Treasuries Impressive…

Technical Outlook

#BONDS (SEP) 06/22/04: 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. Near-term resistance for bonds is at
105.22 and then again at 105.28, while swing support hits at 105.03 and below
there at 104.22. 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 105.28.

T-NOTES(SEP) The upside closing price reversal on
the daily chart is somewhat bullish. Momentum studies are trending higher, but
have entered overbought levels. The near-term upside objective is at 108.31.
With the close over the 1st swing resistance number, the market is in a
moderately positive position. Near-term resistance for the T-Notes is at 108.27
and then again at 108.31, while swing support hits at 108.13 and below there at
108.03. The market’s short-term trend is positive on a close above the 9-day
moving average. Consider buying pull-backs since daily studies are bullish.

 

STOCK INDICES RECAP

6/21/2004

Another session of underperformance as the stock
market barely managed to replicate the gains seen in international markets
overnight. Even after Walgreen’s earnings came in better than expected and
Wachovia confirmed a buyout effort of Southeast. One would also have expected
equity prices to be cheered on by sharp declines in energy prices but many in
the trade are still concerned about what might happen to energy prices over the
coming weeks. Talk that merger and acquisition interest might pick up didn’t
really inspire additional buyers but that issue should continue to offer
underlying support.

Technical Outlook

#S&P500 (SEP) 06/22/04: The market’s close below
the 1st swing support number suggests a moderately negative setup for today.
Underlying support comes in at 1124.10 and 1121.40, with overhead resistance at
1133.90 and 1141.00. 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 1121.40. Daily studies pointing down suggests
selling minor rallies.

S&P E-Mini (SEP): Momentum studies trending lower
at mid-range could accelerate a price break if support levels are broken. The
next downside objective is 1120.50. The market tilt is slightly negative with
the close under the pivot. Near-term resistance for the S&P Mini is at 1134.75
and then again at 1142.50, while swing support hits at 1123.75 and below there
at 1120.50. A positive signal for trend short-term was given on a close over the
9-bar moving average.

NASDAQ (SEP) 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 1469.75 and above there at
1484.88 with support at 1447.25 and 1439.88. Negative momentum studies in the
neutral zone will tend to reinforce lower price action. The next downside target
is 1439.9.

MINI DOW (SEP) The downside closing price
reversal on the daily chart is somewhat negative. 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 10404 and above there at 10472 with support
at 10308 and 10280. 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 10280. It is a slightly
negative indicator that the close was lower than the pivot swing number.

 

CURRENCY MARKET RECAP

6/21/2004

The Dollar maintained a tight range Monday
despite generally upbeat macro economic conditions. Only the Yen was able to
maintain mostly higher action against the Dollar but it is clear that the market
lacks a clear cut opinion on the direction of the Dollar. With the coming week
presenting a very thin economic report slate it might be difficult to get prices
out of the established trading range. The weakest currency of the day was the
Pound which was probably unwinding some long positions built in last week.

Technical Outlook

#CURRENCIES 06/22/04: YEN (SEP): 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. Swing resistance is targeted at 92.47 and above there
at 92.80, with the yen finding support around 92.00 and below there at 91.86.
Studies are showing positive momentum, but are now in overbought territory so
some caution is warranted. The next upside target is 92.80.

EURO (SEP): 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 1.2043. The market is in a bearish position
with the close below the 2nd swing support number. Swing support for the Euro
comes in at 1.2043, with overhead resistance at 1.2121. The market’s short-term
trend is positive on a close above the 9-day moving average. The gap down on the
day session chart is bearish with more selling pressure possible today.

 

PRECIOUS METALS RECAP

6/21/2004

Both gold and silver were sloppy Monday in the
face of only minor gains in the Dollar and that is disappointing to the bull
camp. With stronger world equity prices and sagging energy prices it almost
seemed like some flight to quality buyers were liquidating positions. The fact
that many traders seemed to be upbeat on the prospect of ongoing Chinese demand
for metals would normally have lifted prices but the trade was unmoved.
Therefore, the gold and silver markets seem to be vulnerable to selling but
probably won’t see a broad based liquidation unless the Dollar manages a rise
above 90.20.

Technical Outlook

#P-METALS 06/22/04: SILVER (SEP): The close under
the 40-day moving average indicates the longer-term trend could be turning down.
The close below the 2nd swing support number puts the market on the defensive.
Initial support for silver is at 571.5 and below there at 556.8 with resistance
likely at 593.1 and 604.5. 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 593.1. 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.

GOLD (AUG): Support for gold today comes in near
390.45, while resistance is pegged at 399.65. 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 399.65. 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. The daily closing
price reversal down puts the market on the defensive.

 

COPPER MARKET RECAP

6/21/2004

The copper market managed a fleeting rally Monday
but ended up weak despite a series of favorable broad based macro economic
developments. In other words, the copper market doesn’t seem to be getting as
much support from the demand front even though several stories were floated
Monday about Chinese demand for many commodities remaining strong in the years
ahead. Apparently the trade is unwilling to pay up for copper until there is
real evidence of improving Chinese physical demand.

 

ENERGY MARKET RECAP

6/21/2004

The energy complex opened weaker on news that
Iraqi oil flow was restarting. The fact that the strike in Norway is expected to
escalate would seem to be a fresh support to the market but it is clear that the
bear camp is mostly in control of prices. On going mild US temps seem to be
deflating optimism in natural gas and with the small spec long position rather
large one should not rule out technical stop loss selling on the violation of
key chart support points. News that Libya would jack up production to 1.62
million barrels per day in June also gave the bear camp an additional measure of
control. As if the market wasn’t getting enough bearish news there was also talk
that Non OPEC producers would respond to OPEC’s call for more production but we
hardly think that Russia needed a request from OPEC to raise their output.

Technical Outlook

#ENERGIES 06/22/04: CRUDE OIL (AUG): The major
trend is down with the cross over back below the 40-day moving average. The
outside day down is a negative signal. The daily closing price reversal down
puts the market on the defensive. The market is in a bearish position with the
close below the 2nd swing support number. Support for crude is keyed on 37.02
and below there at 36.58, with resistance pegged at 38.53 and 39.60. 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 39.60.

UNLEADED GAS (AUG): Daily stochastics are showing
positive momentum from oversold levels which should reinforce a move higher if
near-term resistance is taken out. The next upside target is 119.98. The close
below the 2nd swing support number puts the market on the defensive. Resistance
today is at 119.98, while support should be found around 112.58. The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative.

HEATING OIL (AUG): The market is in a bearish
position with the close below the 2nd swing support number. Heating oil should
encounter support around 97.27, with resistance is at 104.87. 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 104.87.

 

CORN MARKET RECAP

6/21/2004

Weak export shipment news helped keep July corn
buyers quiet while short-covering supported the bounce in December futures. The
market came under increased speculative selling early in the session as the
weather forecast does not include too much rain or does not include heat which
are a few of the factors which might slow progress towards record high yields.
Weekly export inspections came in at just 29.5 million bushels as compared with
30-40 million expected. Cumulative shipments have reached 1.478 billion bushels
as compared with 1.183 billion last year at this time. Shipments need to come in
near 50 million per week to reach projections. Traders believe tonight’s weekly
crop progress report could show conditions unchanged from last week but traders
are fearful that normal precipitation and cool weather in the forecast this week
will help boost growth and support better ratings next week. December corn
support comes in at 276 and 274 3/4 with 288 1/4 and 290 3/4 as resistance.

Technical Outlook

#CORN (DEC) 06/22/04: Daily stochastics are
trending lower, but have declined into oversold territory. The next downside
objective is now at 273 1/2. The market’s close above the 2nd swing resistance
number is a bullish indication. Market resistance comes in at 288 1/2 today,
with support at 273 1/2. 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

6/21/2004

The July contract led the recovery on continued
concerns for a tightening stocks situation ahead of the delta soybean harvest
and continued interest in bull spreads. Traders are also hopeful that China will
return to book more US soybeans soon as Brazil exports look to turn more active
over the near-term. A Brazil state governor this morning indicated that China
had suspended its ban on Brazil imports and that all of the banned 23 Brazil
companies can now resume export activity. There were indications that the
quality issues were resolved with Brazil agreeing to tighter quality standards.
News that an Argentina cargo may have been rejected for quality issues adds to
the confusion but the Brazil news is seen as positive. The surge higher in palm
oil overnight and continued tightness in the meal market helped support the
rally in the products. Weekly export inspections came in at 6.06 million bushels
as compared with 2-5 million expected. Cumulative shipments have reached 821.5
million bushels as compared with 973.3 million last year at this time. Traders
expect this afternoons weekly crop progress report to show that crops rated in
good to excellent condition improved by 1-2% in the past week. Support for
November soybeans comes in at 666 and 659 with 684 1/4 and 694 as resistance.

Technical Outlook

#SOYBEANS (NOV) 06/22/04: The outside day up and
close above the previous day’s high is a positive signal. The daily closing
price reversal up is positive. A positive setup occurred with the close over the
1st swing resistance. The next area of resistance is around 691 1/2 and 699 3/4,
while 1st support hits today at 666 1/2 and below there at 649 3/4. The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The daily stochastics have crossed over up which is a bullish
indication. The next upside target is 699 3/4. Short-term indicators suggest
buying dips today.

MEAL (DEC): 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 216.8. The outside
day up is a positive signal. The upside closing price reversal on the daily
chart is somewhat bullish. First resistance comes in at 214.8, with support at
208.6. The market’s short-term trend is positive on a close above the 9-day
moving average. With the close over the 1st swing resistance number, the market
is in a moderately positive position. Consider buying pull-backs since daily
studies are bullish.

BEAN OIL (DEC): 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 24.03. A positive setup occurred with the close over the 1st
swing resistance. Daily swing resistance is found at 24.50 and above there at
24.63. Support should be encountered at 24.20 and 24.03.

 

WHEAT MARKET RECAP

6/21/2004

With many areas of Kansas experiencing 2-4 inches
of rain in the past week, the market found support from slow harvest and from
quality issues. The slowdown in commercial selling due to heavy rains across
Kansas overnight helped support the early bounce once the other grains did not
fall apart as expected. Weekly export inspections came in at 16.3 million
bushels as compared with 15-22 million expected. Cumulative shipments have
reached 47.3 million bushels as compared with 39.03 million last year at this
time. In the report, China shipped 52,500 tons of US wheat last week which was
seen as supportive. Forecasts for drier weather helped to move the market down
early in the session but quality problems are a concern and with more rains in
the eastern cornbelt this week, outbreaks of head scab in Ohio are a major
concern. Basis levels were steady due to slow harvest. Traders are looking for a
1-2% decrease in the good to excellent ratings for tonight’s weekly crop
progress report. September wheat support comes in at 359 1/2 with 370 and 373
3/4 as next resistance.

Technical Outlook

#WHEAT (DEC) 06/22/04: The outside day up and
close above the previous day’s high is a positive signal. The daily closing
price reversal up is positive. A positive setup occurred with the close over the
1st swing resistance. Look for near-term support at 369 and below there at 363
3/4, with resistance levels at 378 and 381 3/4. 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 363 3/4.

 

LIVE CATTLE RECAP

6/21/2004

The market opened lower in response to the
bearishly construed USDA report on Friday afternoon but strength in the pork
complex and uncertainty over cash cattle trade this week helped support some
short-covering and local buying based on “fade the report” buying from the
locals who traditionally search for stops in the opposite direction of the
opening call on the day after a report. Boxed beef cut-out vales (for choice
600-750lbs) fell $.76 to $144.57 at mid-session as compared with $151.29 last
week at this time. Cash cattle were offered at $87 to $90 with no bids in sight
after the bulk of the trade at $87 last week. The sharp drop in packer profit
margins on the week could trigger slower packer demand to slaughter this week
and bids should come in lower. Talk of a near-term low in beef prices after
recent sharp losses added to the positive tone.

Technical Outlook

#CATTLE (AUG) 06/22/04: Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
86.42. With the close higher than the pivot swing number, the market is in a
slightly bullish posture. Support should be encountered at 86.90 and below there
at 86.42. Market resistance is at 87.85 and then again at 88.32. The market’s
close above the 9-day moving average suggests the short-term trend remains
positive.

 

LEAN HOGS RECAP

6/21/2004

The market pushed sharply higher early in the
session due to strong cash markets and hopes of bullish news in the cold storage
report this afternoon. July hogs moved to a new contract high early in the
session but the close below the opening and sharply down from the highs of the
day could leave futures vulnerable to short-term technical selling. July bellies
opened higher and closed moderately lower on the session. Cash markets were at
least $1.00 higher at most locations. The market is anticipating bullish news
for the monthly Cold storage report which might show belly stocks at or near the
smallest on record for the end of May and ham stocks near 11-year lows. Trade
estimates for the Monthly Cold Storage report call for 41-44 million pounds of
frozen pork bellies in storage. This would be down from 46.109 million last
month and 45.87 million a year ago. The 2-day lean index for the period ending
June 17th was 79.14, down 11 cents from the previous session but up from 78.86
the previous week.

Technical Outlook

#HOGS (AUG) 06/22/04: The market’s close below
the pivot swing number is a mildly negative setup. Resistance levels comes in at
77.05 and 78.07 today, while support is around 75.62 and then 75.22. The rally
brought the market to a new contract high. The daily closing price reversal down
puts the market on the defensive. 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 75.22.

 

COCOA MARKET RECAP

6/21/2004

The cocoa market showed only fleeting reaction to
the ongoing political tension at the Ivory Coast. Apparently almost a dozen were
killed in the North but the UN is present and that is tempering the impact on
cocoa prices. However, with prices forging an inside down and mostly holding
just above the prior days low it would not seem like the speculative crowd is
anxious to bid up prices off the tension issue. With the ongoing sideways
consolidation it should be noted that the spec short position has moderated and
that could eventually clear the way for another downside thrust.

Technical Outlook

COCOA (SEP) 06/22/04 The market tilt is slightly
negative with the close under the pivot. Cocoa should run into resistance at
1360 and above there at 1369 with support at 1342 and 1333. Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
1332.50.

 

COFFEE MARKET RECAP

6/21/2004

September Coffee closed sharply lower and in fact
managed to fall through several critical technical levels on the charts. The
fact that the market was still holding an overly long small spec and fund
position clearly provides the potential for more long liquidation especially if
weather in Brazil remains bearish. With weather forecasts mostly ruling out the
threat of frost through the coming weekend we can understand why the small specs
and funds are rushing to the sidelines. In order to extract the May weather move
from prices the September contract would have to decline to the 73 to 71 level.
Minor roaster buying was unable to discourage the seller which is evidence that
the weather is pretty dominating.

Technical Outlook

COFFEE (SEP) 6/22/04 There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. Momentum studies are declining, but have fallen to oversold
levels. The next downside objective is now at 73.60. The Coffee contract should
run into resistance at 77.50 and above there at 79.30 with support at 74.65 and
73.60. 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

6/21/2004

October sugar managed another large range and
managed to close within proximity to contract highs. The sugar market continues
to get spillover support from the idea that sugar will be used increasingly in
ethanol production. Unfortunately sugar has reached recent lofty price levels on
rather heavy small spec and fund buying and that might eventually rob the market
of future buying power. However, it should be noted that sugar was supposedly
lifted Monday by trade and commercial buying and that might give the market an
even more consistent source of buying in the future. So far, volume and open
interest haven’t ramped up and that might suggest that the market has more
upside capacity.

Technical Outlook

#SUGAR (OCT) 06/22/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Swing resistance
comes in at 7.99, with support found at 7.13. The market’s short-term trend is
positive on a close above 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 7.13.

 

COTTON MARKET RECAP

6/21/2004

Cotton gapped down and didn’t really manage to
impress anyone with its action Monday. Despite the fact that volume and open
interest are falling off rapidly there is really little fundamental reason to
suspect a major bottom. Weather continues to be negative, demand expectations
are negative and with the small specs still recently holding a net long one
can’t suggest that the technical condition argues for a bottom. In fact, most
traders expect a fresh cycle of bearish information this coming Thursday from
the supply and demand front. Traders continue to see expectations for improved
Chinese production and with cotton in dry land areas doing good there is little
reason to speculate on a bottom.

Technical Outlook

#COTTON (OCT) 06/22/04: 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.
Next resistance area comes in at 53.31 and then again at 54.26, while support is
targeted at 51.81 and 51.26. Momentum studies are declining, but have fallen to
oversold levels. The next downside target is 51.26. The 9-day RSI under 30
indicates the market is approaching oversold levels. The sell-off took the
market to a new contract low. The gap lower price action on the day session
chart is a bearish indicator for trend.