This Could Whip Up Enthusiasm For Stocks
BOND MARKET RECAP
4/5/2005
March Bonds finished down 0-06 at 111-19, 0-10
off the high and 0-06 up from the low.
March 10 Yr Treasury Notes finished down 0-030 at
109-150, 0-055 off the high and 0-035 up from the low.
The Treasury market traded on both sides of
unchanged but really couldn’t hold an opinion. During the session the market
should have seen enough negative information to put prices under pressure as the
Challenger layoff report showed a 20% decline in layoffs and the Chicago Midwest
Manufacturing Index managed a 1.4% increase on the other hand we would have
expected Greenspan dialogue to have applied some additional pressure to
Treasuries as he deflated energy prices slightly by suggesting that high oil
prices would serve to crimp demand and in turn weaken prices ultimately.
However, until the oil market forges a sustained break down we suspect that
energy action will generally remain supportive of Treasury prices.
Technical Outlook
BONDS (JUN) 04/06/2005: The upside crossover (9
above 18) of the moving averages suggests a developing short-term uptrend.
Positive momentum studies in the neutral zone will tend to reinforce higher
price action. The cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. The market’s close below
the pivot swing number is a mildly negative setup. The next upside objective is
112-04. The next area of resistance is around 111-28 and 112-04, while 1st
support hits today at 111-13 and below there at 111-05.
TNOTES (JUN) 04/06/2005: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. The market now above the 18-day moving average suggests the
longer-term trend has turned up. The market’s close below the pivot swing number
is a mildly negative setup. The next upside objective is 109-250. The next area
of resistance is around 109-195 and 109-250, while 1st support hits today at
109-105 and below there at 109-065.
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STOCK INDICES RECAP
4/5/2005
March S&P finished up 5.4 at 1185.2, 1.6 off the
high and 5.2 up from the low.
March S&P E-Mini closed up 5.5 at 1185.25. This
was 6.75 up from the low and 1.75 off the high.
March Dow closed up 40 at 10480. This was 40 up
from the low and 10 off the high.
The stock market put on a happy face early as
initial declines in oil prices prompted some short covering. We also suspect
that economic information Tuesday morning was favorable enough to have
facilitated buying interest and with the earnings cycle kicking off on Wednesday
it is possible that equity prices managed to add to the recent gains. We also
think that the comments from Greenspan about falling oil demand and suggestions
from Saudi Arabia about building stocks creates the potential for a setback in
oil prices, which in turn could whip up optimism toward stocks.
Technical Outlook
S&P 500 (JUN) 04/06/2005: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The market back below the 18-day moving average
suggests the longer-term trend could be turning down. The market has a slightly
positive tilt with the close over the swing pivot. The next upside objective is
1191.10. The next area of resistance is around 1188.60 and 1191.10, while 1st
support hits today at 1181.80 and below there at 1177.50.
SP EMINI (JUN) 04/06/2005: 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 close below the 18-day moving average is
an indication the longer-term trend has turned down. With the close higher than
the pivot swing number, the market is in a slightly bullish posture. The next
upside target is 1192.50. The next area of resistance is around 1189.50 and
1192.50, while 1st support hits today at 1181.00 and below there at 1175.50.
NASDAQ (JUN) 04/06/2005: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
close under the 18-day moving average indicates the longer-term trend could be
turning down. The market has a slightly positive tilt with the close over the
swing pivot. The near-term upside target is at 1500.50. The next area of
resistance is around 1496.00 and 1500.50, while 1st support hits today at
1486.00 and below there at 1480.50.
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CURRENCY MARKET RECAP
4/5/2005
March US Dollar finished down 18 at 8460, 49 off
the high and 1 up from the low.
March Euro finished up 0.21 at 128.96, 0.01 off
the high and 0.57 up from the low.
March Euro Dollar closed down 0.005 at 96.51.
This was 0.005 up from the low and 0.01 off the high.
March Canadian Dollar closed up 0.11 at 82.06.
This was 0.3 up from the low and 0.08 off the high.
March British Pound finished up 0.48 at 187.44,
0.08 off the high and 0.82 up from the low.
March Swiss closed up 0.31 at 83.38. This was
0.51 up from the low and 0.05 off the high.
March Japanese Yen closed up 0.1 at 93.05. This
was 0.51 up from the low and 0.01 off the high.
The Dollar seemed to fade after making a new high
for the move early in the session. Later in the session the setback off the
highs was justified by the fact that Greenspan dampened the threat of energy
price inspired inflation with his dialogue. In fact, Greenspan suggested that
energy demand would fall if oil prices remained high and that seemed to alter
the near term sentiment in the marketplace. The Dollar should have been
supported by a stronger than expected Chicago Fed Midwest manufacturing Index
increase and a moderate decline in the Challenger Layoff survey but in the end
it was clear that the scheduled numbers were of little interest to the currency
markets.
Technical Outlook
YEN (JUN) 04/06/2005: 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 18-day moving average is an indication the
longer-term trend has turned down. The upside daily closing price reversal gives
the market a bullish tilt. With the close higher than the pivot swing number,
the market is in a slightly bullish posture. The next downside target is now at
92.41. Some caution in pressing the downside is warranted with the RSI under 30.
The next area of resistance is around 93.30 and 93.44, while 1st support hits
today at 92.79 and below there at 92.41.
EURO (JUN) 04/06/2005: Daily stochastics are
trending lower but have declined into oversold territory. The close under the
18-day moving average indicates the longer-term trend could be turning down. The
daily closing price reversal up is a positive indicator that could support
higher prices. The market has a slightly positive tilt with the close over the
swing pivot. The next downside target is now at 128.24. The next area of
resistance is around 129.25 and 129.40, while 1st support hits today at 128.67
and below there at 128.24.
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PRECIOUS METALS RECAP
4/5/2005
April Gold closed up 0.6 at 424.5. This was 0.5
up from the low and 1 off the high.
March Silver finished up 0.019 at 7.043, 0.052
off the high and 0.068 up from the low.
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A weaker Dollar and stronger Euro currency
provided support to June gold, but resistance at $431 may be difficult to
penetrate given the outlook for interest rates. While crude oil prices fell
Tuesday, they remain well above $50 per barrel which is getting the Fed
concerned about the impact of high energy costs on inflation. There is on-going
concern that the IMF will sell part of its gold holdings to relieve 3rd world
debt.
Technical Outlook
SILVER (MAY) 04/06/2005: Daily stochastics are
showing positive momentum from oversold levels, which should reinforce a move
higher if near term resistance is taken out. The major trend has turned down
with the cross over back below the 18-day moving average. With the close higher
than the pivot swing number, the market is in a slightly bullish posture. The
next upside target is 715.9. The next area of resistance is around 710.3 and
715.9, while 1st support hits today at 698.4 and below there at 692.0.
GOLD (APR) 04/06/2005: Momentum studies are still
bearish but are now at oversold levels and will tend to support reversal action
if it occurs. The market back below the 18-day moving average suggests the
longer-term trend could be turning down. The close over the pivot swing is a
somewhat positive setup. The next downside target is 423.2. The next area of
resistance is around 425.2 and 426.1, while 1st support hits today at 423.8 and
below there at 423.2.
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COPPER MARKET RECAP
4/5/2005
March Copper closed down 1.05 at 148.45. This was
2.00 up from the low and 0.15 off the high.
July copper remains trapped in a 151 to 145
trading range as a weak dollar helped to lift the market off its inter-day lows.
Technically, the market has become over bought and the July contract has failed
at several attempts to make a solid push through 150 level. There is growing
concern that Index funds are losing interest in the metal and may begin to
liquidate holdings. There is concern that rising interest rates and rising oil
prices could begin to dampen physical demand for the metal.
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ENERGY MARKET RECAP
4/5/2005
April Crude Oil closed down 0.97 at 56.04. This
was 0.04 up from the low and 1.16 off the high.
April Heating Oil closed down 2.11 at 162.11.
This was 0.31 up from the low and 4.19 off the high.
April Unleaded Gas finished down 3.36 at 168.80,
3.80 off the high and 0.25 up from the low.
April Natural Gas finished down 0.02 at 7.57,
0.01 off the high and 0.09 up from the low.
April Propane closed down 0.02 at 0.90. This was
equal to the low and 0.01 off the high.
Energy prices waffled around both sides of
unchanged on Tuesday. The market was unsure how to factor news that the US was
expecting to see a ramping up of refinery demand for crude oil. On the other
hand the market certainly wasn’t inclined to drift lower in the wake of private
forecasts of an increase in OPEC tanker supply flow. While the private forecast
raised crude oil flow from OPEC by only 80,000 barrels per day, that news could
have dampened sentiment if the bull case wasn’t so thoroughly entrenched.
Apparently the OPEC stance is to raise the production ceiling by 500,000 barrels
per day in May and then not to act again until late in the year. Therefore, the
market thinks that more supply is on the way but that it won’t come in enough
time to totally alleviate the tightness already in place. On the other hand,
Greenspan comments were seen as bearish as were comments from Saudi Arabia about
building inventories and that could create the chance of a near term liquidation
in energy prices.
Technical Outlook
CRUDE OIL (MAY) 04/06/2005: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
market now above the 18-day moving average suggests the longer-term trend has
turned up. The market setup is somewhat negative with the close under the 1st
swing support. The near-term upside objective is at 57.52. The next area of
resistance is around 56.64 and 57.52, while 1st support hits today at 55.44 and
below there at 55.12.
UNLEADED (MAY) 04/06/2005: The daily stochastics
gave a bearish indicator with a crossover down. Stochastics turning bearish at
overbought levels will tend to support lower prices if support levels are
broken. The cross over and close above the 18-day moving average indicates the
longer-term trend has turned up. The swing indicator gave a moderately negative
reading with the close below the 1st support number. The next downside objective
is 165.64. The next area of resistance is around 170.82 and 173.73, while 1st
support hits today at 166.78 and below there at 165.64.
HEATING OIL (MAY) 04/06/2005: A bearish signal
was triggered on a crossover down in the daily stochastics. Daily stochastics
turning lower from overbought levels is bearish and will tend to reinforce a
downside break especially if near term support is penetrated. The market now
above the 18-day moving average suggests the longer-term trend has turned up.
The market’s close below the pivot swing number is a mildly negative setup. The
next downside target is now at 158.58. The next area of resistance is around
164.36 and 167.58, while 1st support hits today at 159.86 and below there at
158.58.
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CORN MARKET RECAP
4/5/2005
May Corn finished down 4 1/4 at 205 1/2, 2
1/2 off the high and 1/4 up from the low. December Corn closed down 4 1/2 at 230
1/2. This was 1/2 up from the low and 3 off the high.
Fund selling drove the market to the lowest level
since February 16th with growing concerns over old crop export demand helping to
pressure. Japanese importers have asked the government to ease rules on GMO
corn. Under the current Japanese GMO rules, the importer will be forced to
either destroy or ship back cargoes of US corn if the government finds the cargo
to be contaminated with unapproved GMO corn. Syngenta announced in late March
that some of their corn seeds were mistakenly contaminated (2001 to 2004) with
Bt10 and buyers await news on just how wide spread the problem might be. In the
meantime, exporters in the US are fearful that new buyers will become scarce and
export shipments could drop off in the weeks just ahead. With hefty old crop
ending stocks, the weak export tone could add to the bearish demand outlook and
keep fund traders in a long liquidation mode. May corn is off 13 cents from
Thursday’s peak and is in a short-term oversold condition but there is no
technical sign of a low. Resistance comes in at 207 1/2 with 203 1/4 and 202 as
support.
Technical Outlook
CORN (MAY) 04/06/2005: Daily stochastics are
trending lower but have declined into oversold territory. The market back below
the 18-day moving average suggests the longer-term trend could be turning down.
The gap lower price action on the day session chart is a bearish indicator for
trend. 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
203 1/2. The market is approaching oversold levels on an RSI reading under 30.
The next area of resistance is around 206 3/4 and 208 3/4, while 1st support
hits today at 204 1/4 and below there at 203 1/2.
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SOY COMPLEX RECAP
4/5/2005
May Soybeans finished up 2 1/2 at 617 1/2, 5 1/2
off the high and 9 1/2 up from the low. November Soybeans closed up 4 3/4 at 606
1/4. This was 10 1/4 up from the low and 2 3/4 off the high.
May Soymeal closed up 0.9 at 184.1. This was 2.8
up from the low and 1.9 off the high.
May Soybean Oil finished up 0.02 at 22.82, 0.17
off the high and 0.13 up from the low.
The outside day and higher close leaves the
technical impression that a near-term low could be in place. More fund selling
pushed the market lower earlier in the session with May soybeans moving to the
lowest level since February 25th. Follow-through technical selling was noted as
support levels were violated; however, the market lacked new selling interest
from fund traders who have been active recently. A firm demand tone and a lack
of producer selling have supported a little higher basis bids at the gulf for
soybeans this morning. Midwest basis levels were also firm. As the Brazil
harvest moves forward and more new crop supply becomes available, more and more
of the export business is expected to shift away from the US. More rains in the
forecast for southern Brazil could slow the harvest activity. Weakness at the
China exchange and a general fear of more long liquidation selling pressures
from fund traders added to the bearish tone. May soybean support comes in at 612
and 608 with 628 1/4 and 634 1/2 as resistance.
Technical Outlook
BEANS (MAY) 04/06/2005: Momentum studies are
declining, but have fallen to oversold levels. The market back below the 18-day
moving average suggests the longer-term trend could be turning down. The daily
closing price reversal up on the daily chart is somewhat positive. With the
close higher than the pivot swing number, the market is in a slightly bullish
posture. The next downside target is now at 601 1/2. The next area of resistance
is around 625 and 631 1/2, while 1st support hits today at 610 and below there
at 601 1/2.
MEAL (MAY) 04/06/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
close under the 18-day moving average indicates the longer-term trend could be
turning down. The upside closing price reversal on the daily chart is somewhat
bullish. It is a mildly bullish indicator that the market closed over the pivot
swing number. The next downside objective is 179.2. The next area of resistance
is around 186.4 and 188.5, while 1st support hits today at 181.8 and below there
at 179.2.
BEANOIL (MAY) 04/06/2005: Momentum studies are
declining, but have fallen to oversold levels. The major trend has turned down
with the cross over back below the 18-day moving average. The close over the
pivot swing is a somewhat positive setup. The next downside objective is now at
22.53. The next area of resistance is around 22.97 and 23.13, while 1st support
hits today at 22.67 and below there at 22.53.
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WHEAT MARKET RECAP
4/5/2005
May Wheat finished down 5 1/4 at 311 1/4, 6 1/4 off the high
and 3/4 up from the low. July Wheat closed down 4 at 321 1/4. This was 1 1/4 up
from the low and 5 1/4 off the high.
May wheat closed lower for the 7th session in a
row with funds noted sellers late in the session to drive the market down to the
lowest level since February 22nd. News of good crop conditions and continued
export concerns pressured the market early but the selling slowed with talk that
these factors have already been absorbed by the market on the 3-day collapse in
futures to yesterday’s lows. Egypt has agreed to buy 60,000 tonnes of US wheat
and 270,000 tonnes of Russian wheat. While not quite as bearish as originally
believed, the hefty Russian supply and fears that Egypt may be out of the market
until the new crop season helped to pressure the market yesterday and news that
some of the business went to the US was slightly supportive. For the first
weekly crop progress report of the year, released after the close, the winter
wheat crop rated in good to excellent condition came in at 68% as compared with
48% last year and 56% as the 15-year average for this time of the year. Crops
rated in poor to very poor condition came in at just 6% as compared with 21%
last year and 13% as the 15-year average. May wheat resistance comes in at 315
with 309 1/2 and 306 1/4 as next support.
Technical Outlook
WHEAT (MAY) 04/06/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
major trend has turned down with the cross over back below the 18-day moving
average. The market setup is somewhat negative with the close under the 1st
swing support. The next downside target is now at 305 3/4. With a reading under
30, the 9-day RSI is approaching oversold levels. The next area of resistance is
around 314 3/4 and 319 1/2, while 1st support hits today at 307 3/4 and below
there at 305 3/4.
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LIVE CATTLE RECAP
4/5/2005
April Live Cattle finished up 0.17 at 88.95, 0.05
off the high and 0.60 up from the low.
May Feeder Cattle closed up 0.37 at 105.67. This
was 0.62 up from the low and 0.12 off the high.
June cattle closed 35 points higher on the
session and up 82 points from the lows of the day as commercial buying emerged
on the early break to the lowest level since March 3rd. Talk of slow volume of
boxed-beef sales this week led to ideas that the beef market had topped-put and
the early weakness. The low of the day was also the 50-day moving average which
has not been violated since March 2nd and the bullish technical action could
attract some new buying on Wednesday. Boxed-beef cut-out values at mid-session
were up $.12 to $153.66 as compared with $150.22 last week. Slaughter came in at
118,000 head from trade estimates of 115,000-119,000 head.
Technical Outlook
CATTLE (APR) 04/06/2005: The moving average
crossover up (9 above 18) indicates a possible developing short-term uptrend.
Stochastics are at mid-range but trending higher, which should reinforce a move
higher if resistance levels are taken out. The close under the 18-day moving
average indicates the longer-term trend could be turning down. The daily closing
price reversal up is a positive indicator that could support higher prices. The
market’s close below the pivot swing number is a mildly negative setup. The next
upside target is 89.450. The next area of resistance is around 89.250 and
89.450, while 1st support hits today at 88.650 and below there at 88.170.
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LEAN HOGS RECAP
4/5/2005
April Lean Hogs finished down 0.87 at 68.67, 0.87
off the high and 0.27 up from the low.
May Pork Bellies closed down 1.00 at 93.40. This
was 0.60 up from the low and 0.95 off the high.
With cash markets trading $.50 higher on the day,
June futures managed a slightly higher opening but long liquidation selling
pressures emerged from fund traders and futures closed sharply lower on the day.
Traders remain nervous with a hefty premium of futures over the cash market and
with the ability of the pork product market to absorb the increased production
of the past week. Average slaughter weights are high and producer marketings
have been higher than expected since the last USDA Hogs and Pigs report. The CME
2-day lean index was up 7 cents to 67.13 as compared with 67.72 the previous
week. Slaughter came in at 392,000 head from trade estimates of 394,000-400,000
head.
Technical Outlook
HOGS (APR) 04/06/2005: 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 close under the 18-day moving average
indicates the longer-term trend could be turning down. The close below the 1st
swing support could weigh on the market. The near-term upside objective is at
69.950. The next area of resistance is around 69.220 and 69.950, while 1st
support hits today at 68.100 and below there at 67.700.
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COCOA MARKET RECAP
4/5/2005
May Cocoa finished down 33 at 1555, 22 off the
high and 2 up from the low.
July cocoa closed lower on producer and fund
selling, although the market managed to hold above support at $1,575. First
notice day for the May contract is on April 18th. The South African President
said the peace talks between Ivory Coast political factions are going well.
Rising cocoa warehouse stocks are adding to the negative market tone. Germany
reported 1st quarter cocoa grind to be up 1.1% from a year ago. Internal
farmgate cocoa prices in most areas in the Ivory Coast were lower for March 28 —
Apr 3rd due to weak demand and low quality beans.
Technical Outlook
COCOA (MAY) 04/06/2005: Daily stochastics are
trending lower but have declined into oversold territory. The major trend has
turned down with the cross over back below the 18-day moving average. The
market’s close below the 1st swing support number suggests a moderately negative
setup for today. The next downside target is now at 1536. The next area of
resistance is around 1567 and 1584, while 1st support hits today at 1543 and
below there at 1536.
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COFFEE MARKET RECAP
4/5/2005
May Coffee closed up 3.05 at 126.10. This was
3.00 up from the low and 0.40 off the high.
July coffee closed 305 higher on the session as
light commercial buying and a lack of continued long liquidation selling helped
to support. Cash tightness is developing in Brazil as producer selling has
slowed on the recent downside correction. Producer selling and exports were more
active than traders had anticipated in February and March. After preliminary
estimates of March exports came in at near 2 million bags, Brazil exported 2.4
million bags for the month which was up 11.8% from last year. The news was
released after the close and may come as a surprise. Guatemala is expected to
export 3.45 million bags for the 2004/2005 season which is up 4.6% from last
year.
Technical Outlook
COFFEE (MAY) 04/06/2005: The major trend could be
turning up with the close back above the 40-day moving average. Momentum studies
are declining, but have fallen to oversold levels. The market back below the
18-day moving average suggests the longer-term trend could be turning down.
There could be more upside follow through since the market closed above the 2nd
swing resistance. The next downside target is now at 122.10. The next area of
resistance is around 127.80 and 128.85, while 1st support hits today at 124.45
and below there at 122.10.
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SUGAR MARKET RECAP
4/5/2005
May Sugar closed up 0.14 at 8.55. This was 0.16
up from the low and 0.04 off the high.
After a 38 point break off of Friday’s highs, the
sugar market managed to find some trade house and speculator buying support and
the lack of much commercial selling help push July futures higher to close 12
points up on the day. Traders continue to view the possibility of import
activity ahead as a bullish force but with the Brazil harvest picking up steam,
supply factors look a bit more negative with expectations for a record high cane
crop in Brazil this year. A recovery bounce in London led by the nearby
contracts helped to provide some support. Traders await results of a tender to
buy 100,000 tonnes of raw sugar from Egypt. While there has been some buying
interest in the cash market from Russia, there has been a lack of interest from
India which has helped keep the futures market in a long liquidation mode.
Technical Outlook
SUGAR (MAY) 04/06/2005: The crossover up in the
daily stochastics is a bullish signal. Daily stochastics are showing positive
momentum from oversold levels, which should reinforce a move higher if near term
resistance is taken out. The market back below the 18-day moving average
suggests the longer-term trend could be turning down. The upside closing price
reversal on the daily chart is somewhat bullish. A positive setup occurred with
the close over the 1st swing resistance. The near-term upside target is at 8.71.
The next area of resistance is around 8.64 and 8.71, while 1st support hits
today at 8.45 and below there at 8.32.
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COTTON MARKET RECAP
4/5/2005
May Cotton finished down 0.55 at 52.05, 0.45 off
the high and 0.10 up from the low.
After hitting the highest levels since September
last week, May cotton closed lower for the 6th session in a row. Fears of trade
retaliation on China cotton imports if the Bush Administration were to slap on
tariffs on textile imports from China left the market in a choppy downtrend.
Volume has been slow the past several sessions and open interest is coming off a
March 16th peak. It is still a bit early for US weather to become a factor.
Trade house buying helped to provide underlying support.
Technical Outlook
COTTON (MAY) 04/06/2005: The daily stochastics
have crossed over down which is a bearish indication. Stochastics trending lower
at midrange will tend to reinforce a move lower especially if support levels are
taken out. The close under the 18-day moving average indicates the longer-term
trend could be turning down. The close below the 1st swing support could weigh
on the market. The next downside objective is now at 51.59. The next area of
resistance is around 52.32 and 52.68, while 1st support hits today at 51.78 and
below there at 51.59.