests the short-term
trend remains positive. The daily stochastics have crossed over up which is a
bullish indication. The next upside target is 691.

MEAL (DEC): The daily stochastics gave a bullish
indicator with a crossover up. The near-term upside objective is at 216.7. First
resistance comes in at 214.5, with support at 206.0. The market’s short-term
trend is positive on a close above the 9-day moving average. The market’s close
above the 2nd swing resistance number is a bullish indication.

BEAN OIL (DEC): The market’s close above the
9-day moving average suggests the short-term trend remains positive. The daily
stochastics have crossed over up which is a bullish indication. The next upside
target is 24.37. 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. Daily swing resistance is found at 24.10 and above there at 24.37.
Support should be encountered at 23.18 and 22.53.

 

WHEAT MARKET RECAP

7/14/2004

After a test of the July lows early in the
session, wheat found good support from higher corn and soybean values and from
short-covering from the technical failure to follow-through to the downside.
Cash basis levels are firm for the soft red areas as the harvest has moved into
Ohio. Strong basis in the hard red areas of the southern plains helped to
support the bounce as well. There were only 14 deliveries against the July
contract this morning. Traders remain fearful that rallies in futures could make
US wheat less competitive on the world market for new business. South Korea is
tendering for 20,000 tons of US wheat. For the weekly export sales report,
released before the opening, traders are looking for wheat sales near 400,000 to
500,000 tons as compared with 551,500 tons last week. Support for September
wheat comes in at 342 and 338 with 349 and 351 1/2 as next resistance.

Technical Outlook

#WHEAT (DEC) 07/15/04: The daily closing price
reversal up is positive. Short-term indicators suggest buying dips today. A
positive setup occurred with the close over the 1st swing resistance. Look for
near-term support at 353 and below there at 347, with resistance levels at 362
1/2 and 366. 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 366.

 

LIVE CATTLE RECAP

7/14/2004

August cattle pushed down to the lowest level
since May 18th before a turn higher into the middle of the day and moderate
gains on the session into the close. Comments from the USDA Secretary of
Agriculture that efforts to resume beef exports to Japan were going well helped
to turn the trend up. A slowdown in the fund selling was also seen as a positive
devotement as the liquidation of long positions from funds has been one of the
primary bearish influences on futures in recent days. The discount to the cash
market may have provided some support. Cash cattle is expected to trade $2.00
lower this week and there was talk that Nebraska cash markets traded $1.75
lower. Boxed-beef cut-out values at mid-session were down 26 cents to $141.01 as
compared with $141.58 last week at this time.

Technical Outlook

#CATTLE (AUG) 07/15/04: Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
82.75. A positive setup occurred with the close over the 1st swing resistance.
Support should be encountered at 83.75 and below there at 82.75. Market
resistance is at 85.12 and then again at 85.50. 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’s close below the 9-day moving average is an
indication the short-term trend remains negative.

 

LEAN HOGS RECAP

7/14/2004

The hog market showed some strength early in the
session but gave up much of the gains as bellies were not as strong as expected
and weight data was disappointing to the bulls. Cash markets were mostly $.50 to
$1.00 lower with Peoria steady. Traders expected a lower opening but the market
pushed higher from steady buying from commercial buyers citing the discount of
futures to cash and better than expected pork product trade of the past week.
Fears that the hot weather might have backed-up some market-ready hogs in the
country was partially confirmed with the weekly weight data from Iowa/Minnesota.
Weekly average weights for the week ending July 10th came in at 261.8 pounds as
compared with 260.4 pounds the previous week and 258.3 pounds last year at this
time. Weights have a strong seasonally tendency to fall at this time of the year
and the sharp jump in weights would suggests a hefty supply of market-ready hogs
could hit the market soon. The 2-day lean index for the period ending July 12th
was up .07 to 79.16 as compared with 79.41 one week previous.

Technical Outlook

#HOGS (AUG) 07/15/04: The market’s close below
the pivot swing number is a mildly negative setup. Resistance levels comes in at
76.37 and 77.27 today, while support is around 74.92 and then 74.37. The upside
closing price reversal on the daily chart is somewhat bullish. 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
74.37.

 

COCOA MARKET RECAP

7/14/2004

Cocoa prices continued to show strength with
short covering by the funds and less sign of physical sales from Ghana. A
persistently lower US Dollar is also making US cocoa prices more attractive
versus London. September cocoa manages an upside breakout with a rise above
1,475. The path of least resistance is pointing up.

Technical Outlook

COCOA (SEP) 07/15/04 The market has a bullish
tilt coming into today’s trade with the close above the 2nd swing resistance.
Cocoa should run into resistance at 1535 and above there at 1563 with support at
1452 and 1397. The 9-day RSI over 70 indicates the market is approaching
overbought levels. Studies are showing positive momentum, but are now in
overbought territory so some caution is warranted. The next upside target is
1563.25.

 

COFFEE MARKET RECAP

7/14/2004

September coffee closed moderately higher with a
little more active trade than traders had expected as strength in the other soft
markets and a slightly more threatening weather forecast helped to provide
buying support and short-covering from the trade. Brazil coffee areas look
colder into next week with two more cold fronts due by the end of the month. The
first front does not appear to be cold enough to cause damage and a second front
due towards the end of the month is still uncertain if it will move cold air
into the producing regions. Traders also believe that the late harvest of lower
than expected quality beans may have prompted some buying from trade houses.

Technical Outlook

COFFEE (SEP) 7/15/04 The market setup is
supportive for early gains with the close over the 1st swing resistance. The
daily stochastics have crossed over up which is a bullish indication. The
near-term upside objective is at 72.80. The Coffee contract should run into
resistance at 72.30 and above there at 72.80 with support at 70.9 and 70.00. The
market’s short-term trend is positive on a close above the 9-day moving average.
Consider buying pull-backs since daily studies are bullish.

 

SUGAR MARKET RECAP

7/14/2004

October sugar closed 10 higher on the session
with a 41 point range as trade house buying emerged in London to support a fast
surge higher in futures which activated more fund and speculative buying. The
market seemed to lack a fundamental “trigger” for the surge in new buying but
the market failed to find new selling interest after gapping down to the lowest
level since July 2nd before seeing a test of the contract highs. With the 40-day
moving average back at 752, the market is overbought but the surge in open
interest and surge in fund buying continues to support. A recovery in the
precious metals markets along with the surge in London provided support. China
auctioned 150,000 tons of state sugar reserves in the first of four monthly
auctions to move 536,000 tons of sugar onto the domestic market in an attempt to
hold down sugar prices within China. The price of the sale was slightly lower
than expected.

Technical Outlook

#SUGAR (OCT) 07/15/04: The outside day up is a
positive signal. The upside closing price reversal on the daily chart is
somewhat bullish. With the close over the 1st swing resistance number, the
market is in a moderately positive position. Swing resistance comes in at 8.59,
with support found at 7.77. 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 7.77.

 

COTTON MARKET RECAP

7/14/2004

The December contract rallied to new highs for
the week early in the session before finding selling pressures late to close
lower. The technical bounce failed to attract new buying support and the market
drifted back lower on the day. For the weekly export sales report, released
before the opening, traders are looking for cotton sales near 250,000 to 300,000
bales. CSCE exchange stocks were down to 132,764 bales as compare with 136,254
bales the previous session.

Technical Outlook

#COTTON (OCT) 07/15/04: The market’s close below
the 9-day moving average is an indication the short-term trend remains negative.
With the close higher than the pivot swing number, the market is in a slightly
bullish posture. Next resistance area comes in at 47.48 and then again at 48.39,
while support is targeted at 46.13 and 45.69. 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 48.39. The 9-day
RSI under 20 suggests the market is extremely oversold.