Watch This Price Action In Copper

Technical Outlook

BONDS (DEC) 10/21/03: With the close higher than the pivot swing number, the market is in a slightly bullish posture. Near-term resistance for bonds is at 107.28 and then again at 108.15, while swing support hits at 106.14 and below there at 105.19. 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 105.19.

T-NOTES(DEC) Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 110.10. It is a mildly bullish indicator that the market closed over the pivot swing number. Near-term resistance for the T-Notes is at 111.29 and then again at 112.10, while swing support hits at 110.29 and below there at 110.10. The market’s short-term trend is negative as the close remains below the 9-day moving average.

STOCK INDICES RECAP

10/20/2003

The stock market just can’t seem to get it together as the earnings reports seem to be favorable but yet the market couldn’t generate significant upside action Monday morning. Certainly seeing the US leading indicator report post a contraction is disappointing and that is justification for the stock market to pull back from its early highs. However, the trade is watching support levels on the charts closely as it would seem that the bear camp is waiting in the wings. If the bears don’t have to fear strong earnings or solid US economic numbers then they would seem to have little to fear.

Technical Outlook

S&P500 (DEC) 10/21/03: 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 1039.85 and 1031.38, with overhead resistance at 1051.15 and 1053.98. The market’s short-term trend is positive on a close above the 9-day moving average. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The next downside objective is now at 1031.38.

S&P E-Mini (DEC): 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 turning bearish at overbought levels will tend to support lower prices if support levels are broken. The next downside objective is 1031.44. The market has a slightly positive tilt with the close over the swing pivot. Near-term resistance for the S&P Mini is at 1051.13 and then again at 1053.94, while swing support hits at 1039.88 and below there at 1031.44. A negative signal for trend short-term was given on a close under the 9-bar moving average.

NASDAQ (DEC) 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. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The market should run into resistance at 1423.00 and above there at 1430.00 with support at 1399.00 and 1382.00. 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 1382.0.

CURRENCY MARKET RECAP

10/20/2003

It would seem that the BOJ came through the initial APEC meeting reaction with some assistance as the Yen showed significant damage Monday despite a clear cut trend in most currency markets. The US Dollar should have come under more pressure considering that the scheduled numbers Monday were weaker than expected. The biggest surprise of the session was the magnitude of the Canadian Dollar correction as that trend appeared to be firmly entrenched.

Technical Outlook

YEN (DEC): The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The gap lower price action on the day session chart is a bearish indicator for trend. The swing indicator gave a moderately negative reading with the close below the 1st support number. Swing resistance is targeted at 91.08 and above there at 91.22, with the yen finding support around 90.69 and below there at 90.44. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 90.44. Short-term indicators on the defensive. Consider selling an intraday bounce.

EURO (DEC): 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 1.1554. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.1554, with overhead resistance at 1.1716. The market’s short-term trend is negative as the close remains below the 9-day moving average. The gap down on the day session chart is bearish with more selling pressure possible today.

PRECIOUS METALS RECAP

10/20/2003

The gold and silver market posted some impressive action Monday as they were higher for most of the session despite little direction from the US Dollar and slack US economic readings. Even more impressive is the fact that silver made gains in the face of the massive stocks injection of 3.9 million ounces. Maybe gold and silver were getting spillover support from the very strong price action in copper and platinum!

Technical Outlook

SILVER (DEC): A positive setup occurred with the close over the 1st swing resistance. Initial support for silver is at 496.0 and below there at 490.5 with resistance likely at 500.4 and 505.0. 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 500.4. Short-term indicators suggest buying dips today.

GOLD (DEC): Support for gold today comes in near 370.25, while resistance is pegged at 377.45. The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 377.45. 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.

COPPER MARKET RECAP

10/20/2003

It would not seem like the buyers in copper are discouraged by the higher price structure. In fact, copper price action would almost seem like a blow off top formation but the fundamentals don’t seem to undermine prices any more than the extensively overbought condition of the market. The leading indicator contraction in the US would normally call into question the prospect of soaring copper demand but in the action Monday the market didn’t appear to be concerned with the fundamentals. Maybe the recent declines in the US Dollar have made copper attractive in the eyes of some international buyers!

ENERGY MARKET RECAP

10/20/2003

After some follow through weakness the energy complex managed to find some chart support. However, as the market looks forward the bull camp has to be concerned about the upcoming weekly inventory report as crude oil seems to be in a pattern of rebuilding. It is possible that crude oil was supported by ideas that increased attacks against US forces in Iraq could result in another disruption of Iraqi pipe line flow but with the weather mostly bearish and the macro economic case for demand suspect the bear camp looks to control even with a little increased anxiety inside Iraq. The natural gas market also looks to remain under pressure as supplies are recharging and the small spec camp appears to be under pressure to liquidate.

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 30.04 and below there at 29.57, with resistance pegged at 30.82 and 31.13. The market’s close on the 9-day moving average is neutral. .

UNLEADED GAS (DEC): Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 80.15. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Resistance today is at 84.95, while support should be found around 80.15. The daily closing price reversal up is positive. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

HEATING OIL (DEC): The market’s close below the pivot swing number is a mildly negative setup. Heating oil should encounter support around 80.28, with resistance is at 86.08. 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 80.28.

CORN MARKET RECAP

10/20/2003

Expectations for the weekly export inspections called for 35 to 40 million bushels but the total came in at 32.9 million bushels and that is disappointing to the corn trade. Maybe the exports were impacted by the holiday but the market is nonetheless weakened by the news. More record warmth in the US is expected to speed harvest and possibly weaken the basis which has been surprisingly strong in corn. The market should have been supported by the weekly COT report in corn but even that failed to inspire the bull camp.

Technical Outlook

CORN (DEC) 10/21/03: Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 212 1/4. The market’s close below the pivot swing number is a mildly negative setup. Market resistance comes in at 215 1/4 today, with support at 212 1/4. The market’s short-term trend is negative as the close remains below the 9-day moving average. With a reading under 30, the 9-day RSI is approaching oversold levels.

SOY COMPLEX RECAP

10/20/2003

Expectations for weekly export inspections called for 22 to 27 million and the actual reading came in at 23.71 million bushels. With the exports coming in below the prior week’s tally of 26.283 the market could have been disappointed but it would seem like the bull camp won’t be discouraged easily because the market is fixated on the prospect of soaring Chinese demand. Apparently another surprise sale of 275,000 metric tons sparked the buying interest and the market wasn’t about to give up on the recent trend.

Technical Outlook

SOYBEANS (JAN) 10/21/03: It is a slightly negative indicator that the close was lower than the pivot swing number. The next area of resistance is around 736 1/2 and 745 1/4, while 1st support hits today at 724 1/2 and below there at 721 1/4. 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 721 1/4. 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 223.7. The rally brought the market to a new contract high. First resistance comes in at 223.0, with support at 221.6. 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. With a reading over 70, the 9-day RSI is approaching overbought levels.

BEAN OIL (DEC): 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 25.75. It is a slightly negative indicator that the close was lower than the pivot swing number. The outside day down and close below the previous day’s low is a negative signal. The downside closing price reversal on the daily chart is somewhat negative. Daily swing resistance is found at 26.58 and above there at 27.05. Support should be encountered at 25.93 and 25.75.

WHEAT MARKET RECAP

10/20/2003

The European market provided the US wheat market with a little support Monday as the physical market didn’t see much in the way of offers and that caused prices to firm. The trade is still being mostly supported by the ongoing hope for more demand and the European cash market developments played into the theme. In fact, the European trade was actually talking about some disappointing effects of dryness and that is given importance in a quiet session. Expectations for weekly exports inspections were 20 to 25 million with the actual reading coming in at 18.9 million.

Technical Outlook

WHEAT (DEC) 10/21/03: The daily closing price reversal up is positive. Short-term indicators suggest buying dips today. A positive setup occurred with the close over the 1st swing resistance. Look for near-term support at 329 1/2 and below there at 324 , with resistance levels at 338 and 341 . The market’s close above the 9-day moving average suggests the short-term trend remains positive. 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 341 .

LIVE CATTLE RECAP

10/20/2003

The market experienced significant follow-through to the downside from last week’s weekly closing price reversal from a contract high with the limit-down close on Monday. This helps confirm the top signal and the weakness is attracting more and more long liquidation selling from the speculator. Keep in mind; funds were still net long over 33,000 contracts in the weekend traders report. Boxed beef cut-out values were down 5 cents to $210.11 as compared with $181.76 last week at this time. Traders believe cash and boxed-beef values will be lower this week as demand is expected to slow from the recent surge in prices. Reports of cancelled orders from retailers due to high prices helped trigger the active speculative long liquidation selling. Cash bids showed up at $95.00 with offers at $100 or higher.

Technical Outlook

CATTLE (DEC) 10/21/03: Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 86.77. The swing indicator gave a moderately negative reading with the close below the 1st support number. Short-term indicators on the defensive. Consider selling an intraday bounce. Support should be encountered at 87.37 and below there at 86.77. Market resistance is at 89.72 and then again at 91.50. The outside day down and close below the previous day’s low is a negative signal. The downside closing price reversal on the daily chart is somewhat negative. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

LEAN HOGS RECAP

10/20/2003

December hogs closed 190 lower on the session and bellies down the limit as the much higher than expected pork production from last week (up 5.1% from last year) is expected to put some pressure on pork values this week. In addition, the stiff premium of futures to cash added to the bearish tone. Slaughter came in at 394,000 head as compared with trade expectations at 380,000-390,000 head as the demand is strong from the packer due to positive margins. The Monthly Cold Storage report from the USDA, released after the close, was bearish and showed belly stocks at 10.18 million pounds as compared with trade estimates which averaged 9.5 million (range 8.9-10.6).

Technical Outlook

HOGS (DEC) 10/21/03: The market is in a bearish position with the close below the 2nd swing support number. Resistance levels comes in at 58.25 and 59.02 today, while support is around 57.12 and then 56.77. 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 56.77.

COCOA MARKET RECAP

10/20/2003

Cocoa prices were slightly higher in what some traders suggested was a short covering action following last week’s big losses. However, it was noted by the Press that trade and industry buying was seen around the lows which means that some users see the recent lows as a value zone. We can understand the users stepping in consistently as they seek to obtain as much of the main crop supply as prudent at this early stage. The market also saw some arbitrage buying but that type of buying isn’t expected to result in a reversal of the recent down trend.

Technical Outlook

COCOA (DEC)10/21/03 The market tilt is slightly negative with the close under the pivot. Cocoa should run into resistance at 1406 and above there at 1426 with support at 1365 and 1344. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 1343.75.

COFFEE MARKET RECAP

10/20/2003

Coffee prices managed to bounce away from the lows Monday but it would appear that the weather is providing only part of the support for prices. Some traders think that the oversold condition of the market discouraged the sellers Monday around the lows but there would not appear to be enough fundamental reason to prevent a slide to new lows for the move. In order to forge a bottom it will take an extension of dry weather or further consolidation to discourage the bear camp.

Technical Outlook

COFFEE (DEC)10/21/03 The market setup is supportive for early gains with the close over the 1st swing resistance. The daily stochastics have crossed over up which is a bullish indication. The near-term upside objective is at 62.85.The Coffee contract should run into resistance at 62.30 and above there at 62.85 with support at 60.85 and 59.95. The market’s short-term trend is positive on a close above the 9-day moving average. The market was pushed to a new contract low.

SUGAR MARKET RECAP

10/20/2003

The gap higher on a Monday is normally a positive sign for the market but producer selling turned active on the rally and March futures closed just 7 higher on the session but 12 points off of the highs of the day. The market continues to see a steady pace of routine export cash business but the bulls need to see new, or non-routine business in order to build much of a bull case. The reason for the bounce seems to be the oversold condition and not any real changes in the fundamentals. Iran bought 40,000 tons of Brazil sugar and Syria bought 26,000 tons of raw sugar. Taiwan is tendering for 35,000 tons of raws on Wednesday. The internal prices in Russia remain weak and the import flow is disappointing to trade houses.

Technical Outlook

SUGAR (MAR) 10/21/03: The gap upmove on the day session chart is a bullish indicator for trend. The market’s close above the 2nd swing resistance number is a bullish indication. Swing resistance comes in at 6.19, with support found at 5.91. The market’s short-term trend is positive on a close above the 9-day moving average. Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 5.91.

COTTON MARKET RECAP

10/20/2003

The overbought condition of the market triggered a sharp break in cotton early in the session but solid trade house buying emerged to support the recovery. December cotton closed 8 lower on the session but nearly 100 points off of the lows of the day and also above the opening. The market is extremely overbought with just about any technical indicator but many industry traders still believe the China crop is low enough to see significantly higher prices ahead with historically tight stocks to usage numbers; especially for the world readings. In addition, the China and other world economies look strong so textile exports and consumption in China should remain on target.

Technical Outlook

COTTON (DEC) 10/21/03: The market’s close above the 9-day moving average suggests the short-term trend remains positive. It is a slightly negative indicator that the close was lower than the pivot swing number. Next resistance area comes in at 76.07 and then again at 76.53, while support is targeted at 74.82 and 74.03. 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 74.03. The 9-day RSI over 70 indicates the market is approaching overbought levels.