This Is What The Fed Move Today Confirmed
BOND MARKET RECAP
12/14/2004
March Bonds closed up 0-11 at 113-06. This was
0-24 up from the low and 0-03 off the high.
March 10 Yr Treasury Notes finished up 0-035 at
113-020, 0-010 off the high and 0-105 up from the low.
The Treasury market forged moderately
surprising early weakness and did so off a disconcerting US Trade data. The rest
of the information released during the session was mixed with the Industrial
Production reaching expectations and the Capacity Utilization coming in softer
than expectations. Even the Richmond Fed data was mixed with the overall index
soft, employment improved and service sector revenues rising. The FOMC meeting
result was as expected with the Fed hiking rates by 25 basis points and by most
accounts the statement offered little in the of a surprise. The Fed did suggest
that inflation remained under control and that seemed to give the Treasury
market a slight lift.
Technical Outlook
BONDS (MAR) 12/15/2004: The upside crossover of
the 9 & 18 bar moving average is a positive signal. Momentum studies are
trending higher but have entered overbought levels. The market’s close above the
9-day moving average suggests the short-term trend remains positive. The upside
daily closing price reversal gives the market a bullish tilt. The market setup
is supportive for early gains with the close over the 1st swing resistance. The
near-term upside objective is at 113-29. The next area of resistance is around
113-21 and 113-29, while 1st support hits today at 112-26 and below there at
112-06.
TNOTES (MAR) 12/15/2004: Rising stochastics at
overbought levels warrant some caution for bulls. The close above the 9-day
moving average is a positive short-term indicator for trend. 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 upside
objective is 112-315. The next area of resistance is around 112-265 and 112-315,
while 1st support hits today at 112-115 and below there at 112-010.
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STOCK INDICES RECAP
12/14/2004
March S&P finished up 4 at 1206.5, 1.7 off the
high and 6 up from the low.
March S&P E-Mini closed up 4 at 1206.5. This was
7.25 up from the low and 1.75 off the high.
March Dow closed up 30 at 10687. This was 57 up
from the low and 18 off the high.
March Dow E-Mini finished up 30 at 10687, 19 off
the high and 56 up from the low.
The stock market showed trade on both sides of
unchanged Tuesday and saw justification for the overall lack of direction in
economic numbers that were mostly mixed. With the FOMC actually raising rates 25
basis points and suggesting that inflation is well contained the market was
assured that current favorable conditions could extend into the future. The Fed
also confirmed that the US economy continues to grow at a good pace and that
energy prices aren’t likely to derail the recovery. The Fed also confirmed that
they would continue to raise rates in a measured manner and that also gave the
market confidence that the recovery would be allowed to extend.
Technical Outlook
S&P 500 (MAR) 12/15/2004: A new contract high was
made on the rally. 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 close over the pivot swing is a somewhat positive
setup. The near-term upside objective is at 1213.12. The market is becoming
somewhat overbought now that the RSI is over 70. The next area of resistance is
around 1210.34 and 1213.12, while 1st support hits today at 1202.65 and below
there at 1197.73.
SP EMINI (MAR) 12/15/2004: 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 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 upside target is 1214.12. The
market is becoming somewhat overbought now that the RSI is over 70. The next
area of resistance is around 1211.00 and 1214.12, while 1st support hits today
at 1202.00 and below there at 1196.13.
NASDAQ (MAR) 12/15/2004: The market made a new
contract high on the rally. Daily stochastics have risen into overbought
territory which will tend to support reversal action if it occurs. The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The market has a slightly positive tilt with the close over the swing
pivot. The near-term upside objective is at 1649.75. The market is becoming
somewhat overbought now that the RSI is over 70. The next area of resistance is
around 1642.50 and 1649.75, while 1st support hits today at 1627.50 and below
there at 1619.75.
MINIDOW (MAR) 12/15/2004: The market made a new
contract high on the rally. Momentum studies are trending higher but have
entered overbought levels. 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 near-term upside objective is at
10751. The market is becoming somewhat overbought now that the RSI is over 70.
The next area of resistance is around 10721 and 10751, while 1st support hits
today at 10647 and below there at 10602.
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CURRENCY MARKET RECAP
12/14/2004
March US Dollar finished up 21 at 8244, 24 off
the high and 29 up from the low.
March Euro finished down 0.21 at 133.13, 0.32 off
the high and 0.44 up from the low.
March Euro Dollar closed unchanged at 97.12. This
was 0.025 up from the low and 0.005 off the high.
March Canadian Dollar closed down 0.48 at 80.97.
This was 0.42 up from the low and 0.36 off the high.
March British Pound finished up 0.1 at 191.73,
0.17 off the high and 0.68 up from the low.
March Swiss closed down 0.12 at 87.04. This was
0.39 up from the low and 0.16 off the high.
March Japanese Yen closed down 0.77 at 95.37.
This was 0.26 up from the low and 0.63 off the high.
The Dollar started out slightly lower but then
managed to forge minor gains in the face of a much bigger than expected US
October Trade surplus. Early in the session the market was throwing around
rumors of Chinese Central Bank Intervention but that focus quickly gave way to
the FOMC meeting result. Since the market widely anticipated the rate hike it is
not surprising that the Dollar failed to move much following the Fed Statement.
Traders are now noting that the Canadian and the Yen are showing significant
technical failures on the charts and with the Trade surplus in Canada shrinking
aggressively it is clear that the exchange rate is showing signs of influencing
trade between the two countries.
Technical Outlook
YEN (MAR) 12/15/2004: The major trend has turned
down with the cross over back below the 40-day moving average. 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. 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 94.58. The next area of resistance is around 95.81 and 96.35, while 1st
support hits today at 94.93 and below there at 94.58.
EURO (MAR) 12/15/2004: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. A negative signal
for trend short-term was given on a close under the 9-bar moving average. The
downside closing price reversal on the daily chart is somewhat negative. It is a
slightly negative indicator that the close was lower than the pivot swing
number. The next downside objective is now at 132.34. The next area of
resistance is around 133.51 and 133.86, while 1st support hits today at 132.75
and below there at 132.34.
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PRECIOUS METALS RECAP
12/14/2004
February Gold closed down 3 at 437.3. This was
0.8 up from the low and 2.4 off the high.
March Silver finished down 0.075 at 6.755, 0.075
off the high and 0.075 up from the low.
January Platinum closed down 0.8 at 830.4. This
was 1.4 up from the low and 3.6 off the high.
The gold market slid under the weight of a
surprising rise in the Dollar and since the Dollar gained in the face of another
big jump in the US Trade Deficit, the gold bulls are even more discouraged.
Seeing the Dollar recover and the US stock market choppy seemed to facilitate
liquidation in gold and silver. With both gold and silver still holding a
massive spec and fund long the violation of chart support levels should not be
discounted.
Technical Outlook
SILVER (MAR) 12/15/2004: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative. It is a slightly negative indicator that the close was
lower than the pivot swing number. The next downside objective is 660.5. With a
reading under 30, the 9-day RSI is approaching oversold levels. The next area of
resistance is around 683.0 and 690.5, while 1st support hits today at 668.1 and
below there at 660.5.
GOLD (FEB) 12/15/2004: The close below the 40-day
moving average is an indication the longer-term trend has turned down. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The close below the 9-day moving average is a negative short-term
indicator for trend. The swing indicator gave a moderately negative reading with
the close below the 1st support number. The next downside objective is now at
434.5. The next area of resistance is around 438.9 and 440.9, while 1st support
hits today at 435.7 and below there at 434.5.
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COPPER MARKET RECAP
12/14/2004
March Copper finished up 0.75 at 136.40, 0.80 off
the high and 0.90 up from the low.
The copper market bucked the weakness seen in
most of the metals markets on Tuesday, as it managed to forge a higher close.
The copper market was partially supported by the favorable Industrial Production
gain but wasn’t sure how to handle news that US copper exports increased by 296%
in October, while imports declined by 19.8%. However, in the face of another US
interest rate hike we suspect that copper is feeling a slightly negative macro
economic drag.
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ENERGY MARKET RECAP
12/14/2004
February Crude Oil closed up 0.62 at 42.45. This
was 0.75 up from the low and 0.04 off the high.
February Heating Oil closed up 3.87 at 130.86.
This was 2.86 up from the low and 0.84 off the high.
February Unleaded Gas finished up 0.89 at 114.27,
0.23 off the high and 1.97 up from the low.
February Natural Gas finished up 0.16 at 7.46,
0.02 off the high and 0.24 up from the low.
January Propane closed up 0.01 at 0.77. This was
equal to the low and equal to the high.
The energy complex managed to post some sizeable
gains in the product markets and seemed to be feeding mostly off the expectation
for cold weather. Dampening the upside tilt in crude oil were concerns that the
Wednesday morning inventory reports would bring about another increase in crude
stocks. However, the Saudi’s seemed to be calling for other OPEC members to
follow with production cuts of their own. Qatar suggested that they might be
prepared to cut production by 40,000 barrels in January and therefore the market
was seeing some support from the prospect of lower supply.
Technical Outlook
CRUDE OIL (FEB) 12/15/2004: 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. With the close over the 1st swing resistance number, the market
is in a moderately positive position. The next downside objective is 41.49. The
next area of resistance is around 42.84 and 43.06, while 1st support hits today
at 42.06 and below there at 41.49.
UNLEADED (FEB) 12/15/2004: The daily stochastics
gave a bullish indicator with a crossover up. 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 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 target is at 116.03. The next area of resistance is around
115.36 and 116.03, while 1st support hits today at 113.17 and below there at
111.64.
HEATING OIL (FEB) 12/15/2004: The daily
stochastics gave a bullish indicator with a crossover up. The stochastic
indicator is rising from oversold levels, which is bullish and should support
higher prices. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. The market’s close above the 2nd swing
resistance number is a bullish indication. The next upside objective is 134.05.
The next area of resistance is around 132.71 and 134.05, while 1st support hits
today at 129.01 and below there at 126.66.
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CORN MARKET RECAP
12/14/2004
March Corn finished up 1 1/4 at 206, 1/4
off the high and 2 1/4 up from the low. May Corn closed up 1 1/4 at 213 3/4.
This was 2 1/4 up from the low and 1/4 off the high.
The highest close since December 6th combined
with the massive net short position of the speculator could attract more
short-covering into late December. The overnight news of China selling 100,000
tons of corn to South Korea and news of increased US producer selling is not the
type of new traders would expect to hear if corn prices were near a near-term
low. Export demand news is slow and short-covering from speculators seems to be
the primary supportive news. December futures went off of the board at 195, down
2 1/4 cents on the session. Short-covering, however, could be a major factor
into the end of the year with speculators and fund traders holding a record net
short position. There were only 7 contracts delivered overnight and cash basis
levels are steady in spite of talk of increased movement by producers. Support
for March Corn comes in at 204 and 203 1/2 with resistance at 207 3/4 and 210.
Technical Outlook
CORN (MAR) 12/15/2004: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The market’s close above the 9-day moving average
suggests the short-term trend remains positive. The market has a slightly
positive tilt with the close over the swing pivot. The next upside objective is
208. The next area of resistance is around 207 1/4 and 208, while 1st support
hits today at 204 3/4 and below there at 203.
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SOY COMPLEX RECAP
12/14/2004
January Soybeans finished up 3 1/2 at 550 1/4,
3/4 off the high and 8 1/4 up from the low. March Soybeans closed up 4 at 550.
This was 9 up from the low and 1/2 off the high.
January Soymeal closed down 1.2 at 164.8. This
was 1.3 up from the low and 3.2 off the high.
January Soybean Oil finished up 0.1 at 20.18,
0.02 off the high and 0.23 up from the low.
The market shook off negative demand news from
the morning to close on the highs of the day and at the highest level since
November 26th. December meal opened at the highest level since September 16th
but expired at 166.00, unchanged on the day. December oil went off the board at
20.18, up 10 points on the day. The NOPA monthly crush report this morning came
in at 144.38 million bushels for November as compared with trade expectations of
145-150 million bushels. This news helped trigger some selling as demand for
soybeans has not been as high as expected in spite of the recent drop in prices.
The Brazil Agriculture ministry raised their 2004/2005 soybean crop estimate to
61.4 million tons from 59.5 million as their October forecast. This added to the
bearish tone with talk of more rains in key producing areas into later this week
seen as a bearish development. Basis levels at the gulf are steady to higher on
continued talk of China demand for US soybeans. A pick-up in producer selling in
the country after yesterday’s strong gains helped to pressure the market early
today. December contracts expire at mid-session today. Support for March
soybeans comes in at 547 and 538 with resistance at 557 and 565.
Technical Outlook
BEANS (JAN) 12/15/2004: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The market’s close above the 9-day moving
average suggests the short-term trend remains positive. It is a mildly bullish
indicator that the market closed over the pivot swing number. The next upside
objective is 557 1/4. The next area of resistance is around 554 3/4 and 557 1/4,
while 1st support hits today at 545 3/4 and below there at 539 1/2.
MEAL (JAN) 12/15/2004: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance 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 is a negative indicator for prices. It is a slightly negative
indicator that the close was lower than the pivot swing number. The next upside
objective is 168.2. The next area of resistance is around 165.6 and 168.2, while
1st support hits today at 161.8 and below there at 160.5.
BEANOIL (JAN) 12/15/2004: The daily stochastics
gave a bullish indicator with a crossover up. 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 close above the 9-day moving
average suggests the short-term trend remains positive. The daily closing price
reversal up on the daily chart is somewhat positive. A positive setup occurred
with the close over the 1st swing resistance. The next upside target is 20.79.
Short-term indicators suggest buying pullbacks today. The next area of
resistance is around 20.65 and 20.79, while 1st support hits today at 20.17 and
below there at 19.82.
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WHEAT MARKET RECAP
12/14/2004
March Wheat finished up 2 at 301, 1 off the high and 5 up from
the low. May Wheat closed up 2 1/4 at 308. This was 4 3/4 up from the low and
3/4 off the high.
Trade was very quiet with a weak tone until the
December futures went off of the board at 285, down 1 3/4 on the session.
Selling slowed down on the test of the lows but selling emerged on a minor
bounce into the close. Deliveries were still high at 150 contracts this morning
which kept negative cash tone on the market again today. In addition, weakness
in the other grains and fear that a price rally will slow exports due to stiff
competition on the world market has also been seen as a factor to limit the
upside potential. Talk of weather damage in Australia due to too much rain is
still helping to provide some support but with a record world production
forecast, traders seem less concerned with the development. Taiwan announced a
tender for 86,350 tons of US wheat overnight which helped support the market.
Traders remain hopeful that Pakistan or Iraq could buy more wheat soon. With
funds holding a record net short position, a decision to exit just a part of
this position into the end of the year could provide underlying support as well
if resistance levels are violated. Support for March wheat comes in at 297 1/2
and 295 with 302 and 309 as resistance.
Technical Outlook
WHEAT (MAR) 12/15/2004: 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 short-term trend is positive on
the close above the 9-day moving average. The daily closing price reversal up is
a positive indicator that could support higher prices. The close over the pivot
swing is a somewhat positive setup. The near-term upside target is at 306. The
next area of resistance is around 304 and 306, while 1st support hits today at
298 and below there at 294.
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LIVE CATTLE RECAP
12/14/2004
February Live Cattle closed down 0.92 at 86.52.
This was 0.22 up from the low and 0.82 off the high.
January Feeder Cattle finished down 0.80 at
100.30, 1.10 off the high and 0.10 up from the low.
February cattle closed sharply lower and at the
lowest level since November 22nd as anticipated weakness in the cash market and
continued dry forecasts for the plains helped to pressure. Cash bids in the
plains were at $80-$81 with offers at $85.00 as compared with trade at $85.00
last week. Boxed-beef cut-out values at mid-session were down $.25 to $141.11 as
compared with 147.79 last week at this time. Slaughter came in at 112,000 head
as compared with trade expectations at 120,000-128,000. The lower than expected
slaughter points to weak packer demand.
Technical Outlook
CATTLE (FEB) 12/15/2004: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. 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 now at 85.650. The next
area of resistance is around 87.050 and 87.720, while 1st support hits today at
86.020 and below there at 85.650.
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LEAN HOGS RECAP
12/14/2004
February Lean Hogs closed down 0.92 at 71.25.
This was 0.40 up from the low and 0.70 off the high.
February Pork Bellies finished down 0.60 at
97.50, 0.60 off the high and 0.70 up from the low.
February hogs closed moderately lower on the
session led by weakness in pork product on Monday night and another sharp drop
in the 2-day lean index. Weakness in cattle and a hefty near-term supply of pork
added to the bearish tone. The CME 2-day lean index for the period ending
December 10th was reported at 77.45, down $1.60 on the session and down from
81.25 one week previous. This leaves February hogs at a discount of 620 points
which is down from a discount of near 1000 points last week. However, it is not
uncommon for February hogs to hold a premium to the cash market at this time of
the year. Slaughter came in at 404,000 head as compared with trade expectations
at 399,000-402,000. The higher than expected slaughter for the second day in a
row is a positive force for packer demand but it will be important to see lower
average weights over the near-term to assume that the market is about to shift
to a lower production level for the mid-December to mid-February time frame.
Technical Outlook
HOGS (FEB) 12/15/2004: The close under the 40-day
moving average indicates the longer-term trend could be turning down. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. A negative signal for trend short-term was given on a close under the
9-bar moving average. The swing indicator gave a moderately negative reading
with the close below the 1st support number. The next downside objective is now
at 70.250. The next area of resistance is around 71.770 and 72.400, while 1st
support hits today at 70.720 and below there at 70.250.
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COCOA MARKET RECAP
12/14/2004
March Cocoa finished down 9 at 1598, 21 off the
high and 6 up from the low.
The cocoa market attempted to rally off early
trade and fund buying but could not find the resolve to hold the gains into the
close. The trade noted a lack of dominating items and mostly discounted the news
that October cocoa imports were down 24%. We have to think that the rise in the
Dollar discouraged buyers from the US cocoa market but in a lackluster session
even minor influences can serve to drive prices around.
Technical Outlook
COCOA (MAR) 12/15/2004: 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 slightly negative indicator that the close was lower
than the pivot swing number. The next downside target is 1575. The next area of
resistance is around 1611 and 1628, while 1st support hits today at 1585 and
below there at 1575.
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COFFEE MARKET RECAP
12/14/2004
March Coffee closed up 0.15 at 94.05. This was
1.05 up from the low and 0.95 off the high.
The coffee market continues to fail as more and
more specs are pushed out. Brazilian coffee stocks rose by 17% in the month of
November and that only partially serves to countervail the recent bullish
Brazilian crop report. US coffee imports in October rose by a minimal.7% but
that change is insignificant. Some traders suggest that March coffee lacks
significant support until the market falls back down to the mid November
consolidation around 90.00. Talk that some US retail coffee prices were set to
be raised by 14% could also have been cause for some selling in coffee on
Tuesday.
Technical Outlook
COFFEE (MAR) 12/15/2004: Stochastics trending
lower at midrange will tend to reinforce a move lower especially if support
levels are taken out. The market’s short-term trend is negative as the close
remains below the 9-day moving average. The upside closing price reversal on the
daily chart is somewhat bullish. The market’s close below the pivot swing number
is a mildly negative setup. The next downside objective is 92.05. The next area
of resistance is around 95.05 and 96.00, while 1st support hits today at 93.10
and below there at 92.05.
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SUGAR MARKET RECAP
12/14/2004
March Sugar closed down 0.12 at 8.59. This was
0.04 up from the low and 0.10 off the high.
The lowest close since November 12th leaves the
market vulnerable to more long liquidation selling with speculators holding a
hefty net short position. Spread activity, against the May contract appeared to
be putting pressure on March. In new tender business, Indonesia bought 20,000
tons of whites while Iran is pricing 40,000 tons of raw after buying the same
amount from Brazil last week. The weak close for March sugar puts the next
downside target at 8.40. To improve the market’s technical structure March would
have to close back over 8.80.
Technical Outlook
SUGAR (MAR) 12/15/2004: Stochastics trending
lower at midrange will tend to reinforce a move lower especially if support
levels are 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 1st swing
support number suggests a moderately negative setup for today. The next downside
target is 8.47. The next area of resistance is around 8.66 and 8.74, while 1st
support hits today at 8.52 and below there at 8.47.
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COTTON MARKET RECAP
12/14/2004
March Cotton finished down 0.59 at 42.63, 0.92
off the high and 0.03 up from the low.
March cotton closed weaker in a listless trade,
but well with in the market’s recent trading band between 44 and 42 cents. While
the overall supply/demand fundamentals are bearish, there was noted trade house
buying as the market dipped under 43 cents which provided some support. A lack
of fresh news has kept prices within a narrow trading band, but another push
lower can not be ruled out as the market continues to absorb huge world
supplies.
Technical Outlook
COTTON (MAR) 12/15/2004: Momentum studies
trending lower at mid-range should accelerate a move lower if support levels are
taken out. The market’s close below the 9-day moving average is an indication
the short-term trend remains negative. The downside closing price reversal on
the daily chart is somewhat negative. The market’s close below the 1st swing
support number suggests a moderately negative setup for today. The next downside
objective is now at 41.91. The next area of resistance is around 43.10 and
43.80, while 1st support hits today at 42.16 and below there at 41.91.