Was Today’s Massive Rally In The Pound Overdone?

Technical Outlook

#BONDS (JUN) 04/02/04: The downside closing price
reversal on the daily chart is somewhat negative. The swing indicator gave a
moderately negative reading with the close below the 1st support number.
Near-term resistance for bonds is at 114.09 and then again at 114.31, while
swing support hits at 113.01 and below there at 112.15. 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 112.15. Short-term indicators on the defensive. Consider
selling an intraday bounce.

T-NOTES(JUN) The daily closing price reversal
down puts the market on the defensive. 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 114.11. 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 115.12 and then again at 115.26, while swing support hits at
114.20 and below there at 114.11. The market’s short-term trend is negative as
the close remains below the 9-day moving average.

 

STOCK INDICES RECAP

4/1/2004

The stock market continued to factor in an
optimistic view on the coming numbers and also continued to see generally
favorable information flow from the corporate front. It would seem that
investors are undaunted by the flow of Fed commentary directly ahead of the
report even with on Fed member suggesting that job growth is still amazingly
slow. In other words, the stock market is bullish and wants to see things
positively. However, another Fed member was quoted as saying the some imbalances
were beginning to build in the economy and that might hint at a good number
Friday.

Technical Outlook

#S&P500 (JUN) 04/02/04: With the close over the
1st swing resistance number, the market is in a moderately positive position.
Underlying support comes in at 1129.45 and 1123.83, with overhead resistance at
1137.75 and 1140.43. 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, but
have entered overbought levels. The near-term upside objective is at 1140.43.

S&P E-Mini (JUN): Rising stochastics at
overbought levels warrant some caution for bulls. The next upside objective is
1133.50. The market has a slightly positive tilt with the close over the swing
pivot. The market now above the 40-day moving average suggests the longer-term
trend is up. Near-term resistance for the S&P Mini is at 1133.25 and then again
at 1133.50, while swing support hits at 1132.75 and below there at 1132.50. A
positive indicator was given with the upside crossover of the 9 & 18 bar moving
average.

NASDAQ (JUN) Daily stochastics are showing
positive momentum from oversold levels which should reinforce a move higher if
near-term resistance is taken out. 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. The market should run into resistance at
1467.50 and above there at 1472.75 with support at 1449.50 and 1436.75. Studies
are showing positive momentum, but are now in overbought territory so some
caution is warranted. The next upside target is 1472.8. The cross over and close
above the 40-day moving average indicates the longer-term trend has turned up.

MINI DOW (JUN) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. The market should
run into resistance at 10406 and above there at 10440 with support at 10328 and
10284. Studies are showing positive momentum, but are now in overbought
territory so some caution is warranted. The next upside target is 10440. With
the close higher than the pivot swing number, the market is in a slightly
bullish posture.

 

CURRENCY MARKET RECAP

4/1/2004

The US numbers apparently weren’t strong enough
to discourage the selling in the Dollar, with some traders suggesting that the
US payrolls will have to force a change of sentiment. We have to think that the
massive rally in the Pound Thursday was a little overdone and that fundamentals
outside of the US are not so impressive that a host of currencies deserve to run
up aggressively against the Dollar. The Dollar was so weak Thursday that the
Canadian Dollar finally managed to de-link itself from the Dollar!

Technical Outlook

#CURRENCIES 04/02/04: YEN (JUN): The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. A new contract high was made on the rally. A positive setup occurred
with the close over the 1st swing resistance. Swing resistance is targeted at
96.82 and above there at 97.08, with the yen finding support around 96.35 and
below there at 96.14. Studies are showing positive momentum, but are now in
overbought territory so some caution is warranted. The next upside target is
97.08. The 9-day RSI over 70 indicates the market is approaching overbought
levels.

EURO (JUN): 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 1.2412. The market is in a
bearish position with the close below the 2nd swing support number. Swing
support for the Euro comes in at 1.2238, with overhead resistance at 1.2412. The
market’s short-term trend is positive on a close above 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

4/1/2004

The gold and silver markets surged higher early
Thursday but failed to hold all of the gains. The silver market however did
manage to hold most of the early gains and would appear to be poised for even
more gains in the coming sessions. So far it would not seem like the gold and
silver markets are that dependant on the upcoming US payroll report but we have
to think that the strong number would be more conducive to an extension of the
recent gains. Continued declines in the Dollar certainly help gold more than
silver but that issue apparently was a big issue in the action Thursday.

Technical Outlook

#P-METALS 04/02/04: SILVER (MAY): 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. Initial support for
silver is at 805.1 and below there at 793.5 with resistance likely at 815.0 and
824.6. 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
815.0. The 9-day RSI over 70 indicates the market is approaching overbought
levels. A new contract high was made on the rally. The gap upmove on the day
session chart is a bullish indicator for trend.

GOLD (JUN): Support for gold today comes in near
422.03, while resistance is pegged at 436.23. Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
436.23. It is a mildly bullish indicator that the market closed over the pivot
swing number. 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. The rally brought the market to a new contract high.

 

COPPER MARKET RECAP

4/1/2004

The copper market continued to rise alongside the
precious metals and would seem to be tracking the same fundamentals as the US
stock market. In fact, with the US Dollar falling apart, US copper prices are
becoming more attractive to international buyers of copper. It will still be
important for copper to get a good set of US numbers Friday morning as copper
prices around $1.40 a pound probably need pretty decent economic conditions to
extend the current rally. Many copper traders think that copper will be able to
discount a partially negative monthly US payroll number but it might really
depend of what the US stock market does tomorrow.

 

ENERGY MARKET RECAP

4/1/2004

The energy complex continued to sag Thursday and
might have been given a little downward press by comments from the Saudi Oil
Minister, who suggested that there was too much oil in the marketplace and that
prices were set to decline. The energy market also saw suggestions that US
Officials failed to contact Saudi Arabia regarding high oil prices. The US is
asking OPEC to reconsider the recent cut which seems to be a useless request
especially with many customers already reducing orders to OPEC producers. In
other words, declining seasonal demand stories are beginning to surface and that
might foster more price weakness.

Technical Outlook

#ENERGIES 04/02/04: CRUDE OIL (MAY): The major
trend is down with the cross over back below the 40-day moving average. The
market is in a bearish position with the close below the 2nd swing support
number. Support for crude is keyed on 33.31 and below there at 32.64, with
resistance pegged at 35.24 and 36.50. 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 32.64.

UNLEADED GAS (MAY): Negative momentum studies in
the neutral zone will tend to reinforce lower price action. The next downside
target is 100.57. The close below the 2nd swing support number puts the market
on the defensive. Resistance today is at 117.17, while support should be found
around 100.57. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative. The close under the 40-day
moving average indicates the longer-term trend could be turning down.

HEATING OIL (MAY): The market is in a bearish
position with the close below the 2nd swing support number. Heating oil should
encounter support around 79.71, with resistance is at 92.11. The downside
crossover (9 below 18) of the moving averages suggests a developing short-term
downtrend. The major trend is down with the cross over back below the 40-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 79.71. The outside day down is a negative signal. The daily closing price
reversal down puts the market on the defensive.

 

CORN MARKET RECAP

4/1/2004

Futures moved to new contract highs with nearby
contracts at the highest level in 7 1/2 years today. More talk that the market
needs to rally “now” if there is hope to steal acreage back from soybeans helped
support the market with new crop December corn leading the rally. The recovery
in soybeans added to the positive tone with a near race between the two markets
with December corn up nearly 14 cents ion the session before the late sell-off.
Weekly export sales came in at 700,900 tons as compared with trade estimates of
800,000-1.1 million tons. Old crop sales came in at 694,200 tons as compared
with 625,700 tons necessary each week to reach the USDA forecast. Cumulative
sales have reached 72.0% of the forecast for the season as compared with 68.9%
on average for this time of the year. In addition, the USDA announced a daily
sale of 165,000 tons of US corn to unknown destination. Overnight reports from
Indonesia that the country may be forced to import US corn this year due to a
lack of offers from China added to the positive tone. Fund buying reached at
least 7000 contracts on the session.

Technical Outlook

#CORN (MAY) 04/02/04: Momentum studies are
trending higher, but have entered overbought levels. The near-term upside
objective is at 335 3/4. The market’s close above the 2nd swing resistance
number is a bullish indication. Market resistance comes in at 335 3/4 today,
with support at 316 1/4. The upside crossover (9 above 18) of the moving
averages suggests a developing short-term uptrend. With a reading over 70, the
9-day RSI is approaching overbought levels. The rally brought the market to a
new contract high.

 

SOY COMPLEX RECAP

4/1/2004

The lack of significant long liquidation selling
from fund traders and talk of increased interest in soybeans and oil from China
overnight helped to provide support for the strong recovery rally. Ideas that
soybeans will need to keep up with corn in order to hold intended planted
acreage helped to support the market as well. Better than expected export sales
for the week and continued uncertainty on the size of the South American crops
added to the positive tone. Weekly export sales came in at 284,700 tons as
compared with trade estimates of 50,000-200,000 tons. Old crop sales came in at
174,700 tons as compared with 34,000 tons necessary each week to reach the USDA
forecast. Cumulative sales have reached 96.8% of the forecast for the season as
compared with 87.6% on average for this time of the year. Meal sales were 39,400
tons, in-line with expectations and oil sales were -2900 tons (cancellations).
Cumulative sales for meal have reached 83.8% of the forecast for the season as
compared with 71.1% on average for this time of the year. Taiwan bought 59,000
tons of Brazil soybeans overnight. A lack of new selling interest once minor
resistance levels were penetrated seemed to feed a bullish fever for soybeans
and products.

Technical Outlook

#SOYBEANS (MAY) 04/02/04: A positive setup
occurred with the close over the 1st swing resistance. The next area of
resistance is around 1045 1/2 and 1055 3/4, while 1st support hits today at 1013
1/2 and below there at 991 3/4. 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 991 3/4.

MEAL (MAY): The daily stochastics gave a bullish
indicator with a crossover up. The near-term upside objective is at 340.1. The
rally brought the market to a new contract high. First resistance comes in at
336.4, with support at 322.4. The market’s short-term trend is positive on a
close above the 9-day moving average. The market’s close above the 2nd swing
resistance number is a bullish indication. 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.
Momentum studies are declining, but have fallen to oversold levels. The next
downside target is 32.16. A positive setup occurred with the close over the 1st
swing resistance. Daily swing resistance is found at 33.06 and above there at
33.32. Support should be encountered at 32.48 and 32.16.

 

WHEAT MARKET RECAP

4/1/2004

Strength in the other grain markets and weather
concerns helped support the solid gains. The market found early support from
strength in soybeans, positive news regarding China demand and a slightly more
supportive weather forecast for the plains for the weekend. Rain amounts for the
weekend were downgraded overnight and there are still concerns for moisture in
the western plains. China’s state-run trading company COFCO will be exempt from
a 13% value-added tax on wheat imports which would suggest the need for
increased import activity. Weekly export sales came in at 289,300 tons as
compared with trade estimates of 300,000-500,000 tons. Old crop sales came in at
166,300 tons as compared with 219,800 tons necessary each week to reach the USDA
forecast. Cumulative sales have reached 93.3% of the forecast for the season as
compared with 86.1% on average for this time of the year. A slowdown in the fund
selling and in producer sales in the cash market which pressured the market
yesterday is helped support the market today. The EU sold 98,313 tonnes of
intervention wheat at their weekly tender and opened a tender to sell 167,308
tons of French wheat.

Technical Outlook

#WHEAT (MAY) 04/02/04: With the close higher than
the pivot swing number, the market is in a slightly bullish posture. Look for
near-term support at 404 and below there at 399, with resistance levels at 416
1/2 and 424. 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 424.

 

LIVE CATTLE RECAP

4/1/2004

Nearby cattle futures came under selling pressure
from speculators in what was considered profit-taking after recent strong gains.
June closed 57 lower on the session but near the middle of a 185 point range. A
lack of trade in the cash market with bids down to $78-$80 in the panhandle
helped to trigger the long liquidation selling. Cumulative slaughter for week
has reached 471,000 head as compared with 477,000 last week at this time and
499,000 head last year. Boxed-beef cut-out values were up 46 cents to $139.67 as
compared with $140.06 last week at this time. Talk that Taiwan is considering
lifting the ban on US beef soon helped support.

Technical Outlook

#CATTLE (JUN) 04/02/04: Positive momentum studies
in the neutral zone will tend to reinforce higher price action. The next upside
target is 77.52. The swing indicator gave a moderately negative reading with the
close below the 1st support number. Support should be encountered at 74.72 and
below there at 73.82. Market resistance is at 76.57 and then again at 77.52. The
downside closing price reversal on the daily chart is somewhat negative. The
market’s close above the 9-day moving average suggests the short-term trend
remains positive.

 

LEAN HOGS RECAP

4/1/2004

April hogs were under selling pressure from
weaker cash markets but July hogs moved higher and to new contract highs.
Commercial selling was noted as active in the April contract in spite of the
discount of futures to the cash. Open interest also reached a new all-time high.
Strength in bellies provided some support. Cash hogs were $1.00 lower at many
locations as supplies seem a little more plentiful than traders anticipated and
packer needs are mostly covered for the week. Cumulative slaughter for week has
reached 1.531 million head as compared with 1.519 million last week at this time
and 1.490 million head last year.

Technical Outlook

#HOGS (JUN) 04/02/04: The market’s close below
the pivot swing number is a mildly negative setup. Resistance levels comes in at
74.95 and 75.32 today, while support is around 73.85 and then 73.12. The
market’s short-term trend is positive on a close above the 9-day moving average.
Momentum studies are trending higher, but have entered overbought levels. The
near-term upside objective is at 75.32. With a reading over 70, the 9-day RSI is
approaching overbought levels.

 

COCOA MARKET RECAP

4/1/2004

The cocoa market failed Thursday and did so after
recent gains created some speculative fervor. The fact that origin sales were
detected in the market Thursday it is clear that some physical supply flow is
still flowing and that is certainly a negative for prices. We also think that
the violence condition has temporarily calmed and allows traders to come back in
and factor some of the recent surplus forecasts that were lost in the volatility
early in the week.

Technical Outlook

COCOA (MAY) 04/02/04 The downside closing price
reversal on the daily chart is somewhat negative. The close below the 1st swing
support could weigh on the market. Cocoa should run into resistance at 1542 and
above there at 1577 with support at 1492 and 1477. Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 1577.00.

 

COFFEE MARKET RECAP

4/1/2004

July coffee pushed higher and managed to move
further into the gap area and might have been supported by news of reduced
Guatemala March coffee exports, which were down 29%. With Brazil selling 97% of
a recent coffee auction it would seem that the market is keeping itself current
in the cash area and that could be a slightly supportive development. The
Guatemala export slide was not just a one month decline as the October through
March exports showed a decline of 20%.

Technical Outlook

COFFEE (MAY) 4/2/04 The daily closing price
reversal up is positive. The market has a slightly positive tilt with the close
over the swing pivot. The daily stochastics have crossed over up which is a
bullish indication. The near-term upside objective is at 75.10. The Coffee
contract should run into resistance at 74.65 and above there at 75.10 with
support at 73.5 and 72.80. The market’s short-term trend is positive on a close
above the 9-day moving average.

 

SUGAR MARKET RECAP

4/1/2004

May sugar failed to extend the recent rally and
managed to post a significantly range down. Reports that Brazilian sugar exports
for March increased by 396% to 1.24 million metric tons undermined the trade. It
was also reported that locals were dumping longs as the May sugar failed to hold
above critical chart levels of 632. Heavy spread roll over might have
exaggerated the slide in prices as the May contract is being liquidated in favor
of July.

Technical Outlook

#SUGAR (MAY) 04/02/04: The market’s close below
the 1st swing support number suggests a moderately negative setup for today.
Swing resistance comes in at 6.55, with support found at 6.05. 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 6.05. Daily studies pointing
down suggests selling minor rallies.

 

COTTON MARKET RECAP

4/1/2004

The cotton market remained under pressure from
the bearish news of increased planted acres and from active long liquidation
selling. Weekly export sales came in at 207,300 bales as compared with trade
estimates of 80,000-130,000 tons. Old crop sales came in at 55,200 bales as
compared with 63,100 bales necessary each week to reach the USDA forecast.
Cumulative sales have reached 90.6% of the forecast for the season as compared
with 93.6% on average for this time of the year. Weekly export shipments hit a
new marketing year high at 395,900 bales but even this news was not enough to
slow the active selling from speculators.

Technical Outlook

#COTTON (MAY) 04/02/04: 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 62.61 and then again at 63.60,
while support is targeted at 60.46 and 59.30. Momentum studies are declining,
but have fallen to oversold levels. The next downside target is 59.30. The 9-day
RSI under 30 indicates the market is approaching oversold levels.