What’s Impressive About Gold

Technical Outlook

BONDS (DEC) 10/30/03: The swing indicator gave a moderately negative reading with the close below the 1st support number. Near-term resistance for bonds is at 109.02 and then again at 110.01, while swing support hits at 107.21 and below there at 107.07. The moving average crossover up (9 above 18) indicates a possible developing short-term uptrend. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 110.01.

T-NOTES(DEC) 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 113.17. 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 112.28 and then again at 113.17, while swing support hits at 111.30 and below there at 111.21. The upside crossover (9 above 18) of the moving averages suggests a developing short-term uptrend.

STOCK INDICES RECAP

10/29/2003

The stock market seemed to have to fight for most of the gains mounted during the session Wednesday. While the market was devoid of critical economic information earnings reports continued to flow and flow favorably. Furthermore, the market also saw some slightly supportive dialogue from the Fed and with expectations for the 3rd Qtr GDP reading Thursday morning calling for growth in excess of 6% we have to think that the bear camp has a leg up. For the stock market the initial claims and ongoing claims readings Thursday morning could have significant repercussions as the main fear in the market place remains the jobless recovery.

Technical Outlook

S&P500 (DEC) 10/30/03: It is a mildly bullish indicator that the market closed over the pivot swing number. Underlying support comes in at 1043.05 and 1038.88, with overhead resistance at 1049.95 and 1052.68. 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 1052.68.

S&P E-Mini (DEC): The market made a new contract high on the rally. A bullish signal was given with an upside crossover of the daily stochastics. The next upside objective is 1054.06. The market has a slightly positive tilt with the close over the swing pivot. Near-term resistance for the S&P Mini is at 1050.63 and then again at 1054.06, while swing support hits at 1041.88 and below there at 1036.56. A positive signal for trend short-term was given on a close over the 9-bar moving average.

NASDAQ (DEC) 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. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The market should run into resistance at 1428.25 and above there at 1434.38 with support at 1413.75 and 1405.38. The daily stochastics have crossed over up which is a bullish indication. The next upside target is 1434.4.

CURRENCY MARKET RECAP

10/29/2003

The Dollar started out firmer but gave up those gains quickly. However, it did not seem like the bear camp had much interest in pressing prices after they managed to put the Dollar into negative territory. The primary benefactor of Dollar weakness continues to be the Pound and the Yen. Surprisingly, testimony to Congress on the Chinese exchange rate didn’t seem to result in much activity in the currency markets but one should not play down the potential volatility off that issue.

Technical Outlook

YEN (DEC): 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. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Swing resistance is targeted at 92.63 and above there at 92.85, with the yen finding support around 92.33 and below there at 92.25. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 92.85.

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 1.1618. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.1618, with overhead resistance at 1.1712. 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

10/29/2003

The gold market soared and appeared to drag silver with it. It is impressive that both gold and silver managed to reject critical technical failures early in the session. It should also be noted that the US Dollar really didn’t give the gold much direction into the gold market close and that would suggest that something else was driving gold besides the Dollar connection. The world’s largest gold miner produced significant earnings during the session and that might have sparked investment interest in gold futures but that might also be a sign that gold hedging might be on the horizon.

Technical Outlook

SILVER (DEC): The cross over and close above the 40-day moving average indicates the longer-term trend has turned up. A positive setup occurred with the close over the 1st swing resistance. Initial support for silver is at 508.2 and below there at 501.6 with resistance likely at 514.8 and 520.2. 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 514.8. Short-term indicators suggest buying dips today. The daily closing price reversal up is positive.

GOLD (DEC): Support for gold today comes in near 377.73, while resistance is pegged at 393.53. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 393.53. Consider buying pull-backs since daily studies are bullish. With the close over the 1st swing resistance number, the market is in a moderately positive position. The market’s short-term trend is positive on a close above the 9-day moving average. The outside day up is a positive signal. The upside closing price reversal on the daily chart is somewhat bullish.

COPPER MARKET RECAP

10/29/2003

The copper market got a big lift Wednesday off news that Phelps Dodge wasn’t inclined to return to full production. In other words, the news of increased production two weeks ago is countervailed. It is helpful that US equity market action and Fed Reserve dialogue continues to be supportive to copper pricing. However, we did note in the newswires Wednesday that South American copper production is showing signs of rising and that could eventually temper upside gains. However, as long as the daily exchange stocks readings continue to show a pattern of consistent declines the news of rising production it mitigated.

ENERGY MARKET RECAP

10/29/2003

The weekly inventory readings showed a moderate crude stock building the DOE and a marginal gain in API crude stocks. Gasoline stocks showed rather significant declines in both API and DOE readings and that certainly countervailed the potential negative tilt off the crude stocks change. Distillate stocks were slightly higher and not a significant issue. The refinery-operating rate also rose which could be considered a negative development. After early gains it certainly appeared as if the inventory markets killed the bull interest.

Technical Outlook

CRUDE OIL (DEC): 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 28.34 and below there at 27.99, with resistance pegged at 29.49 and 30.29. The market’s close on the 9-day moving average is neutral. . With a reading under 30, the 9-day RSI is approaching oversold levels.

UNLEADED GAS (DEC): Momentum studies are declining, but have fallen to oversold levels. The next downside target is 77.83. The swing indicator gave a moderately negative reading with the close below the 1st support number. Resistance today is at 84.13, while support should be found around 77.83. 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. Short-term indicators on the defensive. Consider selling an intraday bounce.

HEATING OIL (DEC): The market is in a bearish position with the close below the 2nd swing support number. Heating oil should encounter support around 77.39, with resistance is at 82.59. 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. Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 77.39. The outside day down is a negative signal. The daily closing price reversal down puts the market on the defensive.

CORN MARKET RECAP

10/29/2003

The corn market traded on both sides of unchanged but then managed to roar higher into the close. Stop loss buying and outright fund buying is reportedly fueling the run. Weekly export expectations in corn call for a moderately large export tally of 1,000,000 to 1,350,000 tons Thursday morning compared to last weeks 754,000 tons. Argentine corn farmers are expected to see a harvest of 13.3 million metric tons and that is 1.7 million less than previously forecast and most of that is because of reduced area!

Technical Outlook

CORN (DEC) 10/30/03: Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 257 . The market’s close above the 2nd swing resistance number is a bullish indication. Market resistance comes in at 257 today, with support at 236 . 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.

SOY COMPLEX RECAP

10/29/2003

The soybean complex managed more significant gains on the session but did see some back and forth trade during the session. In the end prices closed very firm and expecting additional Chinese buying. The sales posted early in the session Wednesday were 113,000 tons to an unknown destination and 275,000 tons to China so the hope for big exports is certainly justified. Weekly export expectations in soybeans call for a whopping 1,000,000 to 1,600,000 tons Thursday morning compared to last weeks 1,012,100 tons. If the US exports reach 1.5 million the US will have sold 60% of the total annual exports compared to 40%! So far the market is not rationing supply.

Technical Outlook

SOYBEANS (JAN) 10/30/03: A new contract high was made on the rally. A positive setup occurred with the close over the 1st swing resistance. The next area of resistance is around 814 1/2 and 820 3/4, while 1st support hits today at 792 1/2 and below there at 776 3/4. 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 820 3/4. 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 259.2. The rally brought the market to a new contract high. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session. First resistance comes in at 257.7, with support at 251.9. 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 90, the 9-day RSI indicates the market is extremely overbought.

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 26.00. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Daily swing resistance is found at 27.34 and above there at 27.68. Support should be encountered at 26.50 and 26.00.

WHEAT MARKET RECAP

10/29/2003

US wheat prices finished moderately lower despite potentially supportive outside market action. European wheat prices were higher but the US market finished lower off potentially negative upcoming weather patterns in the US. The trade is still pretty much lost with respect to what the impact from China will be and in general the wheat market is wrestling with the clash of bearish US weather and the uncertain import demand from China. Weekly export expectations in wheat call for 400,000 to 700,000 tons compared to last weeks 592,100 tons.

Technical Outlook

WHEAT (DEC) 10/30/03: The downside closing price reversal on the daily chart is somewhat negative. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Look for near-term support at 368 1/2 and below there at 362 1/4, with resistance levels at 382 1/2 and 390 1/4. 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 390 1/4. The 9-day RSI over 70 indicates the market is approaching overbought levels.

LIVE CATTLE RECAP

10/29/2003

Cattle closed limit-up in another active trading session with a 300 point range. The market opened sharply lower but found solid buying support from fund and speculative traders due to the discount to the cash market and the tight supply of cattle which are ready for slaughter. Supply bulls are pointing out the extremely tight showlist but demand bears are seeing low packer bids and surging retail values which may discourage usage. Boxed-beef cut-out values were down $3.66 to $170.29 from near $200 early last week. Slaughter was just 125,000 head as compared with trade expectations at 128,000-131,000 head. Slaughter for the week reached just 366,000 head from 379,000 last week and 392,000 head last year at this time.

Technical Outlook

CATTLE (DEC) 10/30/03: The daily stochastics have crossed over up which is a bullish indication. The next upside target is 93.67. A positive setup occurred with the close over the 1st swing resistance. Consider buying pull-backs since daily studies are bullish. Support should be encountered at 89.92 and below there at 87.67. Market resistance is at 92.92 and then again at 93.67. The outside day up and close above the previous day’s high is a positive signal. 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.

LEAN HOGS RECAP

10/29/2003

December hogs closed 117 higher on the session as futures re-captured most all of Tuesday’s losses. Short covering provided for much of the support which was triggered by news that the cash market was higher at some locations which was a surprise. A bullish reaction to a bearish weekly cold storage report and ideas that the slaughter pace is unlikely to move any higher than the current hefty weekly pace near 2.1 million head added to the positive tone. Pork values were higher in spite of the recent surge in production which indicated that demand may be a bit better than expected due to surging retail beef values. Weekly average weights for Iowa/Minn for the week ending October 25th came in at 265.6 pounds as compared with 265 the previous week and 262.5 pounds last year. Weights normally increase at this time of the year and continue to rise into early December. Last year, weights peaked out at just over 266 pounds which was near record high.

Technical Outlook

HOGS (DEC) 10/30/03: The market’s close above the 2nd swing resistance number is a bullish indication. Resistance levels comes in at 53.37 and 53.80 today, while support is around 51.92 and then 50.90. 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 50.90.

COCOA MARKET RECAP

10/29/2003

The cocoa market seemed to get support from stop loss buying and not necessarily from industry buying. There were indications that Ivory Coast farmers were ready to blow their top again and that might have prompted part of the gains Wednesday. In fact, Press reports suggested that the Farmers were set for a “General Revolt” and that could mean any number of things. While the farmers don’t look to get violent there is a history of violence erupting and with the majority of the main crop harvest yet to move to export position the threat of any tension is not to be ignored.

Technical Outlook

COCOA (DEC)10/30/03 The market setup is supportive for early gains with the close over the 1st swing resistance. Cocoa should run into resistance at 1445 and above there at 1456 with support at 1418 and 1402. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 1455.75. Short-term indicators suggest buying dips today.

COFFEE MARKET RECAP

10/29/2003

December coffee closed sharply lower (down 325) on the session and gave back nearly all of the gains off of the early October lows as fund selling accelerated as the session progressed. One large fund was a noted seller early and then a chain reaction of fund sellers and a lack of new buying interest from commercials led to the collapse. The weather looks favorable for an improving outlook for the 2004/2005 crop in Brazil as rains is still in the forecast into the weekend. CSCE exchange stocks were up 9,284 bags to 4.46 million bags with 38,756 bags pending review.

Technical Outlook

COFFEE (DEC)10/30/03 The gap lower price action on the day session chart is a bearish indicator for trend. Could see some early pressure today given the market’s negative setup with the close below the 2nd swing support. 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 65.45.The Coffee contract should run into resistance at 63.10 and above there at 65.45 with support at 59.5 and 58.25. 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

10/29/2003

The market drifted lower in quiet trade as there seems to be a lack of near-term fundamental news to boost increased interest from the trade in either direction. Trade house buying provided some support. At the tail end of the center-south harvest in Brazil, the producer selling has slowed. This could be a function of the current low price which is too low for producers to sell, the strong currency in Brazil or a move to shift more cane to the ethanol industry. There seems to be plenty of cane in Brazil with the industry gearing up for a major expansion of usage within the country through increased vehicle consumption and would also like to become a major world exporter of cane based fuel.

Technical Outlook

SUGAR (MAR) 10/30/03: The market’s close below the pivot swing number is a mildly negative setup. Swing resistance comes in at 6.21, with support found at 6.05. The upside crossover (9 above 18) of the moving averages suggests a developing short-term uptrend. 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 6.21.

COTTON MARKET RECAP

10/29/2003

December cotton closed 75 higher on the session and near this weeks and Monday’s highs as speculative buyers continue to drive futures higher and world production news continues to support. On top of the well advertised production woes in China, Pakistan officials indicated a crop size of near 7.8 million bales as compared with the last USDA forecast at 8.5 million bales. It may be tough to exceed last weeks export sales of 634,000 bales (highest since 1994) but the trade is looking for sales near 400,000-600,000 bales. Shipments are expected to come in near 90,000-120,000 bales. The annualized mill usage for last month was reported by the Census Bureau at 6.17 million bales which was in-line with trade expectations.

Technical Outlook

COTTON (DEC) 10/30/03: 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. Next resistance area comes in at 83.17 and then again at 83.50, while support is targeted at 82.29 and 81.74. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 83.50. The 9-day RSI over 70 indicates the market is approaching overbought levels. A new contract high was made on the rally.