What Saved The Dollar

Technical Outlook

BONDS (DEC) 10/24/2003: The market could take on a defensive posture with the daily closing price reversal down. The market tilt is slightly negative with the close under the pivot. Near-term resistance for bonds is at 108.24 and then again at 109.30, while swing support hits at 106.30 and below there at 106.10. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market back below the 40-day moving average suggests the longer-term trend could be turning down. 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 109.30.

T-NOTES(DEC) The daily closing price reversal down puts the market on the defensive. 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 113.08. The market’s close below the 1st swing support number suggests a moderately negative setup for today. 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 112.16 and then again at 113.08, while swing support hits at 111.12 and below there at 111.01. The market’s short-term trend is positive on a close above the 9-day moving average.

STOCK INDICES RECAP

10/23/2003

The stock market pulled back from the brink of a major washout and did so because of better than expected news from the job sector. It also seemed like earnings reports that were better than expected versus worse than expected were maintaining a 4 to 1 ratio. In other words, earnings are still supportive even if the market isn’t giving them much consideration. We think the main focus of the stock market is on the question of sustainable growth and whether or not the 4th quarter can improve on the lofty expectations of the 3rd quarter. The stock market isn’t out of the woods on the recent weakness but conditions have gotten better.

Technical Outlook

S&P500 (DEC) 10/24/2003: It is a slightly negative indicator that the close was under the swing pivot. Underlying support comes in at 1022.75 and 1018.03, with overhead resistance at 1033.25 and 1039.03. The close below the 9-day moving average is a negative short-term indicator for trend. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The next downside objective is now at 1018.03.

S&P E-Mini (DEC): A new contract high was made on the rally. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 1013.19. It is a slightly negative indicator that the close was lower than the pivot swing number. Near-term resistance for the S&P Mini is at 1036.13 and then again at 1042.69, while swing support hits at 1021.38 and below there at 1013.19. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

NASDAQ (DEC) A negative signal for trend short-term was given on a close under the 9-bar moving average. The close below the 1st swing support could weigh on the market. The market should run into resistance at 1384.50 and above there at 1396.25 with support at 1365.50 and 1358.25. Bearish daily studies indicate selling minor rallies this session. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 1358.25.

CURRENCY MARKET RECAP

10/23/2003

Once again the Dollar was saved by outside influences. In the action Thursday the Dollar saw better than expected economic readings and a steep slide in the Yen and that probably discouraged follow through selling in the Dollar. With the US equity market managing to reject the initial aggressive downside slide in prices and even manage to climb into positive ground by mid session there was renewed optimism toward the US economy and the Dollar. There were also rumors that China was preparing to re-peg their currency (unsupported rumors) and that has to give both longs and shorts pause in the Dollar.

Technical Outlook

YEN (DEC): A negative signal for trend short-term was given on a close under the 9-bar moving average. The close below the 1st swing support could weigh on the market. Swing resistance is targeted at 91.51 and above there at 91.66, with the yen finding support around 91.21 and below there at 91.06. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 91.06. Bearish daily studies indicate selling minor rallies this session.

EURO (DEC): Momentum studies are rising from mid-range which could accelerate a move higher if resistance levels are penetrated. The near-term upside target is at 1.1818. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. Swing support for the Euro comes in at 1.1714, with overhead resistance at 1.1818. The downside crossover of the 9 & 18 bar moving average is a negative signal. More selling pressure is likely given yesterday’s gap lower price action on the day session chart.

PRECIOUS METALS RECAP

10/23/2003

There seemed to be too much going on outside of the gold market for the specs to get interested in gold. With the Dollar higher, the stock market managing to bounce and US economic numbers coming in strong the trade just didn’t get the impetus to buy gold on its weakness. The silver market reconfirmed its divergence with gold and managed to post a critical gain. While silver didn’t manage to get above critical resistance of $5.20 the bull camp had to be emboldened by the action Thursday. Some are suggesting that silver is benefiting from strengthening price action in energies, soybeans and cotton!

Technical Outlook

SILVER (DEC): The market setup is supportive for early gains with the close over the 1st swing resistance. Initial support for silver is at 514.0 and below there at 509.5 with resistance likely at 516.6 and 520.5. A positive signal for trend short-term was given on a close over the 9-bar moving average. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 516.6. Daily studies suggest buying dips today.

GOLD (DEC): Support for gold today comes in near 381.68, while resistance is pegged at 388.28. Momentum studies are rising from mid-range which could accelerate a move higher if resistance levels are penetrated. The near-term upside target is at 388.28. It is a slightly negative indicator that the close was under the swing pivot. The upside crossover of the 9 & 18 bar moving average is a positive signal.

COPPER MARKET RECAP

10/23/2003

The Escondida news about returning to full production weighed heavily on the market but prices could have fell much more aggressively if the US stock market hadn’t managed to recover and US economic numbers didn’t come in strong during the session. Many think that copper could see some additional weakness in the coming session because the production news is such a headline event. The trade continues to see stories that Chinese demand is the whole story in the outlook for copper demand and that type of story serves to put a floor under the market.

ENERGY MARKET RECAP

10/23/2003

Energy prices soared on fears that Nigerian ethnic problems might impact the oil region in the delta of that country. We also think that the slightly improved look toward the US economy and the potential for slightly colder temps gave the market the impetus to react bullishly to the Nigerian threat. The natural gas market saw a slightly larger than expected injection and that left natural gas so weak that the market couldn’t react to the bull news in the regular energy complex.

Technical Outlook

CRUDE OIL (DEC): The upside daily closing price reversal gives the market a bullish tilt. The close over the pivot swing is a somewhat positive setup. Support for crude is keyed on 29.83 and below there at 29.14, with resistance pegged at 30.78 and 31.04. The market’s close on the 9-day moving average is neutral. .

UNLEADED GAS (DEC): Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 78.47. The market has a slightly positive tilt with the close over the swing pivot. Resistance today is at 84.27, while support should be found around 78.47. The daily closing price reversal up is a positive indicator that could support higher prices. A negative signal for trend short-term was given on a close under the 9-bar moving average.

HEATING OIL (DEC): The close over the pivot swing is a somewhat positive setup. Heating oil should encounter support around 80.82, with resistance is at 85.42. The close below the 9-day moving average is a negative short-term indicator for trend. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The next downside target is now at 80.82. The upside daily closing price reversal gives the market a bullish tilt.

CORN MARKET RECAP

10/23/2003

The corn market finally joined the soybean party with a massive upward adjustment. From the last COT report the funds and small specs were net short some 90,000 contracts and that is certainly cause for short covering buying. With prices gaining nearly 15 cents on the session and reaching the highest level since early September there is the potential for even more short covering ahead. The weekly export sales came in at 754,000 tons compared to expectations of 750,000 to 1.0 million tons. We think that corn was bought Thursday as a substitute for meal supplies that might not be available in the future. Therefore, corn might be seen an alternative feed component and a necessary protein replacement.

Technical Outlook

CORN (DEC) 10/24/2003: Momentum studies are rising from mid-range which could accelerate a move higher if resistance levels are penetrated. The near-term upside target is at 246 3/4. There could be more upside follow through since the market closed above the 2nd swing resistance. Market resistance comes in at 246 3/4 today, with support at 219 3/4. The upside crossover of the 9 & 18 bar moving average is a positive signal. The cross over and close above the 40-day moving average is an indication the longer-term trend is up. The market is becoming somewhat overbought now that the RSI is over 70. Follow through buying looks likely if the market can hold yesterday’s gap on the day session chart.

SOY COMPLEX RECAP

10/23/2003

November soybeans closed sharply higher (up 14) on the hope for surging demand from China. The USDA reported weekly export sales of 1.02 million tons compared to expectations of 750,000 to 1.05 million. The export pace only has to be 250,000 per week to meet the USDA projection so it seems to be a given that demand is going to be revised sharply higher and ending stocks sharply lower. It is also possible that Chinese meal buyers are becoming so concerned about shortages that they are rushing in to cover needs far into the future. Supposedly the Chinese soybean market closed limit up Thursday morning and was at a price equal to $10.90 in the US. There are also concerns that demand is going to come out of the woodwork because it is being pulled out by the aggressive price action.

Technical Outlook

SOYBEANS (JAN) 10/24/03 The market made a new contract high on the rally. The gap upmove on the day session chart is a bullish indicator for trend. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The next area of resistance is around 772 1/2 and 778 1/4, while 1st support hits today at 761 1/2 and below there at 756 1/4. The market’s close on the 9-day moving average is neutral. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 778 1/4. The market is approaching overbought levels with an RSI over 70.

MEAL (DEC): Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 245.3. The market rallied to a new contract high. Follow through buying looks likely if the market can hold yesterday’s gap on the day session chart. First resistance comes in at 242.0, with support at 236.0. The close above the 9-day moving average is a positive short-term indicator for trend. There could be more upside follow through since the market closed above the 2nd swing resistance. The market is becoming somewhat overbought now that the RSI is over 70.

BEAN OIL (DEC): A positive signal for trend short-term was given on a close over the 9-bar moving average. A bullish signal was given with an upside crossover of the daily stochastics. The next upside objective is 27.30. A positive setup occurred with the close over the 1st swing resistance. Daily swing resistance is found at 27.12 and above there at 27.30. Support should be encountered at 26.63 and 26.32. The market is approaching overbought levels with an RSI over 70.

WHEAT MARKET RECAP

10/23/2003

December wheat closed 15 cents higher on the session and at the highest level since September 3rd. The ongoing concerns of dry weather in the central plains diminished indications that China might be looking to buy some wheat propelled prices sharply higher. Weekly export sales were 592,100 compared to expectations of 350,000-500,000 tons. It almost seems like the world is getting concerned about the availability of world protein supplies and with the strong rallies in corn and soybeans the wheat simply caught an outside benefit. The trade also reported heavily technical buying on the session by the funds.

Technical Outlook

WHEAT (DEC) 10/24/2003: If yesterday’s gap higher on the day session chart holds, additional buying could develop this session. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Expect near-term support around 364 and below there at 358 1/2, with resistance levels at 375 and 380 1/2. A positive signal for trend short-term was given on a close over the 9-bar moving average. 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 380 1/2. The market is approaching overbought levels with an RSI over 70.

LIVE CATTLE RECAP

10/23/2003

After a 7 day break of 882 points, December cattle turned and closed limit-up on the session in active trade. The extreme volatility in cattle is likely to continue as the market attempts to gauge where futures and cash markets might converge later this year and into 2004. Cash bids improved to $96 on which is up $1.00 from Wednesday and helped ease the selling pressures as well. Boxed-beef prices were down $2.03 to $188.11 as compared with $198.16 the previous week. Slaughter came in at 129,000 head which brought slaughter on the week to 508,000 head as compared with 486,000 last week and 530,000 last year.

Technical Outlook

CATTLE (DEC) 10/24/2003: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 85.92. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Support should be encountered at 87.45 and below there at 85.92. Market resistance is at 89.50 and then again at 90.02. The outside day up is somewhat positive. The daily closing price reversal up is a positive indicator that could support higher prices. A negative signal for trend short-term was given on a close under the 9-bar moving average.

LEAN HOGS RECAP

10/23/2003

December hogs closed 92 lower on the session but may have reached a near-term low after a 935 point break from last weeks highs. The close was 107 points above the lows of the day and the close above the opening is also a sign of a loss in downside momentum. The 2-day Lean index was down 3 cents to 53.95 but the weakness in the cash of the past two days should pull futures lower. The oversold condition of the market and the limit-up move in cattle helped support. Slaughter came in at 393,000 head which brought week-to-date slaughter to 1.574 million head vs. 1.541 million last week and 1.566 million last year.

Technical Outlook

HOGS (DEC) 10/24/2003: The defensive setup, with the close under the 2nd swing support, could cause some early weakness. Resistance levels comes in at 53.55 and 54.17 today, while support is around 51.97 and then 51.02. More selling pressure is likely given yesterday’s gap lower price action on the day session chart. The close below the 9-day moving average is a negative short-term indicator for trend. Momentum studies are still bearish, but are now at oversold levels and will tend to support reversal action if it occurs. The next downside target is now at 51.02.

COCOA MARKET RECAP

10/23/2003

Short covering seemed to rule the day with some light commercial buying seen. It is also possible that growing ethnic violence in Nigeria is giving rise to some concern over Nigerian cocoa supplies. However, with the trade supposedly detected signs of origin selling into the close Thursday and that could haunt the cocoa market opening on Friday. In response to the farmers threat to hold back supplies for higher prices the Ivory Coast apparently ended the minimum farm gate price support mechanism and that is sure to cause some political flap in the days ahead.

Technical Outlook

COCOA (DEC)10/24/03 The market has a slightly positive tilt with the close over the swing pivot. Cocoa should run into resistance at 1434 and above there at 1462 with support at 1384 and 1362. The daily stochastics have crossed over up which is a bullish indication. The next upside target is 1462.00.

COFFEE MARKET RECAP

10/23/2003

December coffee closed higher in quiet and choppy trade. Funds were noted buyers of near 3000 contracts this week which has provided good support and producer selling seems to slow on moves under 62.50. The weather outlook still looks negative for Brazil with more rains in the forecast for next week. In spite of the relatively cheap price level and the sideways trade recently, the open interest continues to rise and is approaching a record high level. CSCE exchange stocks were up 6,894 bags to 4.454 million bags with 52,743 bags pending review.

Technical Outlook

COFFEE (DEC)10/24/03 The daily closing price reversal up is positive. The market has a slightly positive tilt with the close over the swing pivot. 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 63.95.The Coffee contract should run into resistance at 63.30 and above there at 63.95 with support at 61.8 and 60.95. The market’s short-term trend is positive on a close above the 9-day moving average.

SUGAR MARKET RECAP

10/23/2003

The market continues to work sideways in a choppy trade this week on a very light volume. Traders are absent from the floor and from London with a key industry meeting in Brazil late this week. Prices are historically cheap but the fundamental outlook remains bearish. Eventually, the demand for cane based ethanol is likely to catch-up to the current supply of sugar cane but in the meantime, the ethanol industry in Brazil and the sugar industry seem oversupplied. Even a surge in the CRB, which would normally support sugar, failed to provide new buying and this indicates a weak undertone to the market.

Technical Outlook

SUGAR (MAR) 10/24/2003: It is a slightly negative indicator that the close was under the swing pivot. Swing resistance comes in at 6.07, with support found at 5.85. The close below the 9-day moving average is a negative short-term indicator for trend. Momentum studies are still bearish, but are now at oversold levels and will tend to support reversal action if it occurs. The next downside target is now at 5.85.

COTTON MARKET RECAP

10/23/2003

December cotton closed limit up and has gained 528 points in 2 sessions. Weekly export sales came in at 620,900 bales as compared with 250,000-325,000 bales expected and 319,000 bales last week. This is the highest weekly sales total we could find since November of 1994. Last years high was 379,200 bales and 455,200 bales the previous season. Last weeks sales were a marketing year high so the surge in new buying in spite of the recent higher prices was seen as bullish. China represented 488,300 bales of the total and traders believe that China could import 5-7 million bales this season. Nearby futures moved to the highest level since July of 1998 with the next upside objective at 83.20.

Technical Outlook

COTTON (DEC) 10/24/2003: A positive signal for trend short-term was given on a close over the 9-bar moving average. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Next resistance area comes in at 81.76 and then again at 82.35, while support is targeted at 79.42 and 77.67. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 82.35. The market is approaching overbought levels with an RSI over 70. The market made a new contract high on the rally.