Rumors In The Currency Markets

Technical Outlook

#BONDS (JUN) 04/13/04: The swing indicator gave a
moderately negative reading with the close below the 1st support number.
Near-term resistance for bonds is at 110.01 and then again at 110.12, while
swing support hits at 109.13 and below there at 109.04. 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 109.04. The 9-day RSI under 30 indicates the market is
approaching oversold levels.

T-NOTES(JUN) Daily stochastics are trending
lower, but have declined into oversold territory. The next downside objective is
now at 112.02. The market’s close below the pivot swing number is a mildly
negative setup. Near-term resistance for the T-Notes is at 112.18 and then again
at 112.24, while swing support hits at 112.07 and below there at 112.02. 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

4/12/2004

The US stock market started off higher and
managed to add some additional gains into mid session. However, considering the
favorable numbers released early in the session Monday and the very favorable
dialogue from the Fed we would have expected the stock market to show more
follow through gains. Ongoing conflict in Iraq, a power outage at the L.A.
airport and news that Saudi Arabia was using the army to chase down some
militants inside Riyadh might have given some investors pause during the
session! In other words, geopolitical headwinds seemed to countervail the
favorable macro economic information.

Technical Outlook

#S&P500 (JUN) 04/13/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Underlying support
comes in at 1141.15 and 1138.58, with overhead resistance at 1146.45 and
1149.18. 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 1149.18.

S&P E-Mini (JUN): Rising stochastics at
overbought levels warrant some caution for bulls. The next upside objective is
1153.25. The market has a slightly positive tilt with the close over the swing
pivot. Near-term resistance for the S&P Mini is at 1149.50 and then again at
1153.25, while swing support hits at 1139.00 and below there at 1132.25. A
positive signal for trend short-term was given on a close over the 9-bar moving
average.

NASDAQ (JUN) 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 1502.00 and above there at 1506.00 with
support at 1492.00 and 1486.00. Studies are showing positive momentum, but are
now in overbought territory so some caution is warranted. The next upside target
is 1506.0.

MINI DOW (JUN) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. The market should
run into resistance at 10552 and above there at 10584 with support at 10445 and
10370. Studies are showing positive momentum, but are now in overbought
territory so some caution is warranted. The next upside target is 10584. With
the close higher than the pivot swing number, the market is in a slightly
bullish posture.

 

CURRENCY MARKET RECAP

4/12/2004

The Dollar Index had to disappoint the bull camp
Monday as economic readings from the US and US equity market action should have
supported the Dollar to higher price levels. There were rumors during the
session that the Bank of Canada was poised to cut interest rates and that comes
on top of the existing expectation that the ECB might cut interest rates. In the
end the Pound and Yen were the most favored currencies with the US a distant
third on the list. However, if US corporate earnings reports are sold and the US
retail sales report on Tuesday is strong that should at least provide some
support to the Dollar.

Technical Outlook

#CURRENCIES 04/13/04: 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 95.43 and above there at 95.69,
with the yen finding support around 94.67 and below there at 94.17. Negative
momentum studies in the neutral zone will tend to reinforce lower price action.
The next downside target is 94.17.

EURO (JUN): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
1.2010. The market is in a bearish position with the close below the 2nd swing
support number. Swing support for the Euro comes in at 1.2010, with overhead
resistance at 1.2094. 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

4/12/2004

The gold market sagged under the weight of higher
equity prices, a lack of direction in the Dollar and alternating bouts of
economic optimism and rising geopolitical anxiety. Apparently funds and the
trade were persistent sellers of gold and silver and without London in action
Monday it seemed like the market lacked conviction. However, it was clear that
silver and copper were under the most aggressive selling pressure, possibly
because gold got support off the news that the Saudi Government was chasing down
some militants inside the capital city. We also think that Fed comments that
downplayed the inflation threat also served to undermine the precious metals.

Technical Outlook

#P-METALS 04/13/04: SILVER (MAY): It is a
slightly negative indicator that the close was lower than the pivot swing
number. Initial support for silver is at 786.0 and below there at 767.0 with
resistance likely at 804.4 and 820.0. The market’s close below the 9-day moving
average is an indication the short-term trend remains negative. 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 767.0.

GOLD (JUN): Support for gold today comes in near
415.63, while resistance is pegged at 425.83. 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 415.63. It is a mildly bullish indicator that
the market closed over the pivot swing number. The market’s short-term trend is
negative as the close remains below the 9-day moving average. The upside closing
price reversal on the daily chart is somewhat bullish.

 

COPPER MARKET RECAP

4/12/2004

The copper market came under intense pressure
Monday but managed to shake off some of the massive early losses. Even though
copper wasn’t massive long in the fund category it was thought that the funds
were heavy sellers of copper in the action Monday. One might have expected
copper to be supported by the favorable macro economic developments Monday but
instead the sellers prevailed and profit taking dominated. At times the May
copper violated a number of critical chart support levels but in the end the
market managed to regain some key support levels.

 

ENERGY MARKET RECAP

4/12/2004

While the energy complex might have started off
higher on expectations that demand would not decline much in the second quarter.
However, we also think that prices were driven higher by news that the Saudi
Government was chasing down some militants and were in effect shutting off a
section of the city. Seeing an uprising in Saudi Arabia, the current fundamental
setup would probably result in massive price gains. In the end, the IEA demand
and supply projections released over the weekend provided the impetus behind the
rally and many traders seem to be rushing to factor in another US inventory
decline for this Wednesday.

Technical Outlook

#ENERGIES 04/13/04: CRUDE OIL (JUN): The rally
brought the market to a new contract high. The market’s close above the 2nd
swing resistance number is a bullish indication. Support for crude is keyed on
36.92 and below there at 36.46, with resistance pegged at 37.57 and 37.76. 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 37.76.

UNLEADED GAS (JUN): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 119.41. 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 119.41, while support should be
found around 114.21. A new contract high was made on the rally. The gap upmove
on the day session chart is a bullish indicator for trend. The market’s close
above the 9-day moving average suggests the short-term trend remains positive.

HEATING OIL (JUN): With the close over the 1st
swing resistance number, the market is in a moderately positive position.
Heating oil should encounter support around 91.53, with resistance is at 95.13.
Short-term indicators suggest buying dips today. 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 95.13. The rally brought the market to a new contract high.

 

CORN MARKET RECAP

4/12/2004

Even the bounce in soybeans could not support the
corn market much and May corn is now down 13 cents off of last weeks double top
and contract high. By Mid-session, funds were noted sellers of near 4500
contracts. The outlook for good planting weather ahead and the overbought
condition of the market basis the COT report helped to trigger the aggressive
early selling from fund traders. Export demand news was strong on Friday and
again today. Weekly export inspections came in at 45.74 million bushels as
compared with trade expectations at 30-45 million. Cumulative inspections have
reached 1.151 billion bushels as compared with 910.56 million last year at this
time. For tonight’s weekly crop progress report, traders are looking for
planting progress to be ahead of the 5-year average pace which is near 4%. Gulf
basis was steady to higher this morning. In the Commitment-of-Traders report
with options, large traders were holding a net long position of 168,819
contracts as of April 6th.

Technical Outlook

#CORN (MAY) 04/13/04: 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 318. The market is in a
bearish position with the close below the 2nd swing support number. Market
resistance comes in at 328 today, with support at 318. The market’s short-term
trend is negative as the close remains below the 9-day moving average. The gap
down on the day session chart is bearish with more selling pressure possible
today.

 

SOY COMPLEX RECAP

4/12/2004

Active speculative selling helped to pressure the
market into the close after the mid-session bounced failed to find new buyers
when May soybeans moved higher on the session. The weak close with July soybeans
now down 97 cents off of the April 5th highs leaves the market vulnerable to
more long liquidation selling but also in a short-term oversold condition.
Follow-through technical selling after the weekly closing price reversal last
week and a bearish reaction to the USDA reports on Thursday helped to pressure
the market early as speculator and fund selling was noted. At today’s lows in
July soybeans (9.65) the market has already corrected 99 cents off of the April
highs. Weekly export inspections came in at 7.49 million bushels as compared
with trade expectations at 5-10 million. Cumulative inspections have reached
775.1 million bushels as compared with 885.4 million last year at this time. In
the Commitment-of-Traders report with options, large traders were holding a net
long position of 52,198 contracts as of April 6th. The 40-day moving average has
not been violated to the downside since December 24th and the average comes in
at 964 3/4 today for May soybeans which might provide some support. Talk that
the pipeline for meal is full due to the recent active crush pace and weakness
in Malaysia palm prices is helping to pressure the meal and oil markets.

Technical Outlook

#SOYBEANS (MAY) 04/13/04: It is a slightly
negative indicator that the close was lower than the pivot swing number. The
next area of resistance is around 979 and 996 1/2, while 1st support hits today
at 954 1/2 and below there at 947 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
947 1/2.

MEAL (MAY): 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 303.3. First resistance comes in at 313.5,
with support at 305.5. The market’s short-term trend is negative as the close
remains below the 9-day moving average. The market’s close below the 1st swing
support number suggests a moderately negative setup for today. Daily studies
pointing down suggests selling minor rallies.

BEAN OIL (MAY): 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 30.87. The swing indicator gave a moderately negative reading
with the close below the 1st support number. The gap lower price action on the
day session chart is a bearish indicator for trend. Daily swing resistance is
found at 31.42 and above there at 31.65. Support should be encountered at 31.03
and 30.87. The 9-day RSI under 30 indicates the market is approaching oversold
levels.

 

WHEAT MARKET RECAP

4/12/2004

The lowest close for the month leaves the market
in a position to see further long liquidation selling if the weekly reports show
that crop conditions are improving in tonight’s release. While the cold weather
on the weekend did not seem to cause much in the way of damage, the cold front
brought 1/4 to 3/4 inches of rain/snow to the dry areas of western Kansas and
eastern Colorado. This helped trigger the long liquidation sell-off in the wheat
market early in the session. In addition, weather in China early in the season
is favorable and the India state run research body indicates that the country
should receive normal and timely monsoon rains this season. Weekly export
inspections came in at 18.49 million bushels as compared with trade expectations
at 18-25 million. Cumulative inspections have reached 966.9 million bushels as
compared with 737.6 million last year at this time. In the Commitment-of-Traders
report with options, large traders were holding a net long position of 43,482
contracts as of April 6th.

Technical Outlook

#WHEAT (MAY) 04/13/04: Short-term indicators on
the defensive. Consider selling an intraday bounce. The swing indicator gave a
moderately negative reading with the close below the 1st support number. Look
for near-term support at 401 1/2 and below there at 398 1/4, with resistance
levels at 413 and 421 1/4. 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 398 1/4.

 

LIVE CATTLE RECAP

4/12/2004

The market surged sharply higher on the session
with June cattle moving to a new contract high as expectations for higher cash
markets this week and strong beef prices helped support. Boxed-beef cut-out
values for choice (600-750 lbs) rose $1.59 to $157.85 as compared with $143.03
last week at this time. In the US Plains, cash cattle traded $86 last week with
plenty of talk of an $88 cash market this week. Even with the surge in futures,
the June cattle will still be a 900 point discount to cash if cash trades at $88
this week. A lack of news from Canada on lifting the cattle ban and hopes of
better exports of beef to Mexico helped support.

Technical Outlook

#CATTLE (JUN) 04/13/04: Studies are showing
positive momentum, but are now in overbought territory so some caution is
warranted. The next upside target is 81.07. 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. Support should be encountered at
77.72 and below there at 76.17. Market resistance is at 80.17 and then again at
81.07. A new contract high was made on the rally. The gap upmove on the day
session chart is a bullish indicator for trend. The market’s close above the
9-day moving average suggests the short-term trend remains positive. The 9-day
RSI over 70 indicates the market is approaching overbought levels.

 

LEAN HOGS RECAP

4/12/2004

The market surged to new contract highs for June
and summer month hogs as traders are hopeful to see solid demand and lower
production into the spring. Cash hogs were sharply higher with Peoria up $2.00.
Strength in the pork product market on Friday and a bullish set-up basis the COT
reports added to the positive tone. Improved packer profit margins and strength
in cattle added to the positive tone. The 2-day lean Index for the period ending
April 7th was down 79 cents from the previous session to $64.32 as compared with
$66.84 on April 1st.

Technical Outlook

#HOGS (JUN) 04/13/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Resistance levels
comes in at 76.40 and 77.00 today, while support is around 75.27 and then 74.75.
The rally brought the market to a new contract high. 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 77.00.

 

COCOA MARKET RECAP

4/12/2004

Another big range down with a poor close in cocoa
would seem to leave the bears in charge. With the trade blaming spread activity
for the big downside pressure it is clear that few dominating themes are
operating in the cocoa market. Like a number of other markets the cocoa market
seemed to get hit with unrelated fund selling. As cocoa approaches the October
low we would think that funds will lose their interest in getting short but so
far, the funds show no aversion to getting short low in the last 8 months
trading range.

Technical Outlook

COCOA (JUL) 04/13/04 The close below the 1st
swing support could weigh on the market. Cocoa should run into resistance at
1406 and above there at 1428 with support at 1372 and 1360. Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
1360.00. Short-term indicators on the defensive. Consider selling an intraday
bounce.

 

COFFEE MARKET RECAP

4/12/2004

The coffee market closed slightly lower in quiet
trade but with traders holding a hefty net long position, futures look
vulnerable to long liquidation selling if London starts the week lower overnight
tonight. London was closed on Monday due to holiday. CSCE exchange stocks were
up 7286 bags to 4.751 million bags with 25,694 bags pending review. Folgers
raised prices to food service and office demand by 4-6% which is not likely to
have much impact on the market unless the higher price crimps demand. Good
weather in Brazil has traders expecting a higher crop size this summer.

Technical Outlook

COFFEE (JUL) 4/13/04 The market tilt is slightly
negative with the close under the pivot. Momentum studies are declining, but
have fallen to oversold levels. The next downside objective is now at 73.55. The
Coffee contract should run into resistance at 75.00 and above there at 75.65
with support at 73.95 and 73.55. The market’s short-term trend is negative as
the close remains below the 9-day moving average.

 

SUGAR MARKET RECAP

4/12/2004

May sugar closed 11 lower on the session with an
outside day down which is a bearish technical development. The
Commitment-of-Traders report with options showed that speculators were holding a
net long position of over 112,000 contracts as of April 6th and this is still
coming off of the record high of near 150,000 contracts in March. Cash markets
are quiet and London was closed for a Bank Holiday. Indonesia is re-tendering
for 35,000 tons of white sugar. Selling may have been triggered by news of a
higher than expected production forecast from China.

Technical Outlook

#SUGAR (JUL) 04/13/04: The outside day down is a
negative signal. The daily closing price reversal down puts the market on the
defensive. The market is in a bearish position with the close below the 2nd
swing support number. Swing resistance comes in at 7.26, with support found at
6.72. The upside crossover (9 above 18) of the moving averages suggests a
developing short-term uptrend. Momentum studies are trending higher from
mid-range which should support a move higher if resistance levels are
penetrated. The near-term upside objective is at 7.26.

 

COTTON MARKET RECAP

4/12/2004

The cotton market opened near unchanged and
closed near limit-down and to the lowest level since August of last year. Trade
expectations for a larger world crop and wet soils across the south were seen as
bearish factors. Demand news has been favorable with talk of more export
business over the weekend but the focus of attention seems to be on new crop
supply with demand factors moving to the sidelines. Funds are building a large
net short position and small speculators are likely about out of their net long
position by now. Good rains across the south over the weekend just added to the
bearish tone in the market.

Technical Outlook

#COTTON (JUL) 04/13/04: 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.
Next resistance area comes in at 62.25 and then again at 64.55, while support is
targeted at 59.14 and 58.33. Momentum studies are declining, but have fallen to
oversold levels. The next downside target is 58.33. The 9-day RSI under 30
indicates the market is approaching oversold levels.