The Market Has Some Remaining Bullish Capacity — Here’s Why
BOND MARKET RECAP
9/30/2004
December Bonds closed down 0-13 at 112-07. This was 0-20 up from the low and 0-25 off the high.
December 10 Yr Treasury Notes finished down 0-050 at 112-200, 0-140 off the high and 0-145 up from the low.
The Treasury market faded again and did so in the face of partially supportive economic information. The claims were up 18,000 on expectations of a decline of 5,000 to 8,000 and that could have supported prices. However, later in the session the Chicago purchasing managers report showed a moderate increase and that kept the initial negative tilt in control. Some traders also suggested that higher inflation readings from certain components of the CRB were facilitating some selling pressure in bonds, especially with the potential trouble brewing in the US Agency market. It also seemed like higher energy prices were beginning to be seen as a bearish development for Treasuries instead of a supportive element.
Technical Outlook
BONDS (DEC) 10/01/2004: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The market’s short-term trend is negative as the close remains below the 9-day moving average. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is 110-24. The next area of resistance is around 112-27 and 113-21, while 1st support hits today at 111-13 and below there at 110-24.
T-NOTES (DEC) 10/01/2004: 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. It is a slightly negative indicator that the close was under the swing pivot. The next downside objective is 111-225. The next area of resistance is around 113-010 and 113-160, while 1st support hits today at 112-045 and below there at 111-225.
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STOCK INDICES RECAP
9/30/2004
December S&P finished down 0.5 at 1114.7, 2.1 off the high and 5.1 up from the low.
December S&P E-Mini closed down 0.25 at 1115. This was 5.5 up from the low and 2 off the high.
December Dow closed down 58 at 10065. This was 35 up from the low and 45 off the high.
December Dow E-Mini finished down 56 at 10067, 71 off the high and 37 up from the low.
The stock market saw a number of negative thrown on the plate Thursday morning and therefore the early decline wasn’t surprising. Following a very disappointing set of initial claims readings the equity market was also confronted with another round of rising energy prices and that prompted many sellers into action. In addition to the concern for the US economy, seeing the Dollar fall sharply probably added to the negative sentiment as that means foreign money might be poised to pull out of the US equity market. The ability to reject the early selling and recover into the mid afternoon action at least shows that the market has some remaining bullish capacity.
Technical Outlook
S&P 500 (DEC) 10/01/2004: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The next downside objective is now at 1106.70. The next area of resistance is around 1118.20 and 1121.09, while 1st support hits today at 1111.00 and below there at 1106.70.
SP E-MINI (DEC) 10/01/2004: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The daily closing price reversal down puts the market on the defensive. The close over the pivot swing is a somewhat positive setup. The next downside objective is 1106.63. The next area of resistance is around 1118.75 and 1121.62, while 1st support hits today at 1111.25 and below there at 1106.63.
NASDAQ (DEC) 10/01/2004: A negative indicator was given with the downside crossover of the 9 & 18 bar moving average. Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. A positive signal for trend short-term was given on a close over the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside objective is now at 1400.63. The next area of resistance is around 1425.25 and 1431.62, while 1st support hits today at 1409.75 and below there at 1400.63.
MINI-DOW (DEC) 10/01/2004: The close below the 40-day moving average is an indication the longer-term trend has turned down. The daily stochastics have crossed over down which is a bearish indication. Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. 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. The swing indicator gave a moderately negative reading with the close below the 1st support number. The next downside target is now at 9967. The next area of resistance is around 10120 and 10183, while 1st support hits today at 10012 and below there at 9967.
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CURRENCY MARKET RECAP
9/30/2004
December US Dollar finished down 78 at 8751, 81 off the high and 2 up from the low.
December Euro finished up 1.09 at 124.32, 0.03 off the high and 0.45 up from the low.
December Euro Dollar closed unchanged at 97.695. This was 0.025 up from the low and 0.01 off the high.
December Canadian Dollar closed up 0.65 at 79.2. This was 0.63 up from the low and 0.15 off the high.
December British Pound finished up 1.29 at 180.23, 0.03 off the high and 0.79 up from the low.
December Swiss closed up 0.92 at 80.54. This was 0.45 up from the low and 0.02 off the high.
December Japanese Yen closed up 0.7 at 91.27. This was 0.53 up from the low and 0.16 off the high.
We are a little surprised that the Dollar remained below 88.00 after the Chicago purchasing managers came in slightly better than expectations and the US equity market managed to bounce off its lows of the day. However, it would seem like the US economy is seen under a greater risk of rising energy prices and with the US Fed talking about hiking rates it would seem like investors are worried that US growth might slow relative to Europe and the Pacific Rim. It isn’t surprising that the Canadian rallied so aggressively but it is surprising that the euro managed such a convincing upward pulse. After all France recently showed worsening of the unemployment rate.
Technical Outlook
YEN (DEC) 10/01/2004: A bullish signal was given with an upside crossover of the daily stochastics. Momentum studies are trending higher from mid-range, which should support 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. Follow through buying looks likely if the market can hold yesterday’s gap on the day session chart. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The next upside target is 91.86. The next area of resistance is around 91.61 and 91.86, while 1st support hits today at 90.93 and below there at 90.49.
EURO (DEC) 10/01/2004: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The gap upmove on the day session chart is a bullish indicator for trend. The market’s close above the 2nd swing resistance number is a bullish indication. The near-term upside target is at 124.69. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 124.56 and 124.69, while 1st support hits today at 124.08 and below there at 123.74.
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PRECIOUS METALS RECAP
9/30/2004
December Gold closed up 5.7 at 420.4. This was 3.6 up from the low and 0.4 off the high.
December Silver finished up 0.243 at 6.938, 0.042 off the high and 0.168 up from the low.
October Platinum closed up 14.5 at 861. This was 14 up from the low and 3 off the high.
The gold and silver markets continued to show impressive action but this time did so off the usual outside influences. In addition to a sharply lower US Dollar the gold and silver also saw strength early in the energy complex. As if that wasn’t enough fundamental support for gold the market is also detecting signs of inflation from various CRB components. On top of all the outside market supports for the metals it is also clear that fund buyers and spec buyers are willing to pay up even after upside breakouts on the charts.
Technical Outlook
SILVER (DEC) 10/01/2004: Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. The gap upmove on the day session chart is a bullish indicator for trend. 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 upside objective is 711.7. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 704.3 and 711.7, while 1st support hits today at 683.4 and below there at 669.7.
GOLD (DEC) 10/01/2004: 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 gap upmove on the day session chart is a bullish indicator for trend. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The next upside target is 423.6. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 422.4 and 423.6, while 1st support hits today at 418.4 and below there at 415.6.
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COPPER MARKET RECAP
9/30/2004
December Copper finished up 0.30 at 139.60, 1.20 off the high and 1.55 up from the low.
The copper market finally seemed to garner some concern for the economy against as US numbers were sloppy and energy prices were showing signs of returning to the recent highs. However, it is also possible that many longs are backing away from the copper market because of the coming Chinese holiday and because the copper market is simply excessively overbought from a short term perspective. After reaching the highest price since 1995 copper prices should be expected to exhibit profit taking, especially if the world is concerned about US growth rates.
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ENERGY MARKET RECAP
9/30/2004
December Crude Oil closed up 0.30 at 49.21. This was 0.26 up from the low and 0.34 off the high.
December Heating Oil closed up 0.85 at 138.71. This was 0.91 up from the low and 1.19 off the high.
December Unleaded Gas finished down 0.03 at 130.96, 1.74 off the high and 0.36 up from the low.
December Natural Gas finished up 0.07 at 7.64, 0.17 off the high and 0.23 up from the low.
December Propane closed down 0.00 at 0.84. This was equal to the low and equal to the high.
The energy complex surprised the market by managing another pulse up and did so despite the fact that Nigerian negotiations continued to move forward. Prices even managed to rally in the face of talk from Iran that they could raise production by 200,000 barrels per day sometime later this year. However, from the disjointed price action between the crude and the product markets it is clear that the bull camp isn’t in total control of the marketplace. The natural gas market continued to show firm action even though the BTU comparison price drew closer to parity and the weekly build came in at 69 bcf. In defense of the bull camp the annual natural gas surplus tally narrowed for the 4th week in a row.
Technical Outlook
CRUDE OIL (DEC) 10/01/2004: The market rallied to a new contract high. 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 next upside objective is 49.83. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 49.51 and 49.83, while 1st support hits today at 48.91 and below there at 48.63.
UNLEADED (DEC) 10/01/2004: A bearish signal was triggered on a crossover down in the daily stochastics. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The next downside objective is 129.21. The next area of resistance is around 132.01 and 133.40, while 1st support hits today at 129.91 and below there at 129.21.
HEATING OIL (DEC) 10/01/2004: The market rallied to a new contract high. Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. 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 near-term upside objective is at 140.88. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 139.75 and 140.88, while 1st support hits today at 137.66 and below there at 136.68.
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CORN MARKET RECAP
9/30/2004
December Corn finished down 1 3/4 at 205 1/2, 1 1/4 off the high and 1 1/2 up from the low. March Corn closed down 1 3/4 at 216 1/4. This was 1 1/4 up from the low and 1 1/4 off the high.
The outlook for active harvest into next week and a surge in world wheat production combined with the outlook for excess “feedwheat” from Canada for the coming year were factors to offset frost fears for the weekend to drive December corn to a new contract low. The lack of follow-through selling on the new low and close back into the recent trading range is somewhat positive. Selling slowed after mid-session as mid-day weather models were said to be a little colder than previous models for the weekend forecast for the northwestern cornbelt. The USDA pegged September 1st stocks at 957.7 million bushels as compared with the average trade estimate of 951 million bushels (range 903-1.03). Last years stocks were 1.087 billion bushels. Weekly export sales came in at 905,500 tons as compared with trade expectations at 800,000-1.05 million tons and 878,200 tons needed each week to reach the USDA projection. The International Grain Council raised their forecast for world coarse grain production for the 2004/2005 season by 1 million tons from last months estimate to 963 million tons, up 5.8% from last year. Support for December corn comes in at 204 1/2 and 202 1/4 with 206 and 206 3/4 as near-term resistance.
Technical Outlook
CORN (DEC) 10/01/2004: The market was pushed to a new contract low. The stochastic indicator is rising from oversold levels, which is bullish and should support higher prices. 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 upside objective is 208. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around 206 3/4 and 208, while 1st support hits today at 204 1/4 and below there at 202 3/4.
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SOY COMPLEX RECAP
9/30/2004
November Soybeans finished down 6 1/2 at 527, 5 off the high and 2 up from the low. January Soybeans closed down 6 at 534 3/4. This was 2 3/4 up from the low and 5 1/4 off the high.
December Soymeal closed down 2.6 at 159.7. This was 0.2 up from the low and 1.8 off the high.
December Soybean Oil finished down 0.08 at 20.74, 0.08 off the high and 0.24 up from the low.
Expectations for increased harvest pressure into next week and weakness in the other grains helped pressure the market early. Funds were noted sellers of near 2000 contracts into the mid-session but colder than previous forecast models at mid-session helped to slow the selling. The USDA pegged September 1st stocks at 112.5 million bushels as compared with the average trade estimate of 117 million bushels (range 91-145). Last years stocks were 178 million bushels. The USDA also revised the 2003 soybean production estimate to 2.454 billion bushels as compared with 2.418 billion bushels previous. The 36 million bushel jump would indicate higher than expected usage for the 2003/2004 crop season but the stocks forecast leaves beginning stocks for the 2004/2005 season at 112.5 million bushels instead of 105 million projected in the September supply/demand report. For the August crush report, crush was pegged at 102.9 million bushels as compared with trade expectations at 102.5 million bushels. Oil stocks were 1.1178 billion pounds vs. expectations at 1.23 billion pounds and meal stocks at 196,324 tons vs. expectations at 250,000 tons. The data suggests usage is running a bit higher than expected and the news is slightly supportive. Weekly export sales came in at 755,600 tons as compared with trade expectations at 600,000-800,000 tons and 384,500 tons needed each week to reach the USDA projection. Meal sales were 181,600 tons from 50,000-125,000 expected and oil sales were 24,700 tons from 4,000-8,000 expected. India production for soybeans is expected to jump 5.5% this season due to good September rains. Resistance for November soybeans moves down to 531 1/2 and 534 1/2 with support at 524 1/2 and 516 as next support.
Technical Outlook
BEANS (NOV) 10/01/2004: 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 market’s close below the 9-day moving average is an indication the short-term trend remains negative. The gap down on the day session chart is bearish with more selling pressure possible today. The market is in a bearish position with the close below the 2nd swing support number. The near-term upside objective is at 534 3/4. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 530 1/2 and 534 3/4, while 1st support hits today at 523 1/2 and below there at 520 3/4.
MEAL (DEC) 10/01/2004: The stochastic indicator is rising from oversold levels, which is bullish and should support higher prices. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. More selling pressure is likely given yesterday’s gap lower price action on the day session chart. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The near-term upside objective is at 162.1. The next area of resistance is around 160.7 and 162.1, while 1st support hits today at 158.7 and below there at 158.1.
BEANOIL (DEC) 10/01/2004: Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near-term resistance is taken out. The market’s short-term trend is negative as the close remains below the 9-day moving average. The market’s close below the pivot swing number is a mildly negative setup. The next upside objective is 21.02. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around 20.90 and 21.02, while 1st support hits today at 20.58 and below there at 20.38.
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WHEAT MARKET RECAP
9/30/2004
December Wheat finished down 13 at 306 3/4, 7 3/4 off the high and 1 up from the low. March Wheat closed down 14 at 318 3/4. This was 3/4 up from the low and 7 3/4 off the high.
Bearish supply news and speculative selling helped drive December wheat to a new contract low with funds noted sellers of near 6000 contracts. The USDA pegged All Wheat production at 2.163 billion bushels as compared with the average trade estimate at 2.108 billion bushels (range 2.074-2.135). This was up above the high end of the range of estimates and up 40 million bushels from the August USDA forecast of 2.123 billion. Spring wheat production estimates were much higher than expected at 573.6 million bushels as compared with 545 million in the last USDA report. For the USDA quarterly Stocks report, September 1st stocks were pegged at 1.941 billion bushels as compared with the average trade estimate of 1.873 billion bushels (range 1.80-1.934) and 2.039 billion bushels last year. Weekly export sales came in at 470,800 tons as compared with trade expectations at 400,000-550,000 tons and 329,400 tons needed each week to reach the USDA projection. The International Grain Council raised their forecast for world wheat production for the 2004/2005 season by 1 million tons from last months estimate to a new record 615 million tons, up 11% from last year. At their weekly tender, Japan bought 45,000 tonnes of wheat which is lower than normal but all of the wheat is from the US. Resistance for December wheat comes 312 and 313 1/2 303 1/2 and 296 1/2 as next support.
Technical Outlook
WHEAT (DEC) 10/01/2004: The market was pushed to a new contract low. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market’s short-term trend is negative as the close remains below the 9-day moving average. The gap lower on the day session chart is bearish and puts the market on the defensive. There could be some early pressure today given the market’s negative setup with the close below the 2nd swing support. The next downside target is now at 299 3/4. The next area of resistance is around 311 and 317, while 1st support hits today at 302 1/2 and below there at 299 3/4.
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LIVE CATTLE RECAP
9/30/2004
December Live Cattle closed down 0.65 at 87.27. This was 0.32 up from the low and 0.62 off the high.
November Feeder Cattle finished down 0.62 at 109.50, 0.62 off the high and 0.30 up from the low.
A lack of news for the cash market trade in the panhandle along with weakness in the beef market and expectations that cash cattle could trade lower than last weeks $84.00 top helped trigger weakness in cattle futures. Speculative selling pushed futures moderately lower on the session but the market stayed within Wednesday’s range. Slaughter on Tuesday and Wednesday was higher than expected but after several weeks of low slaughter, it appears that a few market-ready cattle are backed-up at feedlots as average slaughter weights are high. Boxed-beef cutout values (600-750 choice) were down $1.48 on the day at mid-session to $135.92 as compared with $137.81 last week at this time. The lower beef price combined with the fact that packers kept their cash bids at just $80.00 helped to keep the tone bearish into the close with talk of packer profit margins moving deeper in the red. .
Technical Outlook
CATTLE (DEC) 10/01/2004: The downside crossover of the 9 & 18 bar moving average is a negative signal. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market’s close below the pivot swing number is a mildly negative setup. The next downside target is now at 86.420. The next area of resistance is around 87.750 and 88.300, while 1st support hits today at 86.820 and below there at 86.420.
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LEAN HOGS RECAP
9/30/2004
December Lean Hogs closed up 0.55 at 69.12. This was 0.92 up from the low and 0.52 off the high.
February Pork Bellies finished up 0.65 at 97.37, 0.42 off the high and 2.07 up from the low.
The market experienced a choppy trading session in Thursday with no dominant trend in a two-sided market. Cash hogs were steady which helped support the discounted futures early on but weakness in cattle and concerns that the cash market will gradually work lower in October due to seasonally higher supply helped to pressure. However, the market good a boost with talk that the weight breakdown on the USDA report on Friday indicated that while weekly slaughters may rise seasonally, the weekly slaughter in September should have been near 5% over last years pace but in October, weekly slaughters should come in near 1% below least year. The CME 2-Day Lean index for the period ending September 28th came in at 80.71 which was up $.10 from the previous session and up from 77.08 on September 15th. This leaves December hogs at a significant discount to the cash market and helped support. Weakness in the pork product from Wednesday afternoon was seen as a slightly bearish influence.
Technical Outlook
HOGS (DEC) 10/01/2004: Negative momentum studies in the neutral zone will tend to reinforce lower price action. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is 67.600. The next area of resistance is around 69.850 and 70.470, while 1st support hits today at 68.420 and below there at 67.600.
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COCOA MARKET RECAP
9/30/2004
December Cocoa finished up 4 at 1453, 22 off the high and 14 up from the low.
Cocoa prices mostly tracked within a tight range after rejecting and initial decline. The London market documented short covering, while the New York market had very few features and that could suggests a near term consolidation. However, the market recently made a downside chart violation and the harvest is starting so the impetus will be on the bears to prove that they can sink prices. The threat against Nigerian cocoa supply is pretty remote but not something to totally discount.
Technical Outlook
COCOA (DEC) 10/01/2004: The upside crossover of the 9 & 18 bar moving average is a positive signal. Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The next downside objective is 1419. The next area of resistance is around 1471 and 1491, while 1st support hits today at 1435 and below there at 1419.
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COFFEE MARKET RECAP
9/30/2004
December Coffee closed down 0.05 at 82.35. This was 2.25 up from the low and 0.90 off the high.
December coffee closed 5 lower on the session with an outside trading day as the move into the September 21st gap area below Wednesday’s lows was met with a lack of new selling interest from the speculator and some light trade house buying supported the 225 point bounce into the close. London closed sharply lower. Talk of the poor condition of trees in many producing areas in Brazil helped to provide some support but rain in the forecast into next week helped limit the buying. Talk that the 17-day truck driver strike in Colombia is beginning to slow exports provided some support.
Technical Outlook
COFFEE (DEC) 10/01/2004: Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. A positive signal for trend short-term was given on a close over the 9-bar moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside target is now at 78.90. The next area of resistance is around 83.90 and 85.15, while 1st support hits today at 80.80 and below there at 78.90.
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SUGAR MARKET RECAP
9/30/2004
October Sugar closed up 0.11 at 8.50. This was 0.24 up from the low and 0.05 off the high.
The sugar market showed signs of strength led by continued strong gains in the October futures which expire today. Open interest, as of September 29th was 13,845 contracts for the October contract with the market closing at a new contract high into expiration. October futures gained 122 points in just the last 8 trading sessions. Traders look for deliveries to come in near 350,000-400,000 tons. The EU sold 213,000 tonnes of white sugar at their weekly export tender as compared with trade expectations of 80,000-100,000 tons. This was the second week in a row of strong exports which helped support.
Technical Outlook
SUGAR (MAR) 10/01/2004: Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. The daily closing price reversal up is a positive indicator that could support higher prices. A positive setup occurred with the close over the 1st swing resistance. The next upside objective is 9.21. The next area of resistance is around 9.15 and 9.21, while 1st support hits today at 8.97 and below there at 8.85.
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COTTON MARKET RECAP
9/30/2004
October Cotton finished down 0.10 at 48.10, equal to the high and 0.60 up from the low.
The market pushed moderately lower early in the session in spite of several signs of improving demand. Weekly export sales came in at 226,200 bales as compared with trade expectations at 150,000-200,000 bales and 128,200 bales necessary each week to reach the USDA projection. Cumulative sales have reached 48.4% of the USDA forecast for the season as compared with 44.2% on average for this time of the year. Shipments came in at 61,300 bales vs. expectations near 50,000-80,000 bales. Annualized mill usage data was also supportive with the August pace at 6.509 million bales and the July usage also revised higher. In the August USDA report, domestic usage was pegged at 6.1 million bales. The friendly usage data combined with reports of rain in West Texas was enough to support s strong rally late in the session. The market managed to move below the September low to the lowest level since August 17th before the speculative selling slowed and the market bounced into the close.
Technical Outlook
COTTON (DEC) 10/01/2004: 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 market setup is somewhat negative with the close under the 1st swing support. The next downside target is 45.48. The next area of resistance is around 46.90 and 47.67, while 1st support hits today at 45.80 and below there at 45.48.