This Was Today’s Most Significant Move

Technical Outlook

BONDS (DEC) 10/28/03: It is a slightly negative indicator that the close was lower than the pivot swing number. Near-term resistance for bonds is at 109.09 and then again at 109.20, while swing support hits at 108.16 and below there at 108.02. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 109.20.

T-NOTES(DEC) 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 113.01. 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 112.26 and then again at 113.01, while swing support hits at 112.12 and below there at 112.05. The market’s short-term trend is positive on a close above the 9-day moving average.

STOCK INDICES RECAP

10/27/2003

The stock market started out with a positive lift from the merger talk among banking and health related stocks and even saw favorable existing home sales reading but in the end the market was unable to attract significant buying interest and extend the early rally. One would have to grant that sentiment indicators are a little more favorable than last week but yet volume seems to be lighter. Seeing lackluster volume on the rally has to be disappointing to the bull camp in stocks. However, the trade is emboldened by the hope for favorable durable goods and consumer confidence numbers due out on Tuesday.

Technical Outlook

S&P500 (DEC) 10/28/03: It is a mildly bullish indicator that the market closed over the pivot swing number. Underlying support comes in at 1025.90 and 1022.00, with overhead resistance at 1035.10 and 1040.40. The market’s short-term trend is negative as the close remains below the 9-day moving average. 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 1022.00.

S&P E-Mini (DEC): The market made a new contract high on the rally. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 1021.75. The market has a slightly positive tilt with the close over the swing pivot. Near-term resistance for the S&P Mini is at 1035.25 and then again at 1040.75, while swing support hits at 1025.75 and below there at 1021.75. A negative signal for trend short-term was given on a close under the 9-bar moving average.

NASDAQ (DEC) The market’s close below the 9-day moving average is an indication the short-term trend remains negative. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The market should run into resistance at 1386.50 and above there at 1395.75 with support at 1368.50 and 1359.75. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 1359.8.

CURRENCY MARKET RECAP

10/27/2003

The Dollar opened strong but was then unable to move much in either direction. The most significant move during the session was forged by the Yen, which seemed to be prepared to run to a new high for the move. It is a little telling that favorable US economic information and a higher US stock market didn’t give the Dollar a bigger boost. In other words, the long contingent in the Dollar doesn’t seem to be primed to expand rapidly even with macro economic information comes in favoring the Dollar. Maybe some traders were moving to the sidelines ahead of the FOMC meeting but the odds seem to be very low that the US will move to change its interest rate structure.

Technical Outlook

YEN (DEC): The market’s close above the 9-day moving average suggests the short-term trend remains positive. The gap upmove on the day session chart is a bullish indicator for trend. 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 92.43 and above there at 92.62, with the yen finding support around 92.10 and below there at 91.96. The daily stochastics have crossed over up which is a bullish indication. The next upside target is 92.62.

EURO (DEC): 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 1.1784. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.1680, with overhead resistance at 1.1784. 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

10/27/2003

The gold and silver markets started weak and then managed to forge a slight bounce. The US Dollar gave ground off its high of the day and that served to pull in some fresh buyers into the precious metals markets. The market was somewhat put off by the magnitude of the small spec and fund long in gold. The silver market would seem to maintain a slight leadership edge and that could be because of the slightly improved equity market performance Monday morning. The Dollar continues to be the main driving force in the gold market and silver markets.

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 515.7 and below there at 511.4 with resistance likely at 519.1 and 522.7. 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 519.1. The daily closing price reversal up is positive.

GOLD (DEC): Support for gold today comes in near 385.23, while resistance is pegged at 390.63. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 390.63. 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

10/27/2003

The copper market managed to right the ship after the US stock market showed recovery signs and apparently China wasn’t prepared to sell into the market two straight days in a row. BHP did announce the permanent closing of a US copper Mining facility, which had a capacity of 330,000 metric tons per year. Just seeing the LME and Chinese markets hold steady, apparently gave the bulls an impetus to snap up some value and that eventually evolved into a stop loss-buying binge. It would seem that soaring copper prices are simply not deterring the buyers, especially since big interday gains are simply met with fresh market orders.

ENERGY MARKET RECAP

10/27/2003

The energy complex fought off early weakness probably because the increased frequency of attacks inside Iraq. Prices seemed to be weak early because of muted fall demand patterns and because the outlook toward the economy wasn’t that solid. The OPEC basket price managed to hold above $28 and the count down to the 20-day rule continues. Apparently significant weakness in natural gas prices managed to pressure the regular energy complex on Monday. Fostering the negative attitude Monday were suggestions that a strong cold front might present itself in Idaho and Montana. Seeing winter like conditions might foster renewed talk of above normal heating demand in the coming winter.

Technical Outlook

CRUDE OIL (DEC): The market’s close below the pivot swing number is a mildly negative setup. Support for crude is keyed on 29.66 and below there at 29.41, with resistance pegged at 30.19 and 30.47. The market’s close on the 9-day moving average is neutral. . With a reading under 30, the 9-day RSI is approaching oversold levels.

UNLEADED GAS (DEC): Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 79.51. It is a slightly negative indicator that the close was lower than the pivot swing number. Resistance today is at 83.51, while support should be found around 79.51. The moving average crossover down (9 below 18) indicates a possible developing short-term downtrend.

HEATING OIL (DEC): The market’s close below the 1st swing support number suggests a moderately negative setup for today. Heating oil should encounter support around 80.23, with resistance is at 83.23. Daily studies pointing down suggests selling minor rallies. The downside crossover (9 below 18) of the moving averages suggests a developing short-term downtrend. Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 80.23.

CORN MARKET RECAP

10/27/2003

After a sharp early rally Monday prices gave back all the gains into the close. Massive export inspections (real shipments!) of corn came in at 37.66 million bushels versus 33.4 million bushels last week. Expectations for corn shipments were for 32-37, which means that the export flow was even better than the lofty expectations. Argentine corn plantings for 2003-2004 were 42% planted as of October 24th and that is still markedly below last years pace. So far, the US corn rally is mostly dependant on the world protein situation and China and hasn’t given too much consideration to the Argentine corn crop. The market is mostly expecting the Argentine production to mirror the prior season. The USDA also announced a moderate export sale of 112,000 metric tons to an unknown destination early Monday and that probably added to the markets long side interest. If the funds were really interested in corn they would be rushing at the market more aggressively. Some traders think that the funds have only balanced a net short position and have only recently shifted into a net long standing.

Technical Outlook

CORN (DEC) 10/28/03: Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 244 1/2. It is a mildly bullish indicator that the market closed over the pivot swing number. Market resistance comes in at 244 1/2 today, with support at 229 1/2. The market’s short-term trend is positive on a close above the 9-day moving average. With a reading over 70, the 9-day RSI is approaching overbought levels.

SOY COMPLEX RECAP

10/27/2003

After a very aggressive rally on the opening the soybean market gave up the majority of the early gains into the close. Actual export shipments in soybeans came in at a whopping 45.07 million compared to the prior week of 24.9 million bushels. The estimates for the shipments came in at 25-30 million bushels so the actual shipment is pretty impressive. So far the trade doesn’t get the sense that high prices are knocking any demand away and therefore the bull camp continues to dominate. Countervailing the bullish demand news into China were negative implications for new crop beans, as another Brazilian source pegged the 2003-2004 crop to be up by 12%. In the near term beans only need to see continued interest from China and prices will continue to soar.

Technical Outlook

SOYBEANS (JAN) 10/28/03: A new contract high was made on the rally. The downside closing price reversal on the daily chart is somewhat negative. It is a slightly negative indicator that the close was lower than the pivot swing number. The next area of resistance is around 774 and 789 , while 1st support hits today at 753 and below there at 747 . 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 747 . The 9-day RSI over 70 indicates the market is approaching overbought levels.

MEAL (DEC): Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 247.0. The rally brought the market to a new contract high. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session. First resistance comes in at 243.5, with support at 238.9. 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 (DEC): The market’s close below the 9-day moving average is an indication the short-term trend remains negative. 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 25.10. The close below the 2nd swing support number puts the market on the defensive. The new contract high and close below the previous day’s low constitutes a key reversal which is a bearish signal. The outside day down and close below the previous day’s low is a negative signal. A new contract high was made on the rally. The downside closing price reversal on the daily chart is somewhat negative. Daily swing resistance is found at 26.82 and above there at 27.76. Support should be encountered at 25.49 and 25.10.

WHEAT MARKET RECAP

10/27/2003

After a sharp early rally prices slacked off aggressively into the close. Export shipments of wheat came in at 19.4 million bushels compared to 17 to 22 million expected but it would seem that the market wasn’t able to hold the early highs. The weather forecast in wheat released Sunday night called for above normal precipitation in the wheat growing regions and that probably sparked some profit taking among the longs after the opening. Apparently the funds were heavy sellers around the highs Monday and that seemed to pull the legs out from under the market. It should be noted that wheat prices in European remained strong for most of that session, which could mean that a delayed sell off might be seen in Europe on Tuesday morning.

Technical Outlook

WHEAT (DEC) 10/28/03: The downside closing price reversal on the daily chart is somewhat negative. It is a slightly negative indicator that the close was lower than the pivot swing number. Look for near-term support at 359 and below there at 353 1/2, with resistance levels at 375 1/2 and 386 1/2. 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 386 1/2.

LIVE CATTLE RECAP

10/27/2003

December cattle closed 155 higher on the session and is now up 500 points from Thursday’s lows. While there was no trade in the cash market, traders are optimistic of higher cash this week due to sharply reduced showlist and still low weights of market-ready cattle. The tight supply of market-ready cattle remains the driving force in the cash market and the drop in beef production is becoming more and more pronounced with weekly production down more than 12% last week and more than 13% the previous week. Slaughter was only 112,000 head as compared with 118,000-126,000 head expected and 131,000 head last year. Boxed-beef cut-out values were down $2.39 to $177.35. In the panhandle, feedlots were offering cattle at $105-$110 with no bids reported as compared with $98 traded late last week.

Technical Outlook

CATTLE (DEC) 10/28/03: Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 89.32. 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. Support should be encountered at 90.57 and below there at 89.32. Market resistance is at 92.27 and then again at 92.75. The moving average crossover down (9 below 18) indicates a possible developing short-term downtrend.

LEAN HOGS RECAP

10/27/2003

December hogs closed 12 higher on the session in choppy, two-sided trade. Cash markets were .50-$1.00 higher as compared with expectations for lower trade early this week which helped provide some underlying support. The rally was limited by fears that slaughter levels will continue to come in above expectations from recent USDA reports. Slaughter last week was up 2.6% from last year as compared with trade expectations near 1-2% below last years pace. Slaughter for the day was 394,000 head as compared with trade expectations at 388,000-390,000 head.

Technical Outlook

HOGS (DEC) 10/28/03: The market’s close below the pivot swing number is a mildly negative setup. Resistance levels comes in at 53.15 and 53.67 today, while support is around 52.00 and then 51.37. The upside closing price reversal on the daily chart is somewhat bullish. The downside crossover (9 below 18) of the moving averages suggests a developing short-term downtrend. Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 51.37.

COCOA MARKET RECAP

10/27/2003

Cocoa prices were slightly weaker Monday in the US and only slightly lower in London. For a change the Pound was pretty quiet which might have reduced the interest in arbitrage activity. It seems that initial price gains were pared aggressively by origin selling, which is to be expected as we move into the harvest season. One can almost expect hedge selling to surface on a regular basis especially since there are reports now of increasing physical cocoa flow into main Ivory Coast ports. The period of highest supply is upon the market with the question being can demand offset that pressure or will prices end up sliding back to the recent lows.

Technical Outlook

COCOA (DEC)10/28/03 The downside closing price reversal on the daily chart is somewhat negative. The market tilt is slightly negative with the close under the pivot. Cocoa should run into resistance at 1439 and above there at 1461 with support at 1402 and 1387. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 1461.25.

COFFEE MARKET RECAP

10/27/2003

An aggressive rally in coffee would seem to suggest that something significant is afoot. With roasters also buying in the action Monday the idea that something has changed is given even more credence. The Press reported that fund buyers were more than likely the brunt of the buyers. Record open interest in coffee would also seem to suggest that something major is unfolding. We would think that December coffee would be able to return to the late September high of 66.25 before it encounters significant overhead resistance.

Technical Outlook

COFFEE (DEC)10/28/03 The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. 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 66.10.The Coffee contract should run into resistance at 65.50 and above there at 66.10 with support at 63.65 and 62.40. The market’s short-term trend is positive on a close above the 9-day moving average. The major trend could be turning up with the close back above the 40-day moving average.

SUGAR MARKET RECAP

10/27/2003

The March sugar managed an upside breakout of a long consolidation pattern and that could spark some stop loss buying from a massively short fund position. With the funds short 42,000 contracts its understandable that a move above chart resistance sparked an aggressive buying wave. Many traders don’t think that the trend turns up in the March contract until the market manages a close back above 626. The weekly reversal from a new low in the London market really seemed to foster a number of bottom forecasts into the US opening this morning. The USDA attach‚ in Russia suggested that imports into that country should continue to decline and that is bearish.

Technical Outlook

SUGAR (MAR) 10/28/03: It is a mildly bullish indicator that the market closed over the pivot swing number. Swing resistance comes in at 6.38, with support found at 6.00. The market’s short-term trend is positive on a close above the 9-day moving average. The major trend could be turning up with the close back above the 40-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 6.38.

COTTON MARKET RECAP

10/27/2003

December cotton managed a new high move but really didn’t manage to hold all of the gains on the session. While Chinese prices were strong and are expected to remain strong it should be noted that short-term technicals are extremely overbought. A number of technical systems projected a top at 83.20 basis the December contract and many might consider the action Monday as close enough to call a top. The Chinese impact on cotton should continue to be the main element of trade for the rest of the coming week.

Technical Outlook

COTTON (DEC) 10/28/03: The market’s close above the 9-day moving average suggests the short-term trend remains positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Next resistance area comes in at 82.90 and then again at 83.55, while support is targeted at 81.55 and 80.85. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 83.55. The 9-Day RSI over 90 suggests the market is extremely overbought. A new contract high was made on the rally.