This Is Why Copper Is Sagging

Technical Outlook

BONDS (DEC) 09/11/03: 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. Near-term resistance for bonds
is at 108.18 and then again at 109.02, while swing support hits at 107.00 and
below there at 105.30. The market’s close above the 9-day moving average
suggests the short-term trend remains positive. Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 109.02.

T-NOTES(DEC) Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
112.20. With the close over the 1st swing resistance number, the market is in a
moderately positive position. The major trend is down with the cross over back
below the 40-day moving average. Near-term resistance for the T-Notes is at
112.10 and then again at 112.20, while swing support hits at 111.10 and below
there at 110.19. The market’s short-term trend is positive on a close above the
9-day moving average.

 

STOCK INDICES RECAP

9/10/2003

With the Treasury market fueling aggressively
higher into its last hour of trade, the stock market saw some added macro
economic anxiety. It also is possible that reports of a new Bin Laden video
sparked the bond rally as the resurfacing of Bin laden in of it self could be
considered a blow to consumer and investing sentiment. In the end, the Treasury
market forged a critical upside breakout and that could propagate stop loss
buying. Some traders suggested the initial claims report and the 9/11
anniversary Thursday morning added to the renewed long interest.

Technical Outlook

S&P500 (SEP) 09/11/03: The market is in a bearish
position with the close below the 2nd swing support number. Underlying support
comes in at 1007.90 and 1002.50, with overhead resistance at 1020.10 and
1026.90. The market’s short-term trend is negative as the close remains below
the 9-day moving average. The daily stochastic’s gave a bearish indicator with a
crossover down. Momentum studies are trending lower from high levels which
should accelerate a move lower on a break below the 1st swing support. The next
downside objective is now at 1002.50.

S&P E-Mini (SEP): Stochastics turning bearish at
overbought levels will tend to support lower prices if support levels are
broken. The next downside objective is 1011.56. The market tilt is slightly
negative with the close under the pivot. Near-term resistance for the S&P Mini
is at 1031.13 and then again at 1040.06, while swing support hits at 1016.88 and
below there at 1011.56. A positive signal for trend short-term was given on a
close over the 9-bar moving average.

NASDAQ (SEP) The gap lower price action on the day session
chart is a bearish indicator for trend. The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. The close
below the 2nd swing support number puts the market on the defensive. The market
should run into resistance at 1352.50 and above there at 1373.25 with support at
1321.50 and 1311.25. 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 next downside target is 1311.3.

 

CURRENCY MARKET RECAP

9/10/2003

We have to think that the Dollar saw early profit
taking short covering and that later in the session news that Argentina had
missed a debt payment to the IMF gave the Dollar additional lift. However, with
the US equity market weak and the US military suffering another car bombing
incident in Iraq the Dollar was unable to forge much in the way of upside gains.
Maybe the forecasts for a moderate decline in weekly initial claims on Thursday
morning provided enough macro economic optimism to countervail the negative
political events of the session. The biggest loser on the session was the Swiss,
which seems to indicate a lower flight to quality sense in the currency markets.

Technical Outlook

YEN (DEC): 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. Swing resistance is targeted at 85.90 and above there at 86.15, with the
yen finding support around 85.47 and below there at 85.29. Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The next
downside target is 85.29.

EURO (DEC): Momentum studies are trending higher,
but have entered overbought levels. The near-term upside objective is at 1.1225.
The market is in a bearish position with the close below the 2nd swing support
number. Swing support for the Euro comes in at 1.1125, with overhead resistance
at 1.1225. 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 gap
down on the day session chart is bearish with more selling pressure possible
today.

 

PRECIOUS METALS RECAP

9/10/2003

Profit taking and negative influence from the
Dollar caused gold to chop lower Wednesday. Reports that Argentina missed a debt
payment to the IMF could have lifted prices if that country is thought to be
sliding back into a fiscal debacle. We also would have expected gold to get
buying interest off the news that a car bomb damaged the US intelligence
headquarters in Iraq but the market didn’t respond. With silver up on the
session and the US stock market lower we have to think that the overall bull
case in the metals remains in place.

Technical Outlook

SILVER (DEC): With the close higher than the
pivot swing number, the market is in a slightly bullish posture. Initial support
for silver is at 523.0 and below there at 519.0 with resistance likely at 526.7
and 530.0. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. Studies are showing positive momentum, but
are now in overbought territory so some caution is warranted. The next upside
target is 526.7.

GOLD (DEC): Support for gold today comes in near
378.20, while resistance is pegged at 384.20. Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
384.20. The market’s close below the pivot swing number is a mildly negative
setup. The market’s short-term trend is positive on a close above the 9-day
moving average.

 

COPPER MARKET RECAP

9/10/2003

The copper market sagged under the weight of
small spec and fund liquidation and off the idea that more supply might be
coming to the world market. With the Escondida mine in Chile showing a sharp 37%
increase in January through August production the world has to wonder if some of
the major producers haven’t already decided to “un-idle” some production. With
the US stock market falling below critical support and the macro economic view
turning slightly negative we can see why many longs bailed out.

 

ENERGY MARKET RECAP

9/10/2003

The weekly inventory report showed massive
declines in crude stocks of 6.5 million at the API and 4.2 million at the DOE
and that could have been considered an extremely bullish development. However,
with the trade expecting to see a decline in refinery operating rate and seeing
the API rate increase and API gasoline stocks rise the bull camp was
discouraged. We have to think that the lack of bullish response in prices
following the crude stocks decline means that the market is less sensitive or
that the market expects gasoline stocks to be on the rise in the near future.

Technical Outlook

CRUDE OIL (NOV): The outside day up is a positive
signal. The upside closing price reversal on the daily chart is somewhat
bullish. With the close over the 1st swing resistance number, the market is in a
moderately positive position. Support for crude is keyed on 29.05 and below
there at 28.51, with resistance pegged at 29.81 and 30.03. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. Daily stochastics are trending lower, but have declined into oversold
territory. The next downside objective is now at 28.51.

UNLEADED GAS (NOV): Positive momentum studies in
the neutral zone will tend to reinforce higher price action. The next upside
target is 84.14. With the close higher than the pivot swing number, the market
is in a slightly bullish posture. Resistance today is at 84.14, while support
should be found around 79.94. The downside closing price reversal on the daily
chart is somewhat negative. The market’s close above the 9-day moving average
suggests the short-term trend remains positive.

HEATING OIL (NOV): With the close over the 1st
swing resistance number, the market is in a moderately positive position.
Heating oil should encounter support around 76.03, with resistance is at 80.03.
The market’s short-term trend is negative as the close remains below the 9-day
moving average. Daily stochastics are trending lower, but have declined into
oversold territory. The next downside objective is now at 76.03. The outside day
up is a positive signal. The upside closing price reversal on the daily chart is
somewhat bullish.

 

CORN MARKET RECAP

9/10/2003

December corn closed 1/2 cent higher on the
market with a low-volume, consolidation type trade ahead of the key USDA news
for release before the opening. The average trade estimate for production is
9.829 billion bushels (range 9.5-10.01) as compared with 10.064 billion in the
August report. This would be down anywhere from 54 to 573 million bushels from
last month. In that report the USDA projected ending stocks at just 1.184
billion bushels. Ending stocks for the current production year are at a 6-year
low of 1.009 billion bushels. The lack of deliveries, firm cash markets and
continued deterioration in crops since September 1st helped provide underlying
support.

Technical Outlook

CORN (DEC) 09/11/03: Momentum studies are
trending lower from high levels which should accelerate a move lower on a break
below the 1st swing support. The next downside objective is now at 240 1/2. The
swing indicator gave a neutral reading since the market’s close was equal to the
pivot number. Market resistance comes in at 243 1/2 today, with support at 240
1/2. The market’s short-term trend is positive on a close above the 9-day moving
average.

 

SOY COMPLEX RECAP

9/10/2003

Soybeans closed slightly lower with very light
volume in choppy, consolidation trade ahead of the report. News that China
imports could be higher than current USDA forecasts failed to provide support as
the focus is on the USDA production forecast for the morning. The average trade
estimate for production is 2.757 billion bushels (range 2.712-2.806) as compared
with 2.862 billion in the August report. Ending stocks last month for the
2003/2004 season were pegged at 220 million bushels as compared with this years
(7-year low) ending stock forecast of 145 million bushels.

Technical Outlook

SOYBEANS (NOV) 09/11/03: It is a slightly
negative indicator that the close was lower than the pivot swing number. The
next area of resistance is around 599 1/2 and 603 , while 1st support hits today
at 593 and below there at 590 . The market’s close above the 9-day moving
average suggests the short-term trend remains positive. Studies are showing
positive momentum, but are now in overbought territory so some caution is
warranted. The next upside target is 603 .

MEAL (DEC): Momentum studies are trending higher,
but have entered overbought levels. The near-term upside objective is at 189.0.
First resistance comes in at 187.7, with support at 185.6. The market’s
short-term trend is positive on a close above the 9-day moving average. The
market’s close below the pivot swing number is a mildly negative setup.

BEAN OIL (DEC): The market’s close above the
9-day moving average suggests the short-term trend remains positive. Negative
momentum studies in the neutral zone will tend to reinforce lower price action.
The next downside target is 20.44. A positive setup occurred with the close over
the 1st swing resistance. Daily swing resistance is found at 20.92 and above
there at 21.04. Support should be encountered at 20.62 and 20.44.

 

WHEAT MARKET RECAP

9/10/2003

News from Egypt’s main State wheat buyer that an
additional 120,000 tons of wheat per month may be purchased for the state
provided support to the wheat market early in the session. Trade was slow and
choppy ahead of the USDA Supply/Demand reports which will be released before the
opening. Traders are looking for very few changes in the US ending stock
forecast which was 644 million bushels last month. World production and world
ending stocks will be watched closely with some talk of a 1-3 million tons
decline as an optimistic view while others believe that there will be hardly any
adjustments. Last month, world production was pegged at 549.35 million tons
which pushed ending stocks down to 130.55 million tons from 164.1 this year and
197.2 million tons last year.

Technical Outlook

WHEAT (DEC) 09/11/03: It is a slightly negative
indicator that the close was lower than the pivot swing number. Look for
near-term support at 355 and below there at 353 1/2, with resistance levels at
360 and 363 1/2. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative. Momentum studies are
declining, but have fallen to oversold levels. The next downside target is 353
1/2.

 

LIVE CATTLE RECAP

9/10/2003

December Cattle closed unchanged on the session
but nearly 100 points off of the lows of the day as early selling failed to
generate additional long liquidation or more new selling. December cattle is
still 500 points discount to the cash market which helped support the market as
the packer looks to have increasing incentive to move cattle through the
pipeline which might keep the cash markets steady to higher again next week.
Boxed-beef prices at mid-session were up $2.77 to a new all-time high at
$157.27.

Technical Outlook

CATTLE (OCT) 09/11/03: The daily stochastics have
crossed over down which is a bearish indication. 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 next downside target is
85.32. It is a slightly negative indicator that the close was lower than the
pivot swing number. Support should be encountered at 86.10 and below there at
85.32. Market resistance is at 87.47 and then again at 88.07. The market’s close
above the 9-day moving average suggests the short-term trend remains positive.
The 9-day RSI over 70 indicates the market is approaching overbought levels.

 

LEAN HOGS RECAP

9/10/2003

October Hogs hit new contract highs early in the
session but the close below the opening and 102 points off of the highs of the
day leaves the appearance of a top. Cash hogs were sharply higher on the session
with some terminals up $3.00 on the day as tighter producer selling and the
surge in pork cut-out values from Tuesday afternoon helped trigger active
buying. The CME 2-Day Lean index for the period ending September 8th was up 64
cents to 52.27 which leaves futures at a stiff premium to the cash market.
However, the surge in cash markets for the past two days suggests sharply higher
cash Index adjustments in the next few days.

Technical Outlook

HOGS (OCT) 09/11/03: It is a mildly bullish
indicator that the market closed over the pivot swing number. Resistance levels
comes in at 59.92 and 60.80 today, while support is around 58.52 and then 58.00.
The rally brought the market to a new contract high. The market’s short-term
trend is positive on a close above the 9-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 next downside objective is now at 58.00.
With a reading over 70, the 9-day RSI is approaching overbought levels.

 

COCOA MARKET RECAP

9/10/2003

We are surprised to see cocoa prices slide in the
action Wednesday because the press was picking up rumors that the main crop
harvest was starting in some regions of the Ivory Coast. The reason we are
surprised that prices slid was the fact that the trade was picking up talk that
Ivory Coast farmers were not intending to sell the initial harvested supply as
they normally do. Maybe the trade saw selling because the period of higher
supply is starting and that might take some of the upside momentum out of play.

Technical Outlook

COCOA (DEC)09/11/03 The close below the 1st swing
support could weigh on the market. Cocoa should run into resistance at 1652 and
above there at 1676 with support at 1611 and 1594. Negative momentum studies in
the neutral zone will tend to reinforce lower price action. The next downside
target is 1594.25. Short-term indicators on the defensive. Consider selling an
intraday bounce.

 

COFFEE MARKET RECAP

9/10/2003

Dec coffee closed slightly weaker amid a choppy
inside trading day. A weak London close and forecasts for rain in Brazil’s
coffee growing regions over the next several days brought on some profit taking.
Brazil’s local weather services are at odds for the amount of rainfall expected
Wed through Sunday. Brazil’s growing areas are in need of rain during the
upcoming flowering stage in order to have a good crop. Spec buying on dips
provided a floor.

Technical Outlook

COFFEE (DEC)9/11/03 The market has a slightly
positive tilt with the close over the swing pivot. The 9-day RSI over 70
indicates the market is approaching overbought levels. Studies are showing
positive momentum, but are now in overbought territory so some caution is
warranted. The near-term upside objective is at 72.80.The Coffee contract should
run into resistance at 71.80 and above there at 72.80 with support at 69.65 and
68.50. The market’s short-term trend is positive on a close above the 9-day
moving average.

 

SUGAR MARKET RECAP

9/10/2003

October sugar closed firmer on trade and
speculative buying as prices had become over sold after the latest price slide.
However, the upside is still limited by burdensome supplies and slack demand.
Oct has resistance around 6.20. The latest UK beet test showed sugar content up
vs last year despite indicating dry conditions have not adversely affected the
crop so far.

Technical Outlook

SUGAR (OCT) 09/11/03: The market’s close above
the 2nd swing resistance number is a bullish indication. Swing resistance comes
in at 6.20, with support found at 5.94. The market’s short-term trend is
negative as the close remains below the 9-day moving average. 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 near-term upside objective is at
6.20.

 

COTTON MARKET RECAP

9/10/2003

Dec cotton gapped higher indications that China
will be a large importer of cotton in the coming crop year. China’s Ag Minister
reduced their estimate for the 2003/04 cotton production to between 23 million
to 24 million bales vs a 27 million forecast by the USDA in the August report.
China is a major importer of US cotton so the smaller crop could mean US export
sales will continue to be strong. On a push through the 63 resistance level, the
next upside target for Dec cotton is up at 65.97. For Thursday’s export sales
the estimates range between 35,000 and 80,000 bales compared to 77,400 bales
last week. Shipments are estimated between 70,000 to 125,000 bales vs 129,300
bales last week.

Technical Outlook

COTTON (DEC) 09/11/03: The market’s close above
the 9-day moving average suggests the short-term trend remains positive. 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. Next
resistance area comes in at 63.53 and then again at 64.22, while support is
targeted at 61.52 and 60.20. Studies are showing positive momentum, but are now
in overbought territory so some caution is warranted. The next upside target is
64.22. The 9-day RSI over 70 indicates the market is approaching overbought
levels. The gap upmove on the day session chart is a bullish indicator for
trend.