This May Lead To Even Higher Prices At the Pump

Technical Outlook

#BONDS (JUN) 03/25/04: With the close higher than the pivot swing number, the market is in a slightly bullish posture. Near-term resistance for bonds is at 116.08 and then again at 116.21, while swing support hits at 115.18 and below there at 115.09. 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 116.21.

T-NOTES(JUN) Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 116.18. It is a mildly bullish indicator that the market closed over the pivot swing number. 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 116.11 and then again at 116.18, while swing support hits at 115.32 and below there at 115.27. The market’s short-term trend is positive on a close above the 9-day moving average.

STOCK INDICES RECAP

3/24/2004

From a technical perspective, the stock-market put in a positive performance Wednesday. The durable-goods report was a somewhat supportive, while the housing numbers were distinctly supportive. Many stock traders also took comments from the U.S. Federal Reserve, as a positive, while other short players apparently decided to bank profits off the recent slide rather than wait for even more downside action. The fact that a bomb was found buried under the train tracks, east of Paris, probably keeps geopolitical anxieties high and in effect limits the stock market’s ability to recover. Since macroeconomics psychology is so negative, it might take a series of better than expected regularly scheduled economic numbers, just to turn the bearish tide fully around. In looking back at the information Wednesday, it would seem as if the results were generally supportive, but in order to facilitate more gains, investors will need consistent bullish proof from the numbers.

Technical Outlook

#S&P500 (JUN) 03/25/04: The market’s close below the pivot swing number is a mildly negative setup. The upside closing price reversal on the daily chart is somewhat bullish. Underlying support comes in at 1085.55 and 1079.13, with overhead resistance at 1097.85 and 1103.73. 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 1079.13.

S&P E-Mini (JUN): The daily closing price reversal up is a positive indicator that could support higher prices. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The next downside objective is 1078.69. The market tilt is slightly negative with the close under the pivot. Near-term resistance for the S&P Mini is at 1098.13 and then again at 1104.19, while swing support hits at 1085.38 and below there at 1078.69. A negative signal for trend short-term was given on a close under the 9-bar moving average.

NASDAQ (JUN) The market’s close below the 9-day moving average is an indication the short-term trend remains negative. A positive setup occurred with the close over the 1st swing resistance. The market should run into resistance at 1398.00 and above there at 1408.50 with support at 1374.00 and 1360.50. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 1360.5.

MINI DOW (JUN) The daily closing price reversal up is positive. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The market should run into resistance at 10091 and above there at 10141 with support at 9982 and 9923. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 9923. It is a slightly negative indicator that the close was lower than the pivot swing number.

CURRENCY MARKET RECAP

3/24/2004

The Dollar Index opened moderately higher and pretty much held those gains for the entire session Wednesday. The fact that a bomb was found outside of Paris in a way deflates the Euro and supports the Dollar. In other words, if the terrorism spotlight-is taken off exclusively off the U.S., at the same time that one might conclude that U.S. economic information is getting better the Dollar could find consistent support. It should also be noted that U.S. Federal Reserve official comments released during the session Wednesday, seemed to hint at a slightly higher chance of rising US rates and that is another supportive element for the U.S. Dollar. However, in order for the Dollar to manage an upside breakout on the charts, the market will have to see a pattern of it better than expected U.S. economic reports.

Technical Outlook

#CURRENCIES 03/25/04: YEN (JUN): 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. Swing resistance is targeted at 94.68 and above there at 94.81, with the yen finding support around 94.23 and below there at 93.91. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 94.81. The 9-day RSI over 70 indicates the market is approaching overbought levels.

EURO (JUN): Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 1.2012. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.2012, with overhead resistance at 1.2236. The market’s short-term trend is negative as the close remains below the 9-day moving average. The major trend is down with the cross over back below the 40-day moving average. The gap down on the day session chart is bearish with more selling pressure possible today.

PRECIOUS METALS RECAP

3/24/2004

The gold market exhibited some rather volatile trade action Wednesday. The fact that the U.S. Dollar was up over 80 points certainly undermined the trade early in the session and therefore gold prices were never really able to shake the selling interest. While evidence of another terrorist action was uncovered in France, neither gold, nor silver were in a position to benefit from increased flight to quality concerns because of the prevailing opening weakness. While we suspect that Middle East tensions will continue to provide support for gold and silver, a move back above 89.20 in the June Dollar Index, could effectively derail fresh long interest in gold and silver. In the end, the bias in metals remains up, but countervailing forces could lock prices within this week’s range.

Technical Outlook

#P-METALS 03/25/04: SILVER (MAY): It is a slightly negative indicator that the close was lower than the pivot swing number. Initial support for silver is at 755.8 and below there at 747.4 with resistance likely at 767.7 and 774.3. 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 767.7. The 9-day RSI over 70 indicates the market is approaching overbought levels. A new contract high was made on the rally. The downside closing price reversal on the daily chart is somewhat negative.

GOLD (JUN): Support for gold today comes in near 413.90, while resistance is pegged at 422.70. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 422.70. 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

3/24/2004

While the copper market did manage to post gains early in the session, the action did not give off as strong of a bullish tilt as has been seen recently. In fact, when one considers the favorable U.S. economic information released during the session, it’s surprising the copper didn’t manage a moderate run higher. Some traders suggested that the stronger Dollar action prompted profit-taking by some of the fund longs in the U.S. copper market. However, basic fundamentals in the copper market continue to be supportive of the bull case, especially with LME copper stocks extending the pattern of large daily declines.

ENERGY MARKET RECAP

3/24/2004

Energy prices could have closed significantly weaker on the session Wednesday, especially when one considers the magnitude of the gains in crude stocks that were posted in the API report. OPEC members suggested that the large US crude stock increases were alarming and that in a sense could solidify the chance of a March 31st production cut. According to the API, crude stocks rose by 4 million barrels, while the DOE showed US crude stocks to risen by an even larger 7.5 million barrel tally. In other words, it would finally appear as if some seasonal rebuilding is taking place in U.S. Inventories. Some traders suggest the inventory readings were bearish in the short term, but bullish in long-term, as the increase in crude stocks probably insures the upcoming production cut.

Technical Outlook

#ENERGIES 03/25/04: CRUDE OIL (MAY): The market’s close below the pivot swing number is a mildly negative setup. Support for crude is keyed on 36.58 and below there at 36.19, with resistance pegged at 37.44 and 37.91. The market’s close on the 9-day moving average is neutral. 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 36.19.

UNLEADED GAS (MAY): Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 117.72. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Resistance today is at 117.72, while support should be found around 111.12. A new contract high was made on the rally. The market’s close above the 9-day moving average suggests the short-term trend remains positive.

HEATING OIL (MAY): The market’s close below the pivot swing number is a mildly negative setup. Heating oil should encounter support around 89.53, with resistance is at 93.73. 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. The next downside objective is now at 89.53.

CORN MARKET RECAP

3/24/2004

A successful test of contract highs and sharply lower close may have attracted significant long liquidation selling into the close for corn. Weakness in soybeans and a perception of better pipeline supplies for corn after increased producer selling recently helped to trigger selling. A 50% correction of the rally off of the March 8th lows leaves 1st key support on a corrective break at 309 1/2. The lack of new news in the export area and overnight news that Taiwan opened up its market to China corn and meal for the next two months in order to help reduce feeding costs may have helped trigger the long liquidation selling from speculators shortly after the higher opening. Corn seemed to have led the break in grains into the mid-session. Cash basis levels were firm after recent weakness as cash dealers indicate that warmer weather should bring about increased interest from producers in fieldwork and less interest in moving grain to the elevator. The overnight rally fell short of contract highs and the lack of enough buying support to move to new highs may also be seen as a potentially bearish factor from technical traders. Futures remain in a very overbought condition. For the weekly export sales report, released before the opening, traders are looking for sales near 800,000-1.2 million tons as compared with 1.314 million tons last week.

Technical Outlook

#CORN (MAY) 03/25/04: 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 300 1/4. The market is in a bearish position with the close below the 2nd swing support number. Market resistance comes in at 322 1/4 today, with support at 300 1/4. The market’s short-term trend is negative as the close remains below the 9-day moving average. The outside day down is a negative signal. The daily closing price reversal down puts the market on the defensive.

SOY COMPLEX RECAP

3/24/2004

The sweeping reversal from a contract and multi-year high for May soybeans could attract additional technical selling over the near-term as the market attempts to correct the overbought condition. Traditional technical indicators are at extreme levels and speculators are thought to be holding a hefty net long position and active long liquidation selling was noted into the close. The bullish action overnight was watered down by news that the port strike has been resolved at the key export port of Paranagua, Brazil. May futures managed a new contract high and new 15 1/2 year highs for the nearby futures overnight with a high of 10.63 3/4. Brazil crop concerns and the fast pace of usage with tightening supplies in the US remain as the primary bullish factors. News that exporters sold 110,000 tons of US soybeans for 2004/2005 shipment helped to support the higher opening and has helped to support new crop November soybeans in early trade. November soybeans managed new contract highs and pierced psychological resistance of 8.00 overnight with a high of 802. Talk that China buyers are backing away from the soybean market due to high prices and good weather for the Brazil harvest are seen as limiting factors to the bull trend. Dryness in some areas of Brazil which still have soybeans which have not reached maturity is seen as a positive factor. While the resolution of the port strike may be seen as the reason for the sharp break to lower on the session after the higher opening, it seems that the corn market led grains lower. For the weekly export sales report, released before the opening, traders are looking for sales near 0-200,000 tons for soybeans as compared with 216,200 tons last week, 25,000-50,000 tons for meal vs. 167,700 tons last week and 0-5,000 for oil vs. 2100 tons last week.

Technical Outlook

#SOYBEANS (MAY) 03/25/04: The outside day down and close below the previous day’s low is a negative signal. The downside closing price reversal on the daily chart is somewhat negative. The close below the 2nd swing support number puts the market on the defensive. The next area of resistance is around 1046 and 1075 1/2, while 1st support hits today at 1001 and below there at 985 1/2. The market’s close above the 9-day moving average suggests the short-term trend remains positive. 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 985 1/2.

MEAL (MAY): 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 306.3. The outside day down is a negative signal. The daily closing price reversal down puts the market on the defensive. First resistance comes in at 324.6, with support at 311.1. The market’s short-term trend is positive on a close above the 9-day moving average. The market is in a bearish position with the close below the 2nd swing support number. With a reading over 70, the 9-day RSI is approaching overbought levels.

BEAN OIL (MAY): The market’s close below the 9-day moving average is an indication the short-term trend remains negative. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 35.43. The close below the 2nd swing support number puts the market on the defensive. The outside day down and close below the previous day’s low is a negative signal. The downside closing price reversal on the daily chart is somewhat negative. Daily swing resistance is found at 34.59 and above there at 35.43. Support should be encountered at 33.22 and 32.69.

WHEAT MARKET RECAP

3/24/2004

The mixed close after choppy, two-sided trade leaves the market in a slight overbought condition as the weather forecast for a dry trend in the plains in the next few weeks seemed to be enough to offset the overflow bearish influence of the sharp drop in soybeans. News that Jordan bought 100,000 tons of hard wheat from the US (none to other countries) was seen as a positive development. In addition, news of another tender for 200,000 tons to Iraq on top of the 630,000 tender could be seen as supportive as long as the US receives a good share of this business. The Iraq tenders and the outlook for dry weather with above normal to much above normal temperatures for the central plains are both supportive factors for hard red wheat (Kansas City) and the basis recently has been strong for hard red wheat but steady to lower for soft red winter wheat. For the weekly export sales report, released before the opening, traders are looking for sales near 400,000-600,000 tons as compared with 419,700 tons last week.

Technical Outlook

#WHEAT (MAY) 03/25/04: It is a slightly negative indicator that the close was lower than the pivot swing number. Look for near-term support at 406 1/2 and below there at 401 3/4, with resistance levels at 418 and 424 3/4. 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 424 3/4.

LIVE CATTLE RECAP

3/24/2004

April cattle managed to hold support to close just slightly lower on the session while other months were down moderately due to continued expectations that cattle supplies will be on a rise into late April and May. The lack of a change in the export outlook and long liquidation selling from speculators added to the bearish tone. Boxed-beef cut-out values for choice 600-750 pound cuts were down 11 cents to $141.61 as compared with $144.64 last week at this time. Traders were looking for slaughter to come in near 120,000-128,000 head but slaughter, released after the close, came in at just 110,000. Normally, when slaughter is below expectations it is considered a sign of weaker than expected demand from packers.

Technical Outlook

#CATTLE (JUN) 03/25/04: Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 72.15. It is a slightly negative indicator that the close was lower than the pivot swing number. Support should be encountered at 72.50 and below there at 72.15. Market resistance is at 73.35 and then again at 73.85. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

LEAN HOGS RECAP

3/24/2004

April hogs drifted lower in a quiet, inside trading session while summer months were down moderately. Positioning ahead of Friday’s quarterly USDA Hogs and Pigs report along with follow-through technical selling from Monday’s reversal helped pressure the market. Declining packer profit margins, weaker pork values and ideas that hog supplies will rise in the weeks just ahead helped to provide support. The 2-day Lean Index was up 36 cents to $68.13 as compared with $65.72 one week ago. Ideas that cash markets will weaken in the days just ahead helped to pressure the market in spite of the discount of futures to the cash Index.

Technical Outlook

#HOGS (JUN) 03/25/04: The market’s close below the 1st swing support number suggests a moderately negative setup for today. Resistance levels comes in at 70.92 and 71.80 today, while support is around 69.72 and then 69.40. Daily studies pointing down suggests selling minor rallies. The market’s short-term trend is negative as the close remains below 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 69.40.

COCOA MARKET RECAP

3/24/2004

After posting a new high for the move, May cocoa settled back to close just barely above the previous day’s close. Some traders noted the inability to hold above a critical moving average, while others remain fearful of late season origin selling binge. In fact, some traders are concerned that continuing arrivals at the Ivory Coast will serve to pressure May cocoa prices back down below the mid February lows. Other traders were concerned that a soaring U.S. Dollar would facilitate additional selling in U.S. cocoa in the days ahead.

Technical Outlook

COCOA (MAY) 03/25/04 The market has a slightly positive tilt with the close over the swing pivot. Cocoa should run into resistance at 1498 and above there at 1520 with support at 1468 and 1460. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 1519.50.

COFFEE MARKET RECAP

3/24/2004

July coffee closed 135 lower on the session and to the lowest close since March 10th and below the 40-day moving average. The technical structure of the market seems positive but only if support levels can hold. If not, the hefty net long position of the speculator leaves the market vulnerable to long liquidation selling. Weakness in London (May futures in London closed at the lowest level for 2004) helped trigger the early weakness and long liquidation added to the losses. Weakness in cash markets in Vietnam and Ivory Coast helped pressure London and news out of Brazil was slow so supportive news was lacking. London futures are back near the December lows while July coffee in New York closed 1315 points above the December 1st lows.

Technical Outlook

COFFEE (MAY) 3/25/04 The close below the 1st swing support could weigh on the market. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside objective is now at 73.90. The Coffee contract should run into resistance at 75.75 and above there at 76.70 with support at 74.35 and 73.90. The market’s short-term trend is negative as the close remains below the 9-day moving average. The major trend is down with the cross over back below the 40-day moving average. Daily studies pointing down suggests selling minor rallies.

SUGAR MARKET RECAP

3/24/2004

May sugar gapped higher following a surge in London to new contract highs May sugar in London with funds noted as the best buyers at both exchanges. Nearby futures in London hit the highest level March of 2003. With funds already thought to be holding a record net long position, further support from fund manages may be slow to develop. The tone from cash dealers in Europe, especially for the processed white market, has improved significantly with the UN tender for 200,000 tons of sugar for Iraq. Rising open interest and a solid technical trend are supportive factors. Ukraine officials are planning to ban all tolling operations (importing raw sugar to re-export as white sugar) so that officials will be able to get a better grasp of stocks situation. Ukraine produces near 1.4-1.6 million tonnes from beets but consumes near 1.9-2.0 million tons.

Technical Outlook

#SUGAR (MAY) 03/25/04: The gap upmove on the day session chart is a bullish indicator for trend. The market’s close above the 2nd swing resistance number is a bullish indication. Swing resistance comes in at 7.33, with support found at 6.99. The market’s short-term trend is positive on a close above 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 6.99. With a reading over 70, the 9-day RSI is approaching overbought levels.

COTTON MARKET RECAP

3/24/2004

The market closed moderately higher after a gap lower opening with hopes of active export news helping to support. For the weekly export sales report, released before the opening, traders are looking for sales near 200,000-300,000 bales as compared with 495,000 bales last week. With help from step 2 payments, shipments are expected to come in near 320,000-400,000 bales as compared with 320,200 bales last week. Trader believe that the recent break may have attracted significant buying from China. China has booked 4.34 million bales so far this season as compared with 1.39 million last year. The USDA forecast for exports is at a record 13.8 million bales for the 2003/2004 season as compared with 11.9 million bales last year. In putting a pencil to the dilemma of what to plant, many cotton producers in the Delta and Deep South seem to be switching to soybeans which seem to be significantly more profitable than cotton on land which can be easily converted. This is especially true for areas which can harvest soybeans in August as September soybeans are at a $1.00 per bushel premium to November and August soybeans at a $1.00 premium to September.

Technical Outlook

#COTTON (MAY) 03/25/04: 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. Next resistance area comes in at 66.24 and then again at 67.07, while support is targeted at 64.29 and 63.17. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 67.07. The daily closing price reversal up is positive.