What Do Traders Expect From Friday’s Payroll Report?

Technical Outlook

#BONDS (JUN) 03/30/04: It is a slightly negative
indicator that the close was lower than the pivot swing number. Near-term
resistance for bonds is at 114.02 and then again at 114.20, while swing support
hits at 113.02 and below there at 112.20. 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 112.20.

T-NOTES(JUN) 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 114.14. The market is in a bearish position
with the close below the 2nd swing support 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 115.06 and then again at 115.15, while swing support hits at
114.21 and below there at 114.14. The market’s short-term trend is negative as
the close remains below the 9-day moving average.

 

STOCK INDICES RECAP

3/29/2004

The stock market started the session off strong
and added to those early gains on news that economic conditions in the US were
set to improve. Apparently an upgrade on Coke stock gave the market a boost as
cyclical investors took that as a cue to pick up economically sensitive issues.
General Electric was also upgraded within the session, and since that stock is
widely considered to be one of the most broad-based cyclical issues in the
market it is not surprising that even more investors jumped into the market on
the long side.

Technical Outlook

#S&P500 (JUN) 03/30/04: The market’s close above
the 2nd swing resistance number is a bullish indication. Underlying support
comes in at 1116.00 and 1108.75, with overhead resistance at 1127.00 and
1130.75. 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 1130.75.

S&P E-Mini (JUN): 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 1135.75. The market has a bullish
tilt coming into today’s trade with the close above the 2nd swing resistance.
Near-term resistance for the S&P Mini is at 1130.50 and then again at 1135.75,
while swing support hits at 1113.00 and below there at 1100.75. A negative
signal for trend short-term was given on a close under the 9-bar moving average.

NASDAQ (JUN) The market’s close above the 9-day
moving average suggests the short-term trend remains positive. 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 1452.75 and above there at 1460.63 with support at 1433.25
and 1421.63. Positive momentum studies in the neutral zone will tend to
reinforce higher price action. The next upside target is 1460.6.

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 10378 and above there at 10417 with support at 10246 and
10153. Positive momentum studies in the neutral zone will tend to reinforce
higher price action. The next upside target is 10417. 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.

 

CURRENCY MARKET RECAP

3/29/2004

The Dollar surprisingly failed to get any
spillover support from the rising US equity market. Some suggest that
liquidation in the Treasury market sparked an exodus from the US currency as the
world is now expecting the US economy to show signs of recovery! However, if the
general view that the US economy is set to come alive is manifest in the numbers
the liquidation of the Treasuries will accelerate but money might also begin to
favor US investments. In the short term the bear camp would seem to have control
over Treasuries.

Technical Outlook

#CURRENCIES 03/30/04: YEN (JUN): The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. A positive setup occurred with the close over the 1st swing
resistance. Swing resistance is targeted at 95.20 and above there at 95.38, with
the yen finding support around 94.86 and below there at 94.70. Studies are
showing positive momentum, but are now in overbought territory so some caution
is warranted. The next upside target is 95.38. The 9-day RSI over 70 indicates
the market is approaching overbought levels.

EURO (JUN): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
1.2061. The market is in a bearish position with the close below the 2nd swing
support number. Swing support for the Euro comes in at 1.2061, with overhead
resistance at 1.2175. 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

3/29/2004

The gold and silver markets failed Monday in the
face of events that could have supported prices. With the US Dollar weaker and
another bombing incident in Eastern Europe it might have been possible for gold
and silver to gather flight to quality buying but instead the buyers backed away
from the market. Some traders suggest that stop loss selling exaggerated the
liquidation and that is to be expected when one considers that the recent COT
report showed both gold and silver holding a surprising large spec and fund
position. Other traders think that the sharp rise in the US equity market on
Monday fostered long liquidation as many longs moved into gold strictly off the
concern that the global economy was faltering.

Technical Outlook

#P-METALS 03/30/04: SILVER (MAY): The swing
indicator gave a moderately negative reading with the close below the 1st
support number. Initial support for silver is at 757.5 and below there at 754.0
with resistance likely at 765.0 and 767.5. 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 754.0.

GOLD (JUN): Support for gold today comes in near
414.00, while resistance is pegged at 424.40. 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 414.00. The market’s close
below the 1st swing support number suggests a moderately negative setup for
today. The market’s short-term trend is positive on a close above the 9-day
moving average.

 

COPPER MARKET RECAP

3/29/2004

In general copper managed to show an upward bias
in prices despite the weakness in the precious metals markets. However, given
the strong rise in the US equity market it would seem that the recovery is still
progressing and that the tightness in copper stocks is providing support to
prices. Reports that the base metals inventories are seeing ongoing declines
simply reinvigorated the bull camp in copper. However, many traders think that
the copper market will have to see a favorable monthly unemployment report this
Friday in order to facilitate a rise back to the March highs.

 

ENERGY MARKET RECAP

3/29/2004

The energy complex was slightly weaker in the
action Monday, even with OPEC suggesting that they would be forced to go through
with the March 31st production cut. It would seem that OPEC members are coming
out on both sides of the equation with some producers acknowledging the
precarious nature of the world economy. However, with the OPEC President
suggesting that there could be an overhang of supply to the tune of 4 million
barrels per day by this summer it is clear that OPEC leadership will come down
on the side of a production cut. With the weakness in price Monday it would seem
that some traders think that OPEC will be unable to offer up a strong compliance
effort on the new cuts.

Technical Outlook

#ENERGIES 03/30/04: CRUDE OIL (MAY): The market’s
close below the pivot swing number is a mildly negative setup. Support for crude
is keyed on 35.16 and below there at 34.80, with resistance pegged at 35.74 and
35.96. 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 34.80.

UNLEADED GAS (MAY): Negative momentum studies in
the neutral zone will tend to reinforce lower price action. The next downside
target is 108.82. It is a slightly negative indicator that the close was lower
than the pivot swing number. Resistance today is at 113.62, while support should
be found around 108.82. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative.

HEATING OIL (MAY): The market’s close below the
pivot swing number is a mildly negative setup. Heating oil should encounter
support around 85.41, with resistance is at 89.81. 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. 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 85.41.

 

CORN MARKET RECAP

3/29/2004

Long liquidation ahead of key reports on
Wednesday morning helped to pressure the market early in the session as traders
report on the weekend showed funds holding a record net long position as of
March 23rd. The volume was light and the market found a lack of follow-through
technical selling on the early break. A recovery in wheat and corn helped
support the bounce into the close. Weekly export inspections came in at 32.7
million bushels as compared with trade estimates at 40-45 million. Cumulative
shipments have reached 1.075 billion bushels as compared with 851 million last
year at this point. Taiwan bought 60,000 tons of US corn overnight. South Korea
indicated over the weekend that the country will sharply increase the import
quota in order to meet the WTO agreement and to help ease domestic prices. There
was talk that imports could be around 10 million tonnes this season which is up
nearly 4.3 million tons than earlier planned.

Technical Outlook

#CORN (MAY) 03/30/04: 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 299 3/4. The market’s close below the
pivot swing number is a mildly negative setup. Market resistance comes in at 309
1/4 today, with support at 299 3/4. The market’s short-term trend is negative as
the close remains below the 9-day moving average.

 

SOY COMPLEX RECAP

3/29/2004

Long liquidation selling emerged shortly after
the higher opening as traders are positioning ahead of key reports for Wednesday
morning. Good weather for harvest in Brazil and a lack of new yield reports
helped to keep the trade weak. Weekly export inspections came in at 12.66
million bushels as compared with trade estimates at 10-15 million. Cumulative
shipments have reached 759.5 million bushels as compared with 856.7 million last
year at this point which is down 11%. Exports are projected to fall 14.8% from
last year for the entire season. Dry weather is expected to continue for another
week in southern Brazil which may help to support the market as this is a
drought region where significant yield losses are expected. Meal basis was a bit
lower in the mid-west which contributed to the long liquidation selling for the
nearby May meal. May oil came within 10 points of the 40-day moving average at
the lows of the day before short-covering and the move to higher on the session.
The market has not closed under the 40-day moving average since August 26th,
2003 and has only hit the average once since August which was on November 10th.
The market remains concerned with the extent of acreage expansion with the
average trade estimate at 74.508 million acres which is above the previous
record plantings in 2000 at 74.3 million acres.

Technical Outlook

#SOYBEANS (MAY) 03/30/04: It is a slightly
negative indicator that the close was lower than the pivot swing number. The
next area of resistance is around 1021 and 1027, while 1st support hits today at
1005 and below there at 995. 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 995.

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 308.3. First resistance
comes in at 317.8, with support at 311.3. The market’s short-term trend is
negative as the close remains below the 9-day moving average. The market’s close
below the pivot swing number is a mildly negative setup.

BEAN OIL (MAY): 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 32.58. 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 33.74 and above
there at 33.96. Support should be encountered at 33.05 and 32.58.

 

WHEAT MARKET RECAP

3/29/2004

Follow-through technical selling from weakness
last week and lingering bearishness from the Iraq tender situation kept sellers
active early in the session; however, the market found support on the break from
continued strong export news and from some talk that the dry areas of the
western plains might miss out on the rains coming at mid-session. Expectations
that tonight’s weekly crop progress reports may show further improvement and a
wet 6-10 day forecast for the southern plains added to the negative tone early.
Weekly export inspections came in at 23.4 million bushels as compared with trade
estimates at 15-20 million. Cumulative shipments have reached 925.6 million
bushels as compared with 709.2 million last year at this point. The USDA
reported the sale of 165,000 tons of wheat to Iraq which was “old news”. For
delivery in the 2004/2005 season, 110,000 tons of the total was designated and
55,000 tons was for the old crop season. Weekend rains in the 1-2 inch area for
the southern and eastern plains kept the tone bearish early in the session but
the recovery in the other grain markets and talk that high priced soybeans will
pull acres away from wheat helped to support the late rally.

Technical Outlook

#WHEAT (MAY) 03/30/04: 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. Look for near-term support at 401 and
below there at 395, with resistance levels at 410 and 413. 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 413.

 

LIVE CATTLE RECAP

3/29/2004

April cattle closed 57 higher on the session
finding support from the surge in hog prices. A lack of interest in selling the
huge discount to the cash market and a lack of interest in buying the market due
to the expected rise in production ahead helped to keep the volume light and
trade choppy. Boxed-beef cut-out values for choice 600-750 pound cuts at
mid-session was 7 cents higher to $138.72 as compared with $142.41 last week at
this time. There were no bids in the cash market with offers at 85 as compared
with $82-$83 trade last week. Talk of active volume in the boxed-beef trade late
last week and hopes that cash cattle will trade steady or just slightly lower
this week helped to provide support.

Technical Outlook

#CATTLE (JUN) 03/30/04: Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
72.77. A positive setup occurred with the close over the 1st swing resistance.
Support should be encountered at 73.60 and below there at 72.77. Market
resistance is at 75.00 and then again at 75.57. The market’s close below the
9-day moving average is an indication the short-term trend remains negative.

 

LEAN HOGS RECAP

3/29/2004

The hog market opened near unchanged in choppy
early trade but fund buying turned more active at mid-session and the market
managed a move to new contract highs. A lack of selling after the neutral to
bearish supply news from the USDA helped re-ignite fund and spec buying. In
addition, the rally snowballed to move June hogs limit-up and there were 500-600
buy orders at the close. Pork cut-out values hit the highest level since
September of 2001. The 2-day Lean Index was down 13 cents to $68.46 as compared
with $67.77 one week ago.

Technical Outlook

#HOGS (JUN) 03/30/04: The market’s close above
the 2nd swing resistance number is a bullish indication. Resistance levels comes
in at 75.02 and 75.62 today, while support is around 72.55 and then 70.67. The
outside day up is a positive signal. The rally brought the market to a new
contract high. The upside closing price reversal on the daily chart is somewhat
bullish. The market’s short-term trend is positive on a close above the 9-day
moving average. The daily stochastics gave a bullish indicator with a crossover
up. The near-term upside objective is at 75.62. With a reading over 70, the
9-day RSI is approaching overbought levels.

 

COCOA MARKET RECAP

3/29/2004

The cocoa market continued to discount the
potential political threat to cocoa inside the Ivory Coast but it would seem
that tensions remain high just outside critical growing areas. However, if
physical threats can’t seem to inflate cocoa prices it would appear that the
bull camp is without a significant following. With origin selling noted again
Monday morning it would seem that more than enough physical supply flow is
moving to dampen the emerging political threats to supply.

Technical Outlook

COCOA (MAY) 03/30/04 The market tilt is slightly
negative with the close under the pivot. Cocoa should run into resistance at
1484 and above there at 1492 with support at 1459 and 1442. Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The next
upside target is 1492.25.

 

COFFEE MARKET RECAP

3/29/2004

July coffee closed 45 higher on the session and
has managed to hold most of the recent gains off the recent low. Reports that
Peru coffee exports decline by 12% in February to 62,940 bags and were also
reported to be down 165 in the October through February time frame.
Unfortunately the trade was supposedly boosted by small spec buying, which would
seem to leave the bull camp in charge of near term price action. The trade is
certainly aware of the massive overhead resistance on the charts and many
traders think that some fresh supply scare must be seen in order to get July
coffee prices above a critical pivot around 74.00.

Technical Outlook

COFFEE (MAY) 3/30/04 The market has a slightly
positive tilt with the close over the swing pivot. Momentum studies are
declining, but have fallen to oversold levels. The next downside objective is
now at 71.10. The Coffee contract should run into resistance at 73.05 and above
there at 73.70 with support at 71.75 and 71.10. The downside crossover (9 below
18) of the moving averages suggests a developing short-term downtrend.

 

SUGAR MARKET RECAP

3/29/2004

May sugar closed 1 tick lower on the session but
15 points off of the highs of the day. The market moved higher early in the
session but the rally attracted selling interest and long liquidation helped to
push the market lower into the close. The Sao Paulo Cane Agroindustry Union
today pegged the Brazil center-south cane crop at a record 319.9 million tons as
compared with last years record at 299.4 million tons. Recent trade expectations
for the crop have been in the 310-322 million ton range so at the high end of
the estimates, the forecast was seen as bearish.

Technical Outlook

#SUGAR (MAY) 03/30/04: The market’s close below
the pivot swing number is a mildly negative setup. Swing resistance comes in at
6.28, 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 trending
lower at mid-range should accelerate a move lower if support levels are taken
out. The next downside objective is now at 5.94.

 

COTTON MARKET RECAP

3/29/2004

The May cotton managed to reject initial selling
pressure and close moderately higher on Monday. It would seem that ongoing high
soybean prices are enticing some Cotton acres to go to soybeans and that is
probably providing prices with some support. We also think that an improvement
in the macro economic outlook is serving to improve the demand outlook for
cotton and that in turn is discouraging short interest in the market. Giving
some credence to the acreage talk are forecasts that cotton will see a shortage
of plantings. The actual forecast for cotton in the Wednesday report is between
12.92 and 14 million acres. The recent National Cotton Council pegged planted
area at 14.76 million.

Technical Outlook

#COTTON (MAY) 03/30/04: The market’s close below
the 9-day moving average is an indication the short-term trend remains negative.
A positive setup occurred with the close over the 1st swing resistance. Next
resistance area comes in at 66.25 and then again at 66.68, while support is
targeted at 64.85 and 63.88. The daily stochastics have crossed over up which is
a bullish indication. The next upside target is 66.68.