This Is What Provided Some Support To The Market Today
BOND MARKET RECAP
12/7/2004
March Bonds closed up 0-06 at 111-22. This was
0-14 up from the low and 0-03 off the high.
March 10 Yr Treasury Notes finished unchanged at
112-090, 0-020 off the high and 0-050 up from the low.
Once again the Treasury market saw
countervailing developments with the Challenger Layoff report showing a 2.5%
increase and the productivity readings seeing a slight softening. Historically
the market has thought that high productivity readings enabled the Fed to leave
interest rates lower for a longer period of time because productivity is
supposed to deflect job growth. We also have to think that the Treasury market
saw the steep slide in energy prices as a slight negative as crude oil prices
reached the lowest level in three months and that is thought to be taking some
of the pressure off the consumer.
Technical Outlook
BONDS (MAR) 12/08/2004: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The close above the 9-day moving average is a positive
short-term indicator for trend. With the close higher than the pivot swing
number, the market is in a slightly bullish posture. The next upside target is
112-04. The next area of resistance is around 111-31 and 112-04, while 1st
support hits today at 111-15 and below there at 111-03.
TNOTES (MAR) 12/08/2004: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
market’s short-term trend is positive on the close above the 9-day moving
average. The market has a slightly positive tilt with the close over the swing
pivot. The near-term upside objective is at 111-305. The next area of resistance
is around 111-270 and 111-305, while 1st support hits today at 111-180 and below
there at 111-120.
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STOCK INDICES RECAP
12/7/2004
December S&P finished down 11.7 at 1177.5, 15.3
off the high and 0.3 up from the low.
December S&P E-Mini closed down 12 at 1177.25.
This was 0.25 up from the low and 16.25 off the high.
December Dow closed down 90 at 10459. This was 5
up from the low and 116 off the high.
December Dow E-Mini finished down 91 at 10452,
123 off the high and 5 up from the low.
Failure to hold above consolidation support on
the charts, seemed to extend the mid session weakness in stocks and after the
rather discouraging early scheduled economic reports from the US it’s
understandable that the bears managed to push prices down. However, fund buyers
continue to show interest in picking up values on weakness and that should at
least discourage the market from seeing a panic type washout. Providing some
support to equity prices Tuesday were significant declines in energy prices and
talk that the Iraqi elections would remain situated in January.
Technical Outlook
S&P 500 (DEC) 12/08/2004: Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The close
below the 9-day moving average is a negative short-term 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 objective is now at
1165.65. The next area of resistance is around 1185.30 and 1196.84, while 1st
support hits today at 1169.70 and below there at 1165.65.
SP EMINI (DEC) 12/08/2004: 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. The outside day down is a negative signal. The defensive
setup, with the close under the 2nd swing support, could cause some early
weakness. The next downside target is 1164.75. The next area of resistance is
around 1185.50 and 1197.75, while 1st support hits today at 1169.00 and below
there at 1164.75.
NASDAQ (DEC) 12/08/2004: Momentum studies are
trending lower from high levels which should accelerate a move lower on a break
below the 1st swing support. The close below the 9-day moving average is a
negative short-term indicator for trend. The outside day down and close below
the previous day’s low is a negative signal. The defensive setup, with the close
under the 2nd swing support, could cause some early weakness. The next downside
objective is now at 1564.50. The next area of resistance is around 1611.00 and
1638.50, while 1st support hits today at 1574.00 and below there at 1564.50.
MINIDOW (DEC) 12/08/2004: The downside crossover
of the 9 & 18 bar moving average is a negative signal. 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. The defensive setup, with the close under the 2nd swing
support, could cause some early weakness. The next downside target is 10353. The
next area of resistance is around 10515 and 10609, while 1st support hits today
at 10387 and below there at 10353.
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CURRENCY MARKET RECAP
12/7/2004
December US Dollar finished down 6 at 8126, 14
off the high and 31 up from the low.
December Euro finished up 0.09 at 134.29, 0.39
off the high and 0.14 up from the low.
December Euro Dollar closed unchanged at 97.535.
This was 0.005 up from the low and 0.0025 off the high.
December Canadian Dollar closed down 0.4 at
82.82. This was 0.27 up from the low and 0.91 off the high.
December British Pound finished up 0.49 at
194.53, 0.34 off the high and 0.48 up from the low.
December Swiss closed down 0.05 at 87.71. This
was 0.08 up from the low and 0.44 off the high.
December Japanese Yen closed up 0.23 at 97.22.
This was 0.08 up from the low and 0.33 off the high.
The Dollar showed the ability to recoil away from
some early weakness and might have accomplished that off and downside extension
in the Canadian Dollar. While US economic information was weak enough to press
the Dollar down to a new low it would seem that concern for inflation in
Canadian was seen as a more important development. It is also possible that the
Dollar saw some support off the idea that Iraqi elections were probably going to
go forward and that could be seen as an exit for the US. Bush indicated Tuesday
that elections in Iraq will end the myth of foreign occupation.
Technical Outlook
YEN (DEC) 12/08/2004: Momentum studies are
trending lower from high levels which should accelerate a move lower on a break
below the 1st swing support. A negative signal for trend short-term was given on
a close under the 9-bar moving average. The market has a slightly positive tilt
with the close over the swing pivot. The next downside objective is 96.88. The
next area of resistance is around 97.42 and 97.69, while 1st support hits today
at 97.02 and below there at 96.88.
EURO (DEC) 12/08/2004: The market made a new
contract high on the rally. Stochastics turning bearish at overbought levels
will tend to support lower prices if support levels are broken. The market’s
short-term trend is positive on the close above the 9-day moving average. It is
a mildly bullish indicator that the market closed over the pivot swing number.
The next downside objective is now at 133.83. With a reading over 70, the 9-day
RSI is approaching overbought levels. The next area of resistance is around
134.55 and 134.88, while 1st support hits today at 134.03 and below there at
133.83.
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PRECIOUS METALS RECAP
12/7/2004
February Gold closed down 2.2 at 453.7. This was
0.5 up from the low and 3.2 off the high.
March Silver finished down 0.078 at 7.885, 0.06
off the high and 0.025 up from the low.
January Platinum closed down 6.7 at 871. This was
3 up from the low and 1 off the high.
The metals markets came under across the board
selling pressure as the Dollar probed down to new lows but then managed to
recovery. With the Canadian making a critical downside breakout on the charts
there would seem to be at least one technical change taking place with respect
to the Dollar. We also think that excessive spec and fund long positioning in
silver could have kicked off sell stops and with the entire complex weak it
would seem like the short term trend has turned down.
Technical Outlook
SILVER (MAR) 12/08/2004: Stochastics trending
lower at midrange will tend to reinforce a move lower especially if support
levels are taken out. The market’s close above the 9-day moving average suggests
the short-term trend remains positive. The market setup is somewhat negative
with the close under the 1st swing support. The next downside objective is
780.9. The next area of resistance is around 792.8 and 797.9, while 1st support
hits today at 784.3 and below there at 780.9.
GOLD (FEB) 12/08/2004: 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’s short-term
trend is negative as the close remains below the 9-day moving average. The
market could take on a defensive posture with the daily closing price reversal
down. The swing indicator gave a moderately negative reading with the close
below the 1st support number. The next downside target is now at 450.7. Daily
studies pointing down suggests selling minor rallies. The next area of
resistance is around 455.5 and 458.0, while 1st support hits today at 451.9 and
below there at 450.7.
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COPPER MARKET RECAP
12/7/2004
March Copper finished down 3.25 at 135.20, 4.30
off the high and 1.10 up from the low.
The copper market mounted a disappointing
performance Tuesday and seemed to be pulled down by weakness in the precious
metals markets. The US economic information was negative but German economic
numbers were positive and energy prices declined sharply and that usually
provides support to copper. However, copper even failed to hold support despite
talk of a possible strike in Peru. A minor rise in LME copper stocks was a
negative prior to the opening but the break Tuesday appeared to be something
more than simple technical liquidation. In the big picture the trend is up but
Chinese absence and year end book squaring seems to be pushing longs out of
position.
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ENERGY MARKET RECAP
12/7/2004
March Crude Oil closed down 1.43 at 41.81. This
was 0.11 up from the low and 1.08 off the high.
March Heating Oil closed down 2.51 at 123.07.
This was 0.57 up from the low and 1.73 off the high.
March Unleaded Gas finished down 3.99 at 111.52,
2.78 off the high and 0.42 up from the low.
March Natural Gas finished down 0.28 at 6.76,
0.27 off the high and 0.03 up from the low.
March Propane closed down 0.02 at 0.74. This was
0.00 up from the low and equal to the high.
The energy complex continued to weaken Tuesday
with most traders thinking that the Wednesday morning inventory report was set
to post another build. However, we see a slow tide change coming with the UAE
Oil Minister suggesting that even lower prices ahead should result in a
production cut. Some crude oil measures fell to the lowest level since early
September in the decline Tuesday morning. During the session Tuesday the Press
was already reporting that a Senior OPEC delegate was set to discuss the price
decline and that strongly hints at some type of action. The EIA moved to lower
their winter price projections but suggested that 4th quarter oil demand would
rise by 100,000 barrels per day and that natural gas demand would rise 3.7% in
2005.
Technical Outlook
CRUDE OIL (FEB) 12/08/2004: 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. More selling pressure is likely given yesterday’s gap lower
price action on the day session chart. The close below the 2nd swing support
number puts the market on the defensive. The next downside objective is 40.87.
The 9-day RSI under 30 indicates the market is approaching oversold levels. The
next area of resistance is around 42.40 and 43.24, while 1st support hits today
at 41.22 and below there at 40.87.
UNLEADED (FEB) 12/08/2004: 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 down on the day session chart is bearish with more
selling pressure possible today. The close below the 2nd swing support number
puts the market on the defensive. The next downside objective is 108.91. The
market is approaching oversold levels on an RSI reading under 30. The next area
of resistance is around 113.12 and 115.31, while 1st support hits today at
109.92 and below there at 108.91.
HEATING OIL (FEB) 12/08/2004: Daily stochastics
are trending lower but have declined into oversold territory. 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 defensive setup, with the close under the 2nd swing
support, could cause some early weakness. The next downside objective is 121.06.
With a reading under 30, the 9-day RSI is approaching oversold levels. The next
area of resistance is around 124.22 and 125.66, while 1st support hits today at
121.92 and below there at 121.06.
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CORN MARKET RECAP
12/7/2004
December Corn finished down 4 at 193 3/4, 4
1/2 off the high and 1 3/4 up from the low. March Corn closed down 5 3/4 at 203
1/4. This was 1 1/4 up from the low and 5 1/2 off the high.
12/7/2004 A lack of follow-through fund
short-covering on the upside combined with a lack of commercial buying interest
on the early break below Monday’s lows to leave the market with a much weaker
technical view. The 3-day bounce off of a contract low in the high on Monday
seems to have supported an increase in speculative selling on hopes that the
recent bounced helped alleviate some of the near record oversold small spec and
fund condition. With a massive US crop to absorb and a weak recent export sales
pace, the market has been left with a bearish supply/demand outlook. The
Supply/demand report on Friday could slow a slight revision lower for corn
exports due to recent export activity from China and a possible revision higher
in China production. If so, the ending stocks forecast may be adjusted higher.
Traders are looking for about a 39 to 41 million bushel increase in ending
stocks from last months figure, which would then be added to the 1.819 billion
bushel reading from last month. After several days absent, fund selling is more
active today. Resistance for March Corn comes in at 208 3/4 and 210 3/4 with
support at 205 1/2 and 204 1/2.
Technical Outlook
CORN (MAR) 12/08/2004: The market broke to a new
contract low. Rising from oversold levels, daily momentum studies would support
higher prices, especially on a close above resistance. The market’s short-term
trend is negative as the close remains below the 9-day moving average. The
market is in a bearish position with the close below the 2nd swing support
number. The next upside objective is 211. The next area of resistance is around
206 1/2 and 211, while 1st support hits today at 200 and below there at 197 3/4.
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SOY COMPLEX RECAP
12/7/2004
January Soybeans finished down 7 3/4 at 522, 9
1/2 off the high and 1/2 up from the low. March Soybeans closed down 9 at 525.
This was 1 up from the low and 9 1/2 off the high.
January Soymeal closed down 2.4 at 156.0. This
was 0.3 up from the low and 3.0 off the high.
January Soybean Oil finished down 0.26 at 19.92,
0.3 off the high and 0.02 up from the low.
The early bounce was met with speculative selling
interest and the lack of commercial buying support allowed for a quick drop
below yesterday’s lows. Favorable weather for the start of the South American
crop has allowed commercial buyers to take a wait and see attitude towards new
purchases and a lack of new news from China, the primary buyer recently, has
left the market without short-term commercial support. Ideas that the 2-day
spurt of nearly 14 cents was enough to alleviate some of the oversold technical
condition added to the weakened posture of the market today. While the talk of a
slowdown in the crush pace has supported the products recently, the news is seen
as a bearish force for soybeans. Taiwan announced a tender to buy 33,000-60,000
tonnes of US soybeans. There were no deliveries for oil and just 3 for meal. For
Friday’s USDA supply/demand report, a Reuter’s survey showed an average trade
estimate for the 2004/2005 ending stocks at 478 million bushels as compared with
460 million last month. Resistance for January soybeans comes in at 531 1/2 and
536 with support at 521 and 514 3/4.
Technical Outlook
BEANS (JAN) 12/08/2004: Momentum studies are
declining, but have fallen to oversold levels. The market’s close below the
9-day moving average is an indication the short-term trend remains negative. The
market is in a bearish position with the close below the 2nd swing support
number. The next downside objective is 514 1/4. The next area of resistance is
around 527 and 534 1/4, while 1st support hits today at 517 and below there at
514 1/4.
MEAL (JAN) 12/08/2004: A negative indicator was
given with the downside crossover of the 9 & 18 bar moving average. Stochastics
trending lower at midrange will tend to reinforce a move lower especially if
support levels are taken out. The close below the 9-day moving average is a
negative short-term indicator for trend. The outside day down is a negative
signal. The close below the 2nd swing support number puts the market on the
defensive. The next downside target is 152.8. The next area of resistance is
around 158.2 and 161.1, while 1st support hits today at 154.0 and below there at
152.8.
BEANOIL (JAN) 12/08/2004: 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’s close below the
1st swing support number suggests a moderately negative setup for today. The
next downside target is now at 19.56. The next area of resistance is around
20.07 and 20.37, while 1st support hits today at 19.67 and below there at 19.56.
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WHEAT MARKET RECAP
12/7/2004
December Wheat finished down 6 at 287, 5 1/2 off the high and
1 1/4 up from the low. March Wheat closed down 6 1/2 at 299. This was 1 up from
the low and 5 off the high.
Funds were noted sellers of near 3000 contracts
into the mid-session and the lack of commercial buyers left the market in a long
liquidation mode. Fears of continued hefty supply to work through on the world
market and the lack of commercial support triggered the quick 4 1/2 cent break
after the opening. Israel issued a tender to buy 25,000 tons of feed wheat and
other export news is quiet. Stats Canada will release crop production forecasts
for the summer crop with the all-wheat average trade estimate at 20.6 million
tonnes from 20.78 million tonnes as last months forecast. The smaller crop, and
news that a large portion of the crop will not grade out as higher quality, has
provided recent support. Jordan issued a tender to buy 100,000 tons of hard
wheat. Similar to the other grains, fund sellers are mare active sellers and
commercial buyers seem to be on the sidelines. For Friday’s USDA supply/demand
report, a Reuter’s survey showed an average trade estimate for the 2004/2005
ending stocks at 551 million bushels as compared with 568 million last month.
Resistance for March wheat comes in at 304 and 308 3/4 with 297 and 295 as
support.
Technical Outlook
WHEAT (MAR) 12/08/2004: Rising from oversold
levels, daily momentum studies would support higher prices, especially on a
close above resistance. A negative signal for trend short-term was given on a
close under the 9-bar moving average. The gap down on the day session chart is
bearish with more selling pressure possible today. The close below the 2nd swing
support number puts the market on the defensive. The near-term upside objective
is at 306. The next area of resistance is around 302 and 306, while 1st support
hits today at 296 and below there at 294.
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LIVE CATTLE RECAP
12/7/2004
February Live Cattle closed down 0.65 at 87.25.
This was 0.50 up from the low and 0.65 off the high.
January Feeder Cattle finished down 0.37 at
101.02, 0.62 off the high and 0.17 up from the low.
February cattle pushed sharply lower early into
the mid-session and moved under 87.00 for the third session in a row but bounced
late in the day. Long liquidation selling has been a constant this week with
fear of weaker beef prices and improving weather for feedlot performance seen as
bearish factors. Traders await cash market news this week with packer bids
coming in near $82.00 and offers at $90.00 as compared with cash trade last week
at $90.00. Traders expect cash to trade near $88-89 this week. The Canadian
ambassador to the US on Tuesday indicated that exports of some Canadian cattle
under 30 months old are likely to flow by the spring. Boxed-beef cut-out values
at mid-session were up 52 cents to $148.30 as compared with 145.23 last week at
this time.
Technical Outlook
CATTLE (FEB) 12/08/2004: Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The close
below the 9-day moving average is a negative short-term indicator for trend. The
market setup is somewhat negative with the close under the 1st swing support.
The next downside target is now at 86.150. The next area of resistance is around
87.800 and 88.420, while 1st support hits today at 86.670 and below there at
86.150.
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LEAN HOGS RECAP
12/7/2004
February Lean Hogs closed down 0.95 at 72.37.
This was 0.12 up from the low and 1.57 off the high.
February Pork Bellies finished up 0.65 at 97.50,
0.40 off the high and 2.00 up from the low.
February hogs pushed moderately lower on the
session with follow-through technical selling after yesterday’s collapse helping
to drive the market to the lowest level since November 10th. Fund long
liquidation selling was active for the second day in a row. Lower trade in the
live cash hog market and expectations for a significant drop in pork product
prices in the weeks just ahead led by the ham market helped to pressure futures.
The CME 2-day lean index for the period ending December 3rd was reported at
81.00, up $1.11 on the session and up from 77.38 last week at this time. This
leaves February hogs at an 850 point discount to the cash market as compared
with a typical premium of 200-400 points at this time of the year.
Technical Outlook
HOGS (FEB) 12/08/2004: Stochastics trending lower
at midrange will tend to reinforce a move lower especially if support levels are
taken out. The close below the 9-day moving average is a negative short-term
indicator for trend. The close below the 1st swing support could weigh on the
market. The next downside target is now at 71.050. The next area of resistance
is around 73.200 and 74.420, while 1st support hits today at 71.520 and below
there at 71.050.
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COCOA MARKET RECAP
12/7/2004
March Cocoa finished down 27 at 1687, 22 off the
high and 2 up from the low.
The cocoa market slipped slightly lower in the
recent range and would seem to be headed back to the gap down at $1,675 basis
the March contract. We have to think that South African Peace efforts are at
least part of the profit taking mentality. As suggested yesterday it would seem
like the cocoa market is moving to weaker hands as the specs have been the
buyers over the last two sessions and the origin and commercial players seem to
be the sellers. A failure to follow through on the downside in the Dollar might
have prompted some arbitrage selling of US cocoa.
Technical Outlook
COCOA (MAR) 12/08/2004: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. A positive signal for trend short-term was given on a close over
the 9-bar moving average. The market setup is somewhat negative with the close
under the 1st swing support. The near-term upside target is at 1716. The next
area of resistance is around 1699 and 1716, while 1st support hits today at 1675
and below there at 1668.
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COFFEE MARKET RECAP
12/7/2004
March Coffee closed down 0.25 at 97.40. This was
1.30 up from the low and 0.10 off the high.
Given the historic net long of the fund traders,
it is surprising that March coffee was able to see a sharp rebound off the day’s
lows to cut losses to only 25 points. Overall, March coffee is still hemmed in a
range ahead of the Brazil’s government 2005/06 crop production estimate released
late Friday. However, reports that Brazil exported 23% more coffee in November
than a year ago likely weighed on the market. While producer selling has been
light, providing little resistance to fund buying, producers are likely become
more aggressive sellers once the government’s crop production estimate is known.
March coffee is likely to work sideways to lower ahead of Friday’s report with
support at 96 then 95.
Technical Outlook
COFFEE (MAR) 12/08/2004: 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’s
short-term trend is positive on the close above the 9-day moving average. It is
a slightly negative indicator that the close was under the swing pivot. The next
downside target is now at 95.75. The next area of resistance is around 98.10 and
98.50, while 1st support hits today at 96.75 and below there at 95.75.
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SUGAR MARKET RECAP
12/7/2004
March Sugar closed down 0.16 at 8.70. This was
0.01 up from the low and 0.19 off the high.
Speculative long liquidation pushed March sugar
sharply lower Tuesday with the market unable to hold support at 880. The While
below an historical extreme, the latest COT report with options showed fund
traders were holding a net long position of 95,716 contracts which is high and
put the market in a vulnerable position for profit taking. Despite expectations
of a supply deficit in 2004/05, high freight rates and high sugar prices have
kept cash buyers sidelined so the market lacked near-term fundamental support. A
break under 866 for March sugar would put the next downside target at 850.
Technical Outlook
SUGAR (MAR) 12/08/2004: The close under the
40-day moving average indicates the longer-term trend could be turning down.
Stochastics trending lower at midrange will tend to reinforce a move lower
especially if support levels are taken out. The close below the 9-day moving
average is a negative short-term indicator for trend. A negative signal was
given by the outside day 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 target is 8.55. The next area of resistance is around 8.80 and 8.94,
while 1st support hits today at 8.60 and below there at 8.55.
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COTTON MARKET RECAP
12/7/2004
March Cotton finished up 0.66 at 43.19, 0.01 off
the high and 0.74 up from the low.
March cotton saw follow through gains Tuesday as
the bullish key reversal action Monday looks to have attracted some near-term
short covering. Reports of merchant buying would suggest weekly export sales
number could be strong or above expectations. China left import quotas unchanged
for 2005 vs 2004 at 4.1 million bales, however, the quota could be expanded as
the year progresses. Despite the improved technical action, a major reversal in
market trend seems unlikely at this time since the market is has to contend with
a huge world cotton supply outlook. March cotton has near-term resistance at
43.25 to 43.30.
Technical Outlook
COTTON (MAR) 12/08/2004: 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. Market positioning is positive with the close over the
1st swing resistance. The next downside target is 42.26. The next area of
resistance is around 43.56 and 43.75, while 1st support hits today at 42.82 and
below there at 42.26.