This Is The Report The Market Will Be Focused On This Week
BOND MARKET RECAP
5/9/2005
June Bonds finished up 0-01 at 114-01, 0-02 off
the high and 0-07 up from the low.
June 10 Yr Treasury Notes finished down 0-030 at
110-295, 0-015 off the high and 0-040 up from the low.
The Treasury market managed to respect the
prior day’s critical low and that would seem to increase the odds that the
market will respect the low made in the aftermath of the stronger than expected
US payroll report. With the Treasury market confronted with a series of auctions
over the coming sessions we suspect that volatility will be set to expand again
following an unusually tight trading range on Monday. The trade is mixed on the
potential interest in the auction with some players thinking that the strong
payroll report will require higher yields to attract players, while others
suggest that the market has already pushed up yields enough with the break off
the April highs to produce sufficient demand for the coming auctions.
Technical Outlook
BONDS (JUN) 05/10/2005: Momentum studies trending
lower at mid-range should accelerate a move lower if support levels are taken
out. The close under the 18-day moving average indicates the longer-term trend
could be turning down. The market’s close below the pivot swing number is a
mildly negative setup. The next downside target is now at 113-23. The next area
of resistance is around 114-05 and 114-08, while 1st support hits today at
113-29 and below there at 113-23.
TNOTES (JUN) 05/10/2005: Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The close
under the 18-day moving average indicates the longer-term trend could be turning
down. It is a slightly negative indicator that the close was under the swing
pivot. The next downside target is 110-225. The next area of resistance is
around 111-015 and 111-050, while 1st support hits today at 110-265 and below
there at 110-225.
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STOCK INDICES RECAP
5/9/2005
June S&P finished up 7.1 at 1178.3, 2.2 off the
high and 8.3 up from the low.
June S&P E-Mini closed up 6.75 at 1178. This was
8 up from the low and 2.75 off the high.
June Dow closed up 37 at 10374. This was 59 up
from the low and 11 off the high.
The stock market surprised a number of players by
extending the recent gains even though broad market sentiment hasn’t markedly
improved following the much better than expected US non-farm payroll report last
Friday. However, the stock market certainly benefited from a series of merger
and buyout stories on Monday morning. We also think that a smaller than expected
rise in wholesale inventories prompted players to upgrade their view toward the
US economy. With energy prices showing more sideways price action we can
understand the favorable view on the economy gaining some traction in the
marketplace. However, the stock market will look to this Thursday’s US retail
sales report for significant guidance on the economy.
Technical Outlook
S&P 500 (JUN) 05/10/2005: The market now above
the 40-day moving average suggests the longer-term trend has turned up. Daily
stochastics have risen into overbought territory which will tend to support
reversal action if it occurs. The major trend could be turning up with the close
back above the 18-day moving average. The upside daily closing price reversal
gives the market a bullish tilt. Market positioning is positive with the close
over the 1st swing resistance. The near-term upside objective is at 1187.27. The
next area of resistance is around 1183.55 and 1187.27, while 1st support hits
today at 1173.05 and below there at 1166.28.
SP EMINI (JUN) 05/10/2005: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The cross over and close above the 18-day moving average indicates
the longer-term trend has turned up. It is a mildly bullish indicator that the
market closed over the pivot swing number. The next upside target is 1179.06.
The next area of resistance is around 1178.87 and 1179.06, while 1st support
hits today at 1178.13 and below there at 1177.57.
NASDAQ (JUN) 05/10/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The major trend could be
turning up with the close back above the 18-day moving average. The upside
closing price reversal on the daily chart is somewhat bullish. The market has a
slightly positive tilt with the close over the swing pivot. The near-term upside
target is at 1478.75. The next area of resistance is around 1472.50 and 1478.75,
while 1st support hits today at 1454.50 and below there at 1442.75.
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CURRENCY MARKET RECAP
5/9/2005
June US Dollar finished down 2 at 8460, 16 off
the high and 5 up from the low.
June Euro finished up 0.15 at 128.44, 0.16 off
the high and 0.24 up from the low.
June Euro Dollar closed unchanged at 96.55. This
was 0.005 up from the low and equal to the high.
June Canadian Dollar closed up 0.16 at 80.79.
This was 0.12 up from the low and 0.1 off the high.
June British Pound finished down 0.74 at 187.98,
0.16 off the high and 0.22 up from the low.
June Swiss closed up 0.06 at 83.08. This was 0.15
up from the low and 0.07 off the high.
June Japanese Yen closed down 0.56 at 95.04. This
was 0.14 up from the low and 0.09 off the high.
The Dollar ran to a 3 week high early but then
failed to hold the gains. The fact that the Dollar failed to stay firm in the
face of additional US equity market gains would seem to suggest that the Dollar
is still being limited by concern of changes in the Chinese currency. For the
Dollar not to have extended recent strength in the wake of disappointing UK
manufacturing readings and slack European projections suggests that the Dollar
isn’t poised to dominate as a result of the recent payroll improvement.
Furthermore, with the Press rife with talk of more aggressive US Fed rate hikes
we would have thought that the Dollar would have been able to drive above the
prior day’s highs.
Technical Outlook
YEN (JUN) 05/10/2005: The major trend has turned
down with the cross over back below the 60-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 major trend could be turning up with the
close back above the 18-day moving average. The gap lower price action on the
day session chart is a bearish indicator for trend. The defensive setup, with
the close under the 2nd swing support, could cause some early weakness. The next
downside objective is 94.80. The next area of resistance is around 95.15 and
95.25, while 1st support hits today at 94.93 and below there at 94.80.
EURO (JUN) 05/10/2005: 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 market’s close below the pivot swing number is a mildly negative setup. The
next downside objective is 128.02. The next area of resistance is around 128.63
and 128.82, while 1st support hits today at 128.24 and below there at 128.02.
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PRECIOUS METALS RECAP
5/9/2005
June Gold closed unchanged at 426.9. This was 1.5
up from the low and 0.4 off the high.
July Silver finished up 0.115 at 7.08, 0.04 off
the high and 0.115 up from the low.
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The gold market did manage to hold above the
prior day’s spike down low. We might also add that the Dollar failed to hold
together after managing to reach a 3 week high. While the improved look toward
the US economy seemed to underpin most metals markets the silver seemed to get
more intense small spec buying than the gold market did during the session on
Monday. The US Treasury Secretary continued to call for a flexible Chinese
currency and once again suggested that the time for change in the Chinese
currency was “now”. However, it is clear that the “industrial” precious metals
(silver & platinum) are getting more of a positive benefit from the ongoing
improvement in the macro economic outlook than the gold market.
Technical Outlook
SILVER (JUL) 05/10/2005: The daily stochastics
gave a bullish indicator with a crossover up. Momentum studies are rising from
mid-range, which could accelerate a move higher if resistance levels are
penetrated. The close below the 18-day moving average is an indication the
longer-term trend has turned down. With the close over the 1st swing resistance
number, the market is in a moderately positive position. The next upside target
is 721.6. The next area of resistance is around 715.8 and 721.6, while 1st
support hits today at 700.3 and below there at 690.7.
GOLD (JUN) 05/10/2005: 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. It is a slightly negative indicator
that the close was lower than the pivot swing number. The next downside
objective is now at 424.8. The next area of resistance is around 427.8 and
428.5, while 1st support hits today at 426.0 and below there at 424.8.
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COPPER MARKET RECAP
5/9/2005
June Copper closed up 0.45 at 146.55. This was
equal to the low and 1.75 off the high.
Despite the fact that a number of analysts
continue to predict a 2005 top in base metals prices it would seem like the
Chinese did come back as light buyers following the extended holiday. However,
considering the magnitude of the declines in copper, while the Chinese were on
holiday some in the trade might have been disappointed with pace of the buying
on Monday. However, Peru noted a 3.5% decline in March copper output and that
should have given the copper a little firmer tone than was seen especially
considering the positive action in the US equity market. In conclusion, the
rally Monday had to be a little disappointing for the copper bulls.
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ENERGY MARKET RECAP
5/9/2005
June Crude Oil closed up 1.07 at 52.03. This was
1.38 up from the low and 0.22 off the high.
June Heating Oil closed up 0.91 at 144.02. This
was 2.42 up from the low and 0.28 off the high.
June Unleaded Gas finished up 1.13 at 148.73,
0.47 off the high and 3.03 up from the low.
June Natural Gas finished up 0.05 at 6.67, 0.01
off the high and 0.08 up from the low.
June Propane closed down 0.01 at 0.82. This was
equal to the low and equal to the high.
The energy complex continued to sit right on the
key pivot point of 50.99 basis the June crude contract but in the late afternoon
trade Monday the market managed another late rally. Despite the rise above the
bull/bear line it would seem that many longs are concerned about getting long
ahead of the coming inventory reports. While the improved macro economic outlook
continues to provide support to prices the market doesn’t appear to be getting
as much psychological support off the potential for summer supply problems. The
Qatar Oil Minister suggested that given any firming of demand there could still
be a significant supply shortage in the 4th quarter of 2005. The Qatar Oil
Minister also suggested that OPEC spare capacity was in the process of shrinking
and that also seemed to provide some support under energy prices. Some traders
also pointing to ongoing violence in Iraq as possible supporting factor for
prices but overall anxiety levels remain low.
Technical Outlook
CRUDE OIL (JUN) 05/10/2005: 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. With the close over the
1st swing resistance number, the market is in a moderately positive position.
The next upside target is 53.21. The next area of resistance is around 52.78 and
53.21, while 1st support hits today at 51.28 and below there at 50.22.
UNLEADED (JUN) 05/10/2005: 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 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 144.59. The next area of resistance is around 150.48
and 151.59, while 1st support hits today at 146.98 and below there at 144.59.
HEATING OIL (JUN) 05/10/2005: Momentum studies
are still bearish but are now at oversold levels and will tend to support
reversal action if it occurs. The major trend has turned down with the cross
over back below the 18-day moving average. The market has a slightly positive
tilt with the close over the swing pivot. The next downside objective is now at
140.79. The next area of resistance is around 145.36 and 146.18, while 1st
support hits today at 142.67 and below there at 140.79.
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CORN MARKET RECAP
5/9/2005
July Corn finished down 1/2 at 207 3/4, 2
1/4 off the high and 1 1/4 up from the low. December Corn closed down 1/4 at 225
3/4. This was 1 1/4 up from the low and 2 off the high.
Talk of drier than normal weather for the eastern
cornbelt and short-covering helped support the early bounce this morning,
however, a rainy forecast for this week and expectations of an active plantings
pace helped trigger the late sell-off. While there is concern for crop potential
longer-term if dryness persists, the forecast for a good rain event on Thursday
across the US with 70-80% coverage expected helped ease the buying support.
Weekly export inspections came in at 30.2 million bushels as compared with trade
expectations at 22-27 million and 49.8 million bushels necessary each week to
reach the USDA projection for the season. Cumulative shipments have reached 58%
of the forecast for the season as compared with 65.5% as the 5-year average for
this time of the year. As a result of the slow export pace, traders are looking
for another revision lower in exports and higher in ending stocks for Thursday’s
USDA supply/demand report. A sales of 110,000 tonnes of US corn to unknown
destination helped support. Traders are looking for planting progress to reach
70-80% complete for tonight’s weekly progress report as compared with 52% last
week. A Reuters survey of traders showed an average trade estimate for new crop
ending stocks for the report Thursday to come in near 2.222 billion bushels with
a range of 2.030 to 2.416 billion bushels as compared with old crop ending
stocks pegged at 2.215 billion bushels in last months report. Traders are also
looking for another 25-50 million bushel decline in old crop usage and for old
crop ending stocks (2004/2005) to jump to near 2.260 billion bushels from 2.215
billion last month. Support for July corn comes in at 205 1/2 with resistance at
211 1/4.
Technical Outlook
CORN (JUL) 05/10/2005: Daily stochastics are
trending lower but have declined into oversold territory. The close below the
18-day moving average is an indication the longer-term trend has turned down.
The market could take on a defensive posture with the daily closing price
reversal down. It is a slightly negative indicator that the close was under the
swing pivot. The next downside objective is now at 204 1/2. The next area of
resistance is around 209 1/2 and 211 1/2, while 1st support hits today at 206
and below there at 204 1/2.
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SOY COMPLEX RECAP
5/9/2005
July Soybeans finished down 2 1/4 at 637 3/4, 9
3/4 off the high and 1 3/4 up from the low. November Soybeans closed up 2 1/2 at
627 1/2. This was 1 1/4 up from the low and 7 off the high.
July Soymeal closed down 1.7 at 192.9. This was
0.4 up from the low and 4.1 off the high.
July Soybean Oil finished up 0.25 at 23.56, 0.19
off the high and 0.13 up from the low.
The market is building more of a weather premium
for new crop due to lower than normal cumulative rainfall since March 1st for
areas in the Eastern cornbelt but the recent dry weather has been favorable to
active planting pace. In addition, the forecast for 1/2 to 1 1/2 inches of
widespread coverage for the Midwest for later this week is seen as a short-term
bearish weather factor. A firm tone in the cash market, a lack of deliveries for
the products and only 12 deliveries for soybeans this morning has helped
support. For the weekly crop progress report tonight, traders are looking for
the crop to be 30-40% planted as compared with 8% last week. Weekly export
inspections came in at 8.25 million bushels as compared with trade expectations
at 11-16 million. Cumulative shipments have reached 95% of the forecast for the
season as compared with 86% as the 5-year average for this time of the year.
This data has traders believing that the supply/demand report this week might
show a slight increase in exports and another decline in ending stocks. A
Reuters survey of traders showed an average trade estimate for new crop ending
stocks for the report Thursday to come in near 368 million bushels with a range
of 295 to 430 million bushels as compared with old crop ending stocks pegged at
375 million bushels in last months report. Traders also look for a 12 million
bushel drop in old crop ending stocks due to higher than expected exports. July
soybean support comes in at 629 with 644 resistance.
Technical Outlook
BEANS (JUL) 05/10/2005: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The market now above the 18-day moving average
suggests the longer-term trend has turned up. The daily closing price reversal
down puts the market on the defensive. With the close higher than the pivot
swing number, the market is in a slightly bullish posture. The near-term upside
objective is at 651 1/4. The next area of resistance is around 643 1/2 and 651
1/4, while 1st support hits today at 632 and below there at 628 1/4.
MEAL (JUL) 05/10/2005: The downside crossover of
the 9 & 18 bar moving average is a negative signal. Stochastics trending lower
at midrange will tend to reinforce a move lower especially if support levels are
taken out. The close below the 18-day moving average is an indication the
longer-term trend has turned down. The downside closing price reversal on the
daily chart is somewhat negative. The market’s close below the pivot swing
number is a mildly negative setup. The next downside objective is 189.4. The
next area of resistance is around 195.1 and 198.3, while 1st support hits today
at 190.7 and below there at 189.4.
BEANOIL (JUL) 05/10/2005: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. The cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. Follow through buying
looks likely if the market can hold yesterday’s gap on the day session chart.
The market has a slightly positive tilt with the close over the swing pivot. The
near-term upside target is at 23.89. The next area of resistance is around 23.72
and 23.89, while 1st support hits today at 23.40 and below there at 23.26.
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WHEAT MARKET RECAP
5/9/2005
July Wheat finished down 3 1/2 at 313 1/2, 7 1/2 off the high
and 3/4 up from the low. December Wheat closed down 3 1/2 at 331 3/4. This was
1/4 up from the low and 7 off the high.
Talk of a drier trend in the far western and
southern areas of the winter wheat belt helped support more buying and
short-covering in wheat early today but the outlook for the USDA Crop Production
and Supply/demand report news on Thursday was enough to keep buyers on the
sidelines and the weak technical action does not bode well for the price trend
into the key report. A hot and dry trend into the second half of May is seen as
a potentially bullish weather development as areas of western Kansas, Oklahoma
and Texas have been dry and heat in the forecast could intensify the need for
good rains in the area. Crop conditions are currently favorable but dry weather
in the region could stress crops quickly. The Kansas crop is in need of rains
with fields in the heading stage and a lack of rain in the forecast helped
support. Export demand news is quiet and deliveries of 155 contracts this
morning were seen as a slightly bearish factor. Weekly export inspections came
in at 13.78 million bushels as compared with trade expectations at 18-23
million. Cumulative shipments have reached 96.9% of the forecast for the season
as compared with 93.1% as the 5-year average for this time of the year. A
Reuters survey of traders showed an average trade estimate for new crop ending
stocks for the report Thursday to come in near 574 million bushels with a range
of 491 to 682 million bushels as compared with old crop ending stocks pegged at
541 million bushels in last months report. July wheat support comes in at 312
and 305 1/2 with 318 3/4 as resistance.
Technical Outlook
WHEAT (JUL) 05/10/2005: The moving average
crossover down (9 below 18) indicates a possible developing short-term
downtrend. Daily stochastics are trending lower but have declined into oversold
territory. The close below the 18-day moving average is an indication the
longer-term trend has turned down. The daily closing price reversal down puts
the market on the defensive. The market’s close below the 1st swing support
number suggests a moderately negative setup for today. The next downside target
is now at 307. The next area of resistance is around 317 1/2 and 323 1/4, while
1st support hits today at 309 1/2 and below there at 307.
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LIVE CATTLE RECAP
5/9/2005
June Live Cattle finished up 0.35 at 85.40, 0.15
off the high and 0.45 up from the low.
May Feeder Cattle closed up 0.85 at 111.07. This
was 0.82 up from the low and 0.12 off the high.
June cattle closed 35 higher with a quiet inside
trading session. The discount of futures to the cash market and hopes that Japan
is getting closer to allowing imports of US beef helped to support. Cash cattle
traded at $91.00 last week and there is still a weather tone for this week but
the discount of futures to the cash helped support the market in spite of the
sharp break in hogs. Boxed-beef cut-out values were down $.27 at mid session
today to $158.92 as compared with $163.89 one week ago. Slaughter came in at
115,000 head as compared with trade expectations of 117,000-124,000 head.
Technical Outlook
CATTLE (JUN) 05/10/2005: The market now above the
40-day moving average suggests the longer-term trend has turned up. The moving
average crossover down (9 below 18) indicates a possible developing short-term
downtrend. Negative momentum studies in the neutral zone will tend to reinforce
lower price action. The close below the 18-day moving average is an indication
the longer-term trend has turned down. The market has a slightly positive tilt
with the close over the swing pivot. The next downside target is 84.750. The
next area of resistance is around 85.700 and 85.900, while 1st support hits
today at 85.120 and below there at 84.750.
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LEAN HOGS RECAP
5/9/2005
June Lean Hogs finished down 1.02 at 75.12, 1.45
off the high and 0.02 up from the low.
May Pork Bellies closed down 0.17 at 81.17. This
was 0.52 up from the low and 1.32 off the high.
June hogs closed sharply lower on the session and
to the lowest close of the year with a bearish trend in the cash market (down
another $1.00 this morning) and talk of a cut-back in the slaughter pace due to
poor margins helped pressure. With weights already high, a packer-induced
cut-back in slaughter could cause some hogs to back-up in the country which is
seen as bearish. The CME 2-Day lean Index for the period ending May 5th came in
at 77.26 which was up.92 from the previous session and up from 71.45 the
previous week. Slaughter came in at 369,000 head as compared with trade
expectations of 365,000-375,000 head.
Technical Outlook
HOGS (JUN) 05/10/2005: Momentum studies trending
lower at mid-range should accelerate a move lower if support levels are taken
out. The close below the 18-day moving average is an indication the longer-term
trend has turned down. There could be some early pressure today given the
market’s negative setup with the close below the 2nd swing support. The next
downside objective is 74.020. The next area of resistance is around 75.850 and
76.950, while 1st support hits today at 74.400 and below there at 74.020.
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COCOA MARKET RECAP
5/9/2005
July Cocoa finished up 5 at 1489, 5 off the high
and 13 up from the low.
Following the sharp reversal last Friday and the
hints of some political conflict at the Ivory Coast (with respect to the
disarmament date) it was not surprising that buyers controlled cocoa prices on
Monday. If it were not for the ongoing size of the small spec and fund long in
cocoa we would assume that the recent spike low was a critical low but we still
can’t rule out additional stop loss selling by the spec accounts in the event
that chart support levels are violated. However, as the market moves toward
critical dates in the Ivory Coast Peace process we suspect that sellers will be
a little less comfortable in pressing prices so close to size month lows on the
charts.
Technical Outlook
COCOA (JUL) 05/10/2005: 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 close
over the pivot swing is a somewhat positive setup. The near-term upside
objective is at 1505. The next area of resistance is around 1498 and 1505, while
1st support hits today at 1480 and below there at 1469.
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COFFEE MARKET RECAP
5/9/2005
July Coffee closed down 0.55 at 123.95. This was
0.45 up from the low and 2.35 off the high.
The coffee market appeared to start the week out
with an attempt to rally but failed to hold the gains and would appear to be
vulnerable to more selling ahead. While the market sees the Brazilian crop
tracking toward harvest it is probably a little early to be looking for frost
advisories. However, given that the frost period looms ahead we suspect that
hard breaks in prices will bring on renewed spec buying interest for that June
and July volatility window. It would seem that the funds are the main buyers
with the commercial players on the sidelines and the origins interested in
selling into minor weakness. With the small spec and fund long position still
rather significant one should not discount the importance of falling below the
125.00 level basis the July contract.
Technical Outlook
COFFEE (JUL) 05/10/2005: Stochastics trending
lower at midrange will tend to reinforce a move lower especially if support
levels are taken out. The market back below the 18-day moving average suggests
the longer-term trend could be turning down. The downside closing price reversal
on the daily chart is somewhat negative. With the close higher than the pivot
swing number, the market is in a slightly bullish posture. The next downside
target is now at 121.65. The next area of resistance is around 125.35 and
127.20, while 1st support hits today at 122.60 and below there at 121.65.
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SUGAR MARKET RECAP
5/9/2005
July Sugar closed down 0.06 at 8.36. This was
0.04 up from the low and 0.12 off the high.
The sugar market managed an early rally but after
filling a key overhead gap on the charts the market fell back into last week’s
lower trading range. According to Press reports trade buying stepped up to
support the early rally but apparently spec players were unwilling to sustain
the gains. For the position players in sugar, the action Monday in sugar would
seem to be disappointing, as a gradual improvement in the macro economic outlook
hasn’t provided sugar with the usual lift. However, with the recent COT report
showing the small spec and fund positioning in the sugar to be long only 4,000
contracts as of last Tuesday it wouldn’t take much of a slide in prices to bring
the spec long down to a fully liquidated standing. A Wall Street Journal article
on US Sugar is insignificant because it fails to impact the more important
international price of sugar.
Technical Outlook
SUGAR (JUL) 05/10/2005: 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 market could take on a defensive
posture with the daily closing price reversal down. The market tilt is slightly
negative with the close under the pivot. The next downside objective is now at
8.22. The next area of resistance is around 8.43 and 8.53, while 1st support
hits today at 8.28 and below there at 8.22.
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COTTON MARKET RECAP
5/9/2005
July Cotton finished up 1.52 at 55.01, 0.19 off
the high and 1.51 up from the low.
A sharp upward extension would seem to turn the
tide on the bears as cotton has apparently come back into the favor of the specs
players. However, given that the recent small spec and fund reading in the COT
was still moderately long, we have to think that this market will become
overbought rather quickly. The Press did note trade buying and that could be
because of the huge cotton sales to China last week and the buying could also be
coming off the ultra wet conditions in California production regions. In general
the trend in cotton seems to be pointing up and with some weather uncertainty it
is possible that the bulls continue to control.
Technical Outlook
COTTON (JUL) 05/10/2005: The cross over and close
above the 40-day moving average is an indication the longer-term trend has
turned positive. Stochastics trending lower at midrange will tend to reinforce a
move lower especially if support levels are taken out. The major trend could be
turning up with the close back above the 18-day moving average. 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 downside
objective is now at 52.98. The next area of resistance is around 55.86 and
56.38, while 1st support hits today at 54.16 and below there at 52.98.