This Shook Energy Bulls To The Core

Technical Outlook

BONDS (MAR) 03/04/04: It is a slightly negative indicator that the close was lower than the pivot swing number. Near-term resistance for bonds is at 113.14 and then again at 113.21, while swing support hits at 112.22 and below there at 112.05. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 112.05.

T-NOTES(MAR) Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 114.10. The market’s close below the pivot swing number is a mildly negative setup. 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 115.01 and then again at 115.05, while swing support hits at 114.19 and below there at 114.10. The market’s short-term trend is negative as the close remains below the 9-day moving average.

STOCK INDICES RECAP

3/3/2004

A weaker-than-expected reading in the ISM Non-Manufacturing Index was not enough to push stocks out of their established range as the market is likely to consolidate until Friday’s Employment data is known. Stocks held up well despite further declines in bond prices. The Fed’s Beige Book indicated the economy is growing at a moderate to accelerating pace, which provided support to stocks late in the day.
have bottomed.

Technical Outlook

S&P500 (MAR) 03/04/04: It is a mildly bullish indicator that the market closed over the pivot swing number. The upside closing price reversal on the daily chart is somewhat bullish. Underlying support comes in at 1145.65 and 1139.48, with overhead resistance at 1155.35 and 1158.88. The market’s short-term trend is positive on a close above the 9-day moving average. Momentum studies are trending higher from mid-range which should support a move higher if resistance levels are penetrated. The near-term upside objective is at 1158.88.

S&P E-Mini (MAR): The market made a new contract high on the rally. The daily closing price reversal up is a positive indicator that could support higher prices. Stochastics are at mid-range, but trending higher which should reinforce a move higher if resistance levels are taken out. The next upside objective is 1158.88. The market has a slightly positive tilt with the close over the swing pivot. Near-term resistance for the S&P Mini is at 1155.50 and then again at 1158.88, while swing support hits at 1146.00 and below there at 1139.88. A positive signal for trend short-term was given on a close over the 9-bar moving average.

NASDAQ (MAR) 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 market should run into resistance at 1472.00 and above there at 1481.50 with support at 1455.00 and 1447.50. The daily stochastics have crossed over down which is a bearish indication. The next downside target is 1447.5.

MINI DOW (MAR) 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 10617 and above there at 10645 with support at 10553 and 10517. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 10517. It is a slightly negative indicator that the close was lower than the pivot swing number.

CURRENCY MARKET RECAP

3/3/2004

The Dollar continued to skyrocket higher on growing optimism that growth in US jobs is accelerating and that interest rates have bottomed. However, the Dollar trimmed gains by the close as the Fed’s Beige Book gave a less friendly outlook for jobs growth, which raises doubts as to how strong Friday’s payroll data will be. As a result of the jobs uncertainty, Mar Dollar could trade sideways between 80 and 87.50 until Friday. If the ECB remains hawkish, the Dollar could re-test the lower range.

Technical Outlook

YEN (MAR): 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 91.04 and above there at 91.14, with the yen finding support around 90.73 and below there at 90.52. The close under the 40-day moving average indicates the longer-term trend could be turning down. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 90.52. The 9-day RSI under 30 indicates the market is approaching oversold levels.

EURO (MAR): Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 1.2016. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.2016, with overhead resistance at 1.2296. 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

3/3/2004

April gold remained under water this session as the dollar continued to rally and the Euro decline on expectations of a recovery in US jobs and indications US rates have bottomed. While April gold did manage to close back over $390 the trend remains down.

Technical Outlook

SILVER (MAY): It is a slightly negative indicator that the close was lower than the pivot swing number. Initial support for silver is at 664.2 and below there at 652.9 with resistance likely at 677.1 and 686.2. 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 652.9. The daily closing price reversal up is positive.

GOLD (APR): Support for gold today comes in near 386.48, while resistance is pegged at 397.08. Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 386.48. The market’s close below the pivot swing number is a mildly negative setup. The market’s short-term trend is negative as the close remains below the 9-day moving average.

COPPER MARKET RECAP

3/3/2004

May copper prices collapsed amid aggressive fund and producer selling as a negative technical action from Tuesday and negative shifting fundamentals created a void of buyers. A reversal in the Dollar, rising speculation US rates have bottomed and indications that mine production is set to expand added to the panic selling. Given the markets vertical climb, more highly volatile price action can be expected this week.

ENERGY MARKET RECAP

3/3/2004

A surprise jump in API crude oil stocks shook the bulls to the core triggering a mass exodus as spec and fund traders took profits. An increase in the refinery operating rate also suggested that refiners may soon start rebuilding gasoline supplies. Adding to the bearish sentiment was news that Saudi Arabia planned to cut oil prices to the US in April by between 20 and 40 cents, a restart of the Iraq Northern pipeline, and production from Venezuela not being affected by civil unrest. Since fund traders were holding near record net long positions in crude oil & unleaded gas prior to today’s break, we would expect follow through selling unless a new supply problem surfaces.

Technical Outlook

CRUDE OIL (APR): The market is in a bearish position with the close below the 2nd swing support number. Support for crude is keyed on 35.11 and below there at 34.56, with resistance pegged at 36.50 and 37.34. 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 34.56.

UNLEADED GAS (APR): 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 105.69. The close below the 2nd swing support number puts the market on the defensive. Resistance today is at 115.29, while support should be found around 105.69. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

HEATING OIL (APR):The market is in a bearish position with the close below the 2nd swing support number. Heating oil should encounter support around 86.68, with resistance is at 94.68. 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 daily stochastic’s gave a bearish indicator with a crossover down. The next downside objective is now at 86.68.

CORN MARKET RECAP

3/3/2004

Both May and December corn opened lower and closed higher on the session finding support from the run in soybeans. Weakness in the wheat market and some export concerns due to the strong dollar helped to limit the buying support. A surge in soybeans helped support the rally to higher on the session as long liquidation selling slowed shortly after the opening and there was talk of a continued flow of export demand ahead. South Korea bought 315,000 tons of optional origin corn this week and are tendering for 52,500 tons tonight and traders suspect that Japan may extend coverage on the current corrective break. The strong dollar was seen as a detriment to exports but cash basis levels were steady to slightly higher as producer selling failed to significantly increase on the break. Deliveries against the March remained at a hefty level this morning (1071 contracts) and CBOT corn registrations rose to 1187 contracts from 1187 posted late on Monday. There was still no sign of a strong commercial stopper for the deliveries. For the weekly export sales report, released before the opening, traders are looking for sales near 700,000-900,000 tons as compared with 987,200 tons last week.

Technical Outlook

CORN (MAY) 03/04/04: 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 292 3/4. The market’s close below the pivot swing number is a mildly negative setup. Market resistance comes in at 301 3/4 today, with support at 292 3/4. 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.

SOY COMPLEX RECAP

3/3/2004

Soybeans closed mostly higher led by the old crop contracts but November ended lower on the session. Concerns over the size of the Brazil crop and ideas that the market was oversold after yesterday’s 50 cent range helped to provide underlying support. Talk that there could be more rain for northern Brazil and that the southern dry areas may not get enough rain helped support. In addition, the lack of volume and the lack of fund long liquidation selling on the break yesterday was seen as a potentially bullish factor from floor traders. News that a crushing plant in the south will temporarily close due to soybean tightness and a lack of protection by cash dealers before the opening helped slow the selling as well. After the close last night, some elevators had put on protection for fear of excess producer selling but this morning, with a lack of producer selling, protection was lifted. Meal has found support from talk that bird flu problems in Asia seem to be under control while oil was firm this morning from steady palm oil values overnight and projected tight supplies if crushing plants continue to slow the crush. Deliveries this morning were 192 contracts for soybeans, 172 for meal and 106 for oil. For the weekly export sales report, released before the opening, traders are looking for soybean sales to show cancellations of 75,000 tons to as much as 200,000 tons of net sales, 0-75,000 tons for meal and 0-500 tons for oil.

Technical Outlook

SOYBEANS (MAY) 03/04/04: The daily closing price reversal up is positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next area of resistance is around 954 and 961 , while 1st support hits today at 932 and below there at 917 . The market’s close above the 9-day moving average suggests the short-term trend remains positive. 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 917 .

MEAL (MAY): 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 278.5. The upside closing price reversal on the daily chart is somewhat bullish. First resistance comes in at 288.1, with support at 282.6. The market’s short-term trend is positive on a close above the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing 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. 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 32.52. It is a slightly negative indicator that the close was lower than the pivot swing number. The daily closing price reversal up is positive. Daily swing resistance is found at 33.95 and above there at 34.30. Support should be encountered at 33.06 and 32.52.

WHEAT MARKET RECAP

3/3/2004

The surge in the dollar overnight and continued concerns that US wheat is becoming less competitive on the world market helped to trigger light long liquidation selling. Heavy rain this morning in Oklahoma and forecasts for good rains in the southern winter wheat areas for the rest of this week added to the bearish tone. The market moved to the lowest level since February 20th and to the lowest close since the 18th which was prior to the China buying spree. The lack of new news on the export front following disappointment in the Egypt tender this week and long liquidation selling helped pressure futures for much of the session in spite of strong gains in soybeans. China is expected to buy 3.0 million tons of wheat for the 2004/2005 season but this news even failed to the market. Deliveries against the March contract this morning were only 192 contracts with commercial stoppers noted as compared with 1145 contracts yesterday. For the weekly export sales report, released before the opening, traders are looking for sales near 650,000-1.0 million tons as compared with 565,300 tons last week.

Technical Outlook

WHEAT (MAY) 03/04/04: Short-term indicators on the defensive. Consider selling an intraday bounce. The swing indicator gave a moderately negative reading with the close below the 1st support number. Look for near-term support at 373 and below there at 371 1/4, with resistance levels at 379 1/2 and 384 1/4. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 371 1/4.

LIVE CATTLE RECAP

3/3/2004

April cattle closed 0.75 higher at 78.32, 0.08 off the high of the day at 78.32 and 2.62 better than the day’s low of 75.70. The market drove sharply lower early in the session but higher beef prices and sharply higher cash market trade helped support the run to the highest level since December 26th. Cash traded at $85.00, up $3.00 on the week and well above the April futures which helped support the solid short-covering and new buying from commercial traders. Today’s estimated slaughter came in at 117,000 head versus guesses ranging from 125,000 to 128,000. For the week, slaughter has reached 362,000 head vs. 351,000 last week and 368,000 last year at this time. Boxed beef cutout values were up $.78 to $139.33 as compared with $131.87 last week at this time.

Technical Outlook

CATTLE (APR) 03/04/04: Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 80.40. A positive setup occurred with the close over the 1st swing resistance. Support should be encountered at 76.97 and below there at 75.00. Market resistance is at 79.67 and then again at 80.40. The outside day up and close above the previous day’s high is a positive signal. The daily closing price reversal up is positive. 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

3/3/2004

April hogs closed 192 lower on the session as cash market disappointment and concerns with the hefty premium of futures over cash helped trigger active selling from speculators. Traders were looking for higher cash markets but when cash traded steady, and there was talk of potentially weaker pork values ahead, the sellers were active from the opening bell. Today’s estimated slaughter came in at 387,000 head versus guesses ranging from 382,000 to 388,000. The 2-day Lean index for the period ending March 1st was 62.03, up 0.30 from the previous day. Weekly average weights from Iowa/Minnesota for the week ending February 28th were reported at 265.9 pounds, up 1.3 pounds from the previous week and up 3.4 pounds from last year. The 5-year average is near 261 pounds. While traders had believed that producer marketings were slowing down last week, the data shows that producers may have been holding back hogs for higher prices. Pork cut-out values were down 58 cents to $68.25 as compared with 67.39 last week at this time.

Technical Outlook

HOGS (APR) 03/04/04: The market is in a bearish position with the close below the 2nd swing support number. Resistance levels comes in at 61.57 and 62.57 today, while support is around 60.20 and then 59.82. The gap down on the day session chart is bearish with more selling pressure possible today. 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 59.82.

COCOA MARKET RECAP

3/3/2004

May cocoa gapped lower on producer & fund sales with the market set to test $1,450 this week. Industry buying slowed the decline. The reversal in the Dollar with the currency likely making a major bottom is another negative. However, more political unrest could be brewing in the Ivory Coast a rebel leaders are getting impatient for political reforms to be implemented.

Technical Outlook

COCOA (MAY)03/04/04 The gap lower price action on the day session chart is a bearish indicator for trend. The close below the 1st swing support could weigh on the market. Cocoa should run into resistance at 1505 and above there at 1519 with support at 1477 and 1463. The daily stochastics have crossed over down which is a bearish indication. The next downside target is 1462.50. Short-term indicators on the defensive. Consider selling an intraday bounce.

COFFEE MARKET RECAP

3/3/2004

July coffee gapped lower and below the 40-day moving average on the opening and closed 185 lower on the session and down 325 for the week. Fund long liquidation selling was noted in the pit as rising exchange stocks and perceived good weather in Brazil combined with the lowest close for the year for London May futures helped to pressure the market. Roaster buying was seen as light on the break and roasters do not seem to see any urgency to book foreword needs given the weak price action. CSCE stocks were up 5172 bags to 4.517 million with 182,433 bags pending review. The surge in “pending” stocks this week suggests rising exchange stocks for the coming week.

Technical Outlook

COFFEE (MAY)3/4/04 The gap lower price action on the day session chart is a bearish indicator for trend. There could be some early pressure today given the market’s negative setup with the close below the 2nd swing support. The daily stochastics have crossed over down which is a bearish indication. The next downside objective is now at 71.60.The Coffee contract should run into resistance at 74.40 and above there at 75.40 with support at 72.5 and 71.60. 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.

SUGAR MARKET RECAP

3/3/2004

May sugar closed 10 lower on the session and near the low end of a 16 point range. The market tested Tuesday’s highs before encountering new selling from trade houses and the failure to move through the highs triggered a steady flow of long liquidation selling from the speculator. Trade sentiment remains very negative with talk of the potential record crop in Brazil and continued weak demand from importers due to high freight rates. The surge in the dollar means that Brazil exporters are bringing in more money for their export activity and may have also been a factor to pressure markets. The pent-up demand from end user buyers suggests that cash activity could pick-up quickly on a minor correction. Ukraine imports in January fell to 54,400 tonnes as compared with 84,800 tonnes in December and 61,200 tonnes in November.

Technical Outlook

SUGAR (MAY) 03/04/04: The market is in a bearish position with the close below the 2nd swing support number. Swing resistance comes in at 6.26, with support found at 5.94. The market’s short-term trend is negative as the close remains below the 9-day moving average. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 6.26.

COTTON MARKET RECAP

3/3/2004

May cotton closed 71 lower on the session at 70.02 but th3e close was below the opening and 132 points off of the lows. At the lows, trade house buying provided support after a 520 point break off of Monday’s highs. Speculative selling drove the market lower early in the session but trade house buying provided support ahead of the weekly export sales report in the morning. Traders are looking for sales near 150,000-200,000 bales as compared with 198,800 bales last week. Shipments are expected to come in near 200,000-250,000 bales as compared with 271,800 bales last week. Weakness in other New York markets, strength in the dollar and mixed new on the economy helped to keep this weeks long liquidation selling trend in tact.

Technical Outlook

COTTON (MAY) 03/04/04: 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 71.37 and then again at 72.74, while support is targeted at 68.67 and 67.34. The daily stochastics have crossed over down which is a bearish indication. The next downside target is 67.34. ORANGE JUICE (MAY)3/4/04 The gap upmove on the day session chart is a bullish indicator for trend. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Orange Juice should run into resistance at 64.10 and above there at 64.60 with support at 63.30 and 63.00. The market’s short-term trend is positive on a close above the 9-day moving average. Daily stochastics are showing positive momentum from oversold levels which should reinforce a move higher if near-term resistance is taken out. The near-term upside objective is at 64.6.