This Is What Traders Are Concerned About Now
BOND MARKET RECAP
4/26/2005
June Bonds finished down 0-04 at 114-02, 0-16 off
the high and 0-12 up from the low.
June 10 Yr Treasury Notes finished down 0-020 at
110-310, 0-080 off the high and 0-075 up from the low.
As we feared the US numbers held some
surprises as a sharp rise in new home sales seemed to completely countervail the
as expected and significant decline in Conference Board consumer sentiment
readings. With oil prices falling another Dollar, better than expected US
economic readings in the home sales and Richmond Fed readings we understand the
light amount of profit taking in Treasuries on Tuesday morning. On the other
hand, the Conference Board expectation index was the lowest nearly 19 months and
that suggests the economy remains suspect. In general the Treasury probably
remains net spec short a significant amount and therefore the correction Tuesday
probably strengthens the technicals considerably.
Technical Outlook
BONDS (JUN) 04/27/2005: A crossover down in the
daily stochastics is a bearish signal. 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 cross over and close above
the 18-day moving average is an indication the longer-term trend has turned
positive. 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 113-07. The next area of
resistance is around 114-14 and 114-30, while 1st support hits today at 113-19
and below there at 113-07.
TNOTES (JUN) 04/27/2005: Momentum studies
trending lower from overbought levels is a bearish indicator and would tend to
reinforce lower price action. The cross over and close above the 18-day moving
average indicates the longer-term trend has turned up. The daily closing price
reversal down puts the market on the defensive. The market’s close below the
pivot swing number is a mildly negative setup. The next downside target is
110-155. The next area of resistance is around 111-060 and 111-140, while 1st
support hits today at 110-230 and below there at 110-155.
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STOCK INDICES RECAP
4/26/2005
June S&P finished down 10.5 at 1153.5, 13.5 off
the high and 0.8 up from the low.
June S&P E-Mini closed down 11 at 1153. This was
0.5 up from the low and 13 off the high.
June Dow closed down 95 at 10161. This was 11 up
from the low and 107 off the high.
The stock market ended up getting a much better
spin from the numbers than anyone would have expected but apparently the market
was unable to maintain the positive attitude through mid day. Even in the face
of soft energy prices the market failed to gather upside momentum and that might
suggest stock prices have run out of upside fuel. Some might suggest that the
new home sales readings were so strong that they are to be discounted while
others are simply unwilling to pay up at two week highs because of the problems
at GM and other general macro economic concerns. By our measure the majority of
the numbers release Tuesday were supportive but with the energy bounce off the
lows in the mid after action some players were fearful of more near term energy
market concerns.
Technical Outlook
S&P 500 (JUN) 04/27/2005: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
major trend has turned down with the cross over back below the 18-day moving
average. The outside day down and close below the previous day’s low is a
negative signal. The market is in a bearish position with the close below the
2nd swing support number. The next upside objective is 1170.97. The next area of
resistance is around 1160.64 and 1170.97, while 1st support hits today at
1146.35 and below there at 1142.38.
SP EMINI (JUN) 04/27/2005: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
market back below the 18-day moving average suggests the longer-term trend could
be turning down. The swing indicator gave a moderately negative reading with the
close below the 1st support number. The near-term upside objective is at
1169.62. The next area of resistance is around 1159.75 and 1169.62, while 1st
support hits today at 1146.25 and below there at 1142.63.
NASDAQ (JUN) 04/27/2005: The stochastics
indicators are rising from oversold levels, which is bullish and should support
higher prices. The market back below the 18-day moving average suggests the
longer-term trend could be turning down. The outside day down is somewhat
negative. The close below the 1st swing support could weigh on the market. The
next upside objective is 1460.37. The next area of resistance is around 1442.25
and 1460.37, while 1st support hits today at 1415.75 and below there at 1407.38.
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CURRENCY MARKET RECAP
4/26/2005
June US Dollar finished up 15 at 8394, 21 off the
high and 16 up from the low.
June Euro finished down 0.15 at 129.9, 0.27 off
the high and 0.29 up from the low.
June Euro Dollar closed down 0.01 at 96.575. This
was 0.01 up from the low and 0.02 off the high.
June Canadian Dollar closed down 0.41 at 80.4.
This was 0.3 up from the low and 0.24 off the high.
June British Pound finished down 0.41 at 190.13,
0.28 off the high and 0.36 up from the low.
June Swiss closed up 0.01 at 84.43. This was 0.24
up from the low and 0.16 off the high.
June Japanese Yen closed down 0.28 at 94.76. This
was 0.18 up from the low and 0.1 off the high.
The Dollar won by default on Tuesday and was
helped along by stronger than expected US economic information and the weakness
in energy complex. We also think that the Dollar benefited from the slack
inflation numbers from Japan and the fact that German economists were very
downbeat on the prospects of growth in 2005. The Pound and the Canadian seemed
to come under the most near term pressure but we suspect that the selling was
mostly technical in nature and that it could be difficult to extend the declines
without the US following up with a strong durable goods report on Wednesday.
Technical Outlook
YEN (JUN) 04/27/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The market now above the
18-day moving average suggests the longer-term trend has turned up. The close
below the 1st swing support could weigh on the market. The near-term upside
target is at 95.02. The next area of resistance is around 94.90 and 95.02, while
1st support hits today at 94.62 and below there at 94.46.
EURO (JUN) 04/27/2005: A bearish signal was
triggered on a crossover down in the daily stochastics. Momentum studies
trending lower at mid-range could accelerate a price break if support levels are
broken. The major trend could be turning up with the close back above the 18-day
moving average. The daily closing price reversal down is a negative indicator
for prices. The market’s close below the pivot swing number is a mildly negative
setup. The next downside objective is 129.34. The next area of resistance is
around 130.18 and 130.45, while 1st support hits today at 129.62 and below there
at 129.34.
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PRECIOUS METALS RECAP
4/26/2005
June Gold closed up 3.2 at 439. This was 2 up
from the low and 0.1 off the high.
July Silver finished down 0.004 at 7.302, 0.063
off the high and 0.042 up from the low.
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The gold market action Tuesday morning was very
impressive, as the gold managed the gains in the face of Dollar strength and
silver weakness. We suspect that improved macro economic developments make gold
bugs a little more optimistic about the potential for inflation and we also
think that repeated signs of falling physical gold production is serving to firm
gold up relative to other metals markets. Given the ultra strong close in gold
and the lack of near term resistance on the charts, it would seem like there is
a distinct difference between gold and silver.
Technical Outlook
SILVER (JUL) 04/27/2005: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The market now above the 18-day moving average suggests the longer-term
trend has turned up. The daily closing price reversal down is a negative
indicator for prices. The market has a slightly positive tilt with the close
over the swing pivot. The near-term upside target is at 741.2. The next area of
resistance is around 735.5 and 741.2, while 1st support hits today at 725.0 and
below there at 720.3.
GOLD (JUN) 04/27/2005: Momentum studies are
trending higher but have entered overbought levels. The major trend could be
turning up with the close back above the 18-day moving average. The gap up on
the day session chart gave a bullish indicator and more follow through could be
seen this session. Since the close was above the 2nd swing resistance number,
the market’s posture is bullish and could see more upside follow-through early
in the session. The next upside objective is 440.6. The next area of resistance
is around 440.0 and 440.6, while 1st support hits today at 438.0 and below there
at 436.5.
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COPPER MARKET RECAP
4/26/2005
June Copper closed down 2.30 at 146.50. This was
0.30 up from the low and 2.50 off the high.
July copper closed weak, but the market is still
caught in its recent trading range. Technically, the market looks to be a bit
over bought or at least seems to be losing upside momentum. A stronger Dollar,
weak stock market, slight rise in LME warehouse stocks and very weak consumer
sentiment number were negative factors that seemed to more than offset bullish
news of a sharp rise in new home sales. A break under 145 puts next support for
July copper at 140.
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ENERGY MARKET RECAP
4/26/2005
June Crude Oil closed down 0.37 at 54.20. This
was 0.85 up from the low and 0.20 off the high.
June Heating Oil closed down 1.07 at 151.59. This
was 1.99 up from the low and 1.01 off the high.
June Unleaded Gas finished down 1.03 at 163.03,
1.47 off the high and 3.03 up from the low.
June Natural Gas finished down 0.04 at 7.18, 0.01
off the high and 0.10 up from the low.
June Propane closed down 0.02 at 0.86. This was
equal to the low and 0.01 off the high.
The energy complex started out weak, then fell
sharply into mid session but then seemed to recover some of the step losses into
the close Tuesday. Apparently a private forecasting group suggested that April
OPEC output increased to 30.4 million barrels per day and that seems to foster
the idea that crude supplies are still destined to rebuild in the spring demand
lull window. Also pressuring prices were suggestions from the United Arab
Emirates that the oil market was currently well supplied and that OPEC would
provide more oil if it was needed. Some suggested that the bounce in oil prices
might have been the result of an improved macro economic outlook in the US but
given the failed reaction in the stock market that bull argument seems to be
full of holes.
Technical Outlook
CRUDE OIL (JUN) 04/27/2005: 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. The gap lower on the day session chart is
bearish and puts the market on the defensive. The market tilt is slightly
negative with the close under the pivot. The near-term upside objective is at
55.08. The next area of resistance is around 54.72 and 55.08, while 1st support
hits today at 53.68 and below there at 52.99.
UNLEADED (JUN) 04/27/2005: 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. It is a slightly negative indicator that the close was lower than the
pivot swing number. The next upside objective is 167.14. The next area of
resistance is around 165.28 and 167.14, while 1st support hits today at 160.78
and below there at 158.14.
HEATING OIL (JUN) 04/27/2005: 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’s close below the pivot swing number is a mildly
negative setup. The next upside objective is 154.34. The next area of resistance
is around 153.09 and 154.34, while 1st support hits today at 150.09 and below
there at 148.35.
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CORN MARKET RECAP
4/26/2005
July Corn finished down 1/2 at 221 3/4, 3/4
off the high and 1 1/2 up from the low. December Corn closed up 1/2 at 237 3/4.
This was 1 1/2 up from the low and 1/2 off the high.
Old crop was slightly lower and new crop slightly
higher in quiet and choppy trade. A lack of new news for US exporters and talk
of increased export activity from China helped to limit the buying but there was
some support noted from the solid technical advance yesterday and from higher
wheat prices. Syngenta announced today that tests of the animal feed and grains
imported into the European Union have shown the products to be free of
unapproved GMO material. Basis levels for corn were steady today after the lower
basis levels of yesterday as producer selling slowed after a jump yesterday. A
combination of the jump in prices and wet fields led to move active movement
yesterday. Planting progress was pegged at 30% complete by the USDA in Monday
night’s weekly crop progress report as compared with trade estimates near
25-35%. Support for July corn moves up to 219 with resistance at 224 1/2.
Technical Outlook
CORN (JUL) 04/27/2005: 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 market’s
close below the pivot swing number is a mildly negative setup. The next upside
target is 223 3/4. The next area of resistance is around 222 3/4 and 223 3/4,
while 1st support hits today at 220 3/4 and below there at 219 1/2.
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SOY COMPLEX RECAP
4/26/2005
July Soybeans finished up 1 1/2 at 643 1/2, 3 off
the high and 4 up from the low. November Soybeans closed up 1 at 630 3/4. This
was 3 3/4 up from the low and 3 1/4 off the high.
July Soymeal closed down 0.5 at 199.1. This was
0.8 up from the low and 1.5 off the high.
July Soybean Oil finished down 0.16 at 22.79,
0.16 off the high and 0.14 up from the low.
The soybean complex continues to consolidate the
recent gains in choppy trade for the past 4 trading sessions. The market lacks
new market-moving news which contributed to the choppy trade early in the
session today. Some harvest delays in South America helped to provide support
but drier weather is in the forecast for this week which will help to see
progress at the tail end of the harvest. The Brazil harvest is thought to be
near 88% complete. Basis at the gulf was steady but the export market is quiet.
Producer selling was noted on the bounce yesterday but more so for corn than
soybeans. Hefty world supply of edible oils has kept soybean oil steady while
the recent trend in meal and soybeans is firm. July meal could not close above
psychological resistance for the second session in a row which might attract
some technical selling. July soybean support comes in at 637 with 653 1/4 as
next resistance.
Technical Outlook
BEANS (JUL) 04/27/2005: Positive momentum studies
in the neutral zone will tend to reinforce higher price action. 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
tilt is slightly negative with the close under the pivot. The next upside target
is 650 1/4. The next area of resistance is around 647 and 650 1/4, while 1st
support hits today at 640 and below there at 636 1/4.
MEAL (JUL) 04/27/2005: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The market now above the 18-day moving average suggests the longer-term
trend has turned up. The market tilt is slightly negative with the close under
the pivot. The near-term upside objective is at 201.5. The next area of
resistance is around 200.2 and 201.5, while 1st support hits today at 198.0 and
below there at 197.0.
BEANOIL (JUL) 04/27/2005: A positive indicator
was given with the upside crossover of the 9 & 18 bar moving average. Momentum
studies are trending higher from mid-range, which should support a move higher
if resistance levels are penetrated. 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
near-term upside target is at 23.09. The next area of resistance is around 22.94
and 23.09, while 1st support hits today at 22.64 and below there at 22.50.
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WHEAT MARKET RECAP
4/26/2005
July Wheat finished up 3 at 333 1/2, 2 off the high and 4 1/2
up from the low. December Wheat closed up 3 1/2 at 350. This was 5 up from the
low and 2 1/2 off the high.
With relatively light volume, the market was able
to advance to see solid gains with funds noted buyers of near 1500 contracts
into the mid-session. A slight decline in crop conditions and concerns that
there was some light damage from cold weather over the weekend helped to
support. Talk of hot and dry weather in western China growing areas helped to
provide some support. Export news is quiet. The weekend traders report hinted
that speculators were holding a hefty net short position as of April 19th and
short-covering has helped support the market this week. The weekly crop progress
report showed the winter wheat crop in good to excellent condition at 68% as
compared with 69% last week and 55% as the 15-year average for this time of the
year. Poor to very poor ratings moved up to 7% from 6% last week and 16% as the
15-year average for this time of the year. Spring wheat plantings reached 40%
complete as compared with 35% as the 15-year average for this time of the year.
July wheat support comes in at 329 1/2 and 325 3/4 with 335 3/4 and 343 1/2 as
next resistance.
Technical Outlook
WHEAT (JUL) 04/27/2005: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The cross over and close above the 18-day
moving average is an indication the longer-term trend has turned positive. The
market has a slightly positive tilt with the close over the swing pivot. The
near-term upside objective is at 339 1/4. The next area of resistance is around
336 3/4 and 339 1/4, while 1st support hits today at 330 1/4 and below there at
326 1/2.
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LIVE CATTLE RECAP
4/26/2005
June Live Cattle finished unchanged at 87.12,
0.17 off the high and 0.45 up from the low.
May Feeder Cattle closed up 0.10 at 108.75. This
was 0.60 up from the low and 0.15 off the high.
June cattle inched higher in choppy trade. Ideas
that the market was overbought after recent strong gains helped to trigger the
early sell-off but solid gains in beef prices and new contract highs in feeder
cattle helped support. Strength in hogs added to the positive tone and August
cattle managed to match or make a new contract high for the 6th session in a
row. Boxed beef cutout values at mid session were up $1.52 to $161.36 as
compared with $157.49 one week ago. Slaughter came in at 123,000 head as
compared with trade estimates at 110,000-120,000 head. The high slaughter
suggests strong demand from packers.
Technical Outlook
CATTLE (JUN) 04/27/2005: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The market now above the 18-day moving average suggests the longer-term
trend has turned up. With the close higher than the pivot swing number, the
market is in a slightly bullish posture. The near-term upside target is at
87.670. With a reading over 70, the 9-day RSI is approaching overbought levels.
The next area of resistance is around 87.420 and 87.670, while 1st support hits
today at 86.820 and below there at 86.450.
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LEAN HOGS RECAP
4/26/2005
June Lean Hogs finished up 1.60 at 76.75, 0.20
off the high and 1.30 up from the low.
May Pork Bellies closed unchanged at 81.50. This
was equal to the low and 0.85 off the high.
June hogs pushed sharply higher on the session
led by a more positive demand tone from packers and ideas that futures were
oversold after the recent sharp break. Traders had been expecting a jump in
producer marketings with the slowdown in fieldwork due to the weather but the
supply flow was tight enough to support a firm cash market. The 2-day lean index
for the period ending April 22nd came in at 70.27, up 25 cents for the day and
up from 69.87 last week. Strength in the loin market and ideas that cash markets
can gradually improve due to a tighter supply into late May helped support the
strong buying. Slaughter came in at 383,000 head as compared with trade
estimates at 379,000-385,000 head.
Technical Outlook
HOGS (JUN) 04/27/2005: The crossover up in the
daily stochastics is a bullish signal. Momentum studies are rising from
mid-range, which could accelerate a move higher if resistance levels are
penetrated. The major trend has turned down with the cross over back below the
18-day moving average. Market positioning is positive with the close over the
1st swing resistance. The next upside target is 77.950. The next area of
resistance is around 77.470 and 77.950, while 1st support hits today at 76.020
and below there at 75.000.
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COCOA MARKET RECAP
4/26/2005
July Cocoa finished down 10 at 1476, 19 off the
high and 2 up from the low.
With political cam in the Ivory Coast, at least
for the time being, and no new threat to supply, non-commercial traders continue
to unwind long positions which pressured July cocoa prices back to the January
low. The weak close suggest the market could come under additional selling
pressure and with support at $1,475 taken out, the next downside targets become
$1,466 then $1,450. Ivory Coast Farmgate prices were reported lower for April
18th-24th due to anticipate supplies from the mid-crop harvest.
Technical Outlook
COCOA (JUL) 04/27/2005: Momentum studies are
declining, but have fallen to oversold levels. The close under the 18-day moving
average indicates the longer-term trend could be turning down. The swing
indicator gave a moderately negative reading with the close below the 1st
support number. The next downside objective is 1460. The 9-day RSI under 30
indicates the market is approaching oversold levels. The next area of resistance
is around 1486 and 1501, while 1st support hits today at 1466 and below there at
1460.
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COFFEE MARKET RECAP
4/26/2005
July Coffee closed up 5.10 at 132.45. This was
6.05 up from the low and 0.55 off the high.
July coffee closed 510 higher on the session led
by active fund and speculative buying with the market moving to the highest
level since March 22nd. A lack of persistent commercial selling and moderate
speculative buying has kept the market in a steep uptrend over the past 7
trading sessions. The technical action remains bullish and there was talk that
traders are positioning in the coffee market for the cold weather season ahead
as the market builds a weather premium. The market does not seem to need
freezing weather to see higher prices as Arabica supplies are tightening ahead
of the new crop season in Brazil.
Technical Outlook
COFFEE (JUL) 04/27/2005: The major trend could be
turning up with the close back above the 40-day moving average. Daily
stochastics have risen into overbought territory which will tend to support
reversal action if it occurs. 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 above the 2nd swing resistance number is a bullish indication. The next
upside objective is 137.65. The next area of resistance is around 135.70 and
137.65, while 1st support hits today at 129.15 and below there at 124.50.
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SUGAR MARKET RECAP
4/26/2005
July Sugar closed up 0.16 at 8.52. This was 0.18
up from the low and 0.01 off the high.
July sugar closed 16 higher on the session and to
the highest level since April 12th as active speculative buying returned to
support the market ahead of a critical production forecast from Brazil and trade
buying was also noted. The Sao Paulo Cane Agroindustry Union pegged the Brazil
center-south cane crop at a record 345 million tonnes which is up 4.9% from last
year. Exports for the 2005/2006 season were pegged at 14.7 million tonnes from
14.3 million last year. Ethanol production was pegged at 15.1 billion liters as
compared with 13.6 billion for the 2004/2005 season. Exports were left unchanged
from this season at 1.8 billion liter.
Technical Outlook
SUGAR (JUL) 04/27/2005: Momentum studies are
trending higher from mid-range, which should support 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 above the 2nd swing
resistance number is a bullish indication. The next upside target is 8.66. The
next area of resistance is around 8.61 and 8.66, while 1st support hits today at
8.43 and below there at 8.29.
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COTTON MARKET RECAP
4/26/2005
July Cotton finished up 0.46 at 57.47, 0.03 off
the high and 1.47 up from the low.
A squeeze in the May contract continued to lift
July cotton higher Tuesday with the market now in a position to take out the
Sept, 2004 at 58.10. Cotton prices have been driven higher ad cotton merchant
Dunavant took a large delivery of the May contract and decertified 98,453 bales
of deliverable certified stocks at the exchange. With some in the trade
forecasting China’s cotton production for 2005/06 at 25 million bales (vs USDA
2004/05 est at 29 mil bales), the country may have to import 15 million bales.
The potential for higher than expected demand from China projects a move in Dec
cotton to 60.17.
Technical Outlook
COTTON (JUL) 04/27/2005: The upside crossover of
the 9 & 18 bar moving average is a positive signal. 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. It is a mildly
bullish indicator that the market closed over the pivot swing number. The next
upside target is 58.61. With a reading over 70, the 9-day RSI is approaching
overbought levels. The next area of resistance is around 58.22 and 58.61, while
1st support hits today at 56.72 and below there at 55.61.