Who Benefits From A Weak Dollar?

Technical Outlook

#BONDS (JUN) 4/7/2004: The market setup is
supportive for early gains with the close over the 1st swing resistance.
Near-term resistance for bonds is at 110.30 and then again at 111.04, while
swing support hits at 110.10 and below there at 109.28. A negative signal for
trend short-term was given on a close under the 9-bar moving average. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The next downside objective is 109.28. The market is approaching over
sold levels on an RSI reading under 30.

T-NOTES(JUN) Daily stochastics are trending
lower, but have declined into oversold territory. The next downside objective is
now at 112.12. With the close over the 1st swing resistance number, the market
is in a moderately positive position. Near-term resistance for the T-Notes is at
113.05 and then again at 113.09, while swing support hits at 112.22 and below
there at 112.12. The market’s short-term trend is negative as the close remains
below the 9-day moving average.

 

STOCK INDICES RECAP

4/6/2004

The stock market started out weak, saw prices
become moderately weak at mid morning and then managed to bounce as Chemical
stocks were given a decent upgrade by some analysts. However, with US Treasury
prices firm and the Dollar down the stock market was unable to muster consistent
buying interest. Even after some favorable Fed dialogue the market basically
languished but seemed as if it could still forge a rally under the right
circumstances. The US seemed to regain a measure of control but the Arab States
think that tensions inside Iraq are set to explode and that is undermining
sentiment.

Technical Outlook

#S&P500 (JUN) 4/7/2004: It is a slightly negative
indicator that the close was under the swing pivot. Underlying support comes in
at 1142.15 and 1139.48, with overhead resistance at 1147.45 and 1150.08. The
close above the 9-day moving average is a positive short-term indicator for
trend. Daily stochastics have risen into overbought territory which will tend to
support reversal action if it occurs. The near-term upside objective is at
1150.08.

S&P E-Mini (JUN): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 1151.75. 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 1148.00 and then again at 1151.75, while swing support hits at
1141.00 and below there at 1137.75. The market’s close above the 9-day moving
average suggests the short-term trend remains positive.

NASDAQ (JUN) A positive signal for trend
short-term was given on a close over the 9-bar moving average. The close below
the 1st swing support could weigh on the market. The market should run into
resistance at 1495.00 and above there at 1505.00 with support at 1481.00 and
1477.00. Rising stochastics at overbought levels warrant some caution for bulls.
The next upside objective is 1505.00.

MINI DOW (MAR) The daily closing price reversal
down is a negative indicator for prices. The close above the 9-day moving
average is a positive short-term indicator for trend. The market should run into
resistance at 10564 and above there at 10597 with support at 10487 and 10443.
Daily stochastics have risen into overbought territory which will tend to
support reversal action if it occurs. The near-term upside target is at 10597.
The close over the pivot swing is a somewhat positive setup.

 

CURRENCY MARKET RECAP

4/6/2004

The Dollar is without clear-cut direction but
remains generally weakened. Certainly the Pound is garnering the most benefit
from the weakness in the Dollar followed closely by the Euro. However, we one
takes into consideration the poor economic numbers produced from the Euro zone
Tuesday morning one should doubt the sustainability of strength in the Euro. So
far, the US Dollar has been very little credit for the improvement in the US
economy or the trade hasn’t really bought into an improvement in the US economy.

Technical Outlook

#CURRENCIES 4/7/2004: YEN (JUN): A negative
signal for trend short-term was given on a close under the 9-bar moving average.
The gap lower on the day session chart is bearish and puts the market on the
defensive. The close below the 1st swing support could weigh on the market.
Swing resistance is targeted at 95.09 and above there at 95.26, with the yen
finding support around 94.53 and below there at 94.14. Stochastics turning
bearish at overbought levels will tend to support lower prices if support levels
are broken. The next downside objective is 94.14. Bearish daily studies indicate
selling minor rallies this session.

EURO (JUN): 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 1.1992. The defensive setup, with the
close under the 2nd swing support, could cause some early weakness. Swing
support for the Euro comes in at 1.1992, with overhead resistance at 1.2142. The
close below the 9-day moving average is a negative short-term indicator for
trend. The close below the 40-day moving average is an indication the
longer-term trend is down. More selling pressure is likely given yesterday’s gap
lower price action on the day session chart.

 

PRECIOUS METALS RECAP

4/6/2004

The gold market started out higher and added to
the gains into the close and finished within a $1 of the highs. Certainly the
ongoing tensions in Iraq provided a lift but the real driving force of the
market was the weakness in the Dollar. It was clear again that silver was the
primary leadership market late in the session with the gold market leading the
way early. A number of traders suggest that trade below 88.88 in the June Dollar
Index would ignite speculative interest in gold in addition to the long interest
seen Tuesday.

Technical Outlook

#P-METALS 4/7/2004: SILVER (MAY): The market
setup is supportive for early gains with the close over the 1st swing
resistance. Initial support for silver is at 813.5 and below there at 803.5 with
resistance likely at 822.2 and 830.5. A positive signal for trend short-term was
given on a close over the 9-bar moving average. Stochastics turning bearish at
overbought levels will tend to support lower prices if support levels are
broken. The next downside objective is 803.5. The market is approaching
overbought levels with an RSI over 70.

GOLD (JUN): Support for gold today comes in near
416.63, while resistance is pegged at 422.43. 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 416.63. The close over the pivot
swing is a somewhat positive setup. The close below the 9-day moving average is
a negative short-term indicator for trend.

 

COPPER MARKET RECAP

4/6/2004

While many suggest that copper is behaving like a
precious metals market we do think that the setback in the Dollar provided a
lift to US copper. With US copper prices falling sharply on Monday and the
Dollar coming in weaker foreign buyers had to find favor with the US price below
1.30. However, it should also be noted that US economic information was positive
Tuesday and the Nikkei was up sharply leading to positive attitudes in Asia.
Therefore, the copper market impressively reversed recent selling pressure and
stands a decent chance of respecting support.

 

ENERGY MARKET RECAP

4/6/2004

The energy complex managed what might be judged
later to be a short covering move ahead of the weekly inventory reports. Some
traders suggested that the energy complex was seeing increased buying interest
because of the rising tensions in Iraq. So far the production areas in Iraq
haven’t been directly impacted but the market might be right in factoring in
some risk premium for the Iraqi exports as they have returned to a level that is
critical to world supply. In other words a shut down of Iraqi exports is more
than a 1 million barrel per day development.

Technical Outlook

#ENERGIES 4/7/2004: CRUDE OIL (MAY): There could
be more upside follow through since the market closed above the 2nd swing
resistance. Support for crude is keyed on 34.60 and below there at 34.05, with
resistance pegged at 35.35 and 35.55. 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 34.05.

UNLEADED GAS (MAY): Momentum studies trending
lower at mid-range could accelerate a price break if support levels are broken.
The next downside objective is 104.55. The market setup is supportive for early
gains with the close over the 1st swing resistance. Resistance today is at
109.15, while support should be found around 104.55. A negative signal for trend
short-term was given on a close under the 9-bar moving average.

HEATING OIL (MAY): There could be more upside
follow through since the market closed above the 2nd swing resistance. Heating
oil should encounter support around 84.57, with resistance is at 89.57. The
close above the 9-day moving average is a positive short-term indicator for
trend. The crossover up in the daily stochastics is a bullish signal. The
near-term upside target is at 89.57.

 

CORN MARKET RECAP

4/6/2004

Weakness in the other grains and follow-through
technical selling from the reversal from contract highs yesterday has added to
the selling pressures with long liquidation selling. News from US exports who
announced a sale of 220,000 tons of corn to unknown destination helped provide
some support. Of the sale, 165,000 tons is old crop and 55,000 tons is new crop.
Gulf basis levels were firm with talk that producer selling slowed on the weaker
futures market. The trade is beginning to focus on the weather for plantings
which should move into full swing into mid-April to late April. As a result,
traders are beginning to monitor the weather. The 6-10 day forecast from the
National Weather Service (April 11th to 15th) calls for below normal
temperatures and below normal precipitation. Some private forecasters are
calling for heavy rains to move into the Midwest for next week. The CBOT raised
initial margins in corn to $608, up from $540 previous which was seen as a
possible factor to encourage long liquidation selling from speculators.

Technical Outlook

#CORN (MAY) 4/7/2004: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The near-term upside target is at 331 2/4. It is a slightly negative
indicator that the close was under the swing pivot. Market resistance comes in
at 331 2/4 today, with support at 322 2/4. The close above the 9-day moving
average is a positive short-term indicator for trend.

 

SOY COMPLEX RECAP

4/6/2004

Follow-through technical selling from yesterday’s
reversal and long liquidation selling helped to provide for the weakness in the
soybeans complex. The CBOT raised initial margins in soybeans to $2160, up 6.7%
which was seen as a possible factor to encourage long liquidation selling from
speculators. Traders expect that soybeans and products will begin to move into
the export pipeline from South American which could cool world prices. The
market is also a little apprehensive over how the USDA may incorporate the
“extra” 39 million bushels found from the quarterly grain stocks report in the
Supply/Demand report for release on Thursday morning. Weakness in the China
exchange overnight and positioning ahead of the Supply/demand report has added
to the bearish tone.

Technical Outlook

#SOYBEANS (MAY) 04/07/04 The gap lower on the day
session chart is bearish and puts the market on the defensive. The market tilt
is slightly negative with the close under the pivot. The next area of resistance
is around 1018 and 1028 2/4, while 1st support hits today at 1000 and below
there at 992 2/4. A negative signal for trend short-term was given on a close
under the 9-bar moving average. Momentum studies trending lower at mid-range
could accelerate a price break if support levels are broken. The next downside
objective is 992 2/4.

MEAL (MAY): 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 317.2. More selling pressure is
likely given yesterday’s gap lower price action on the day session chart. First
resistance comes in at 324.3, with support at 319.3. The close above the 9-day
moving average is a positive short-term indicator for trend. It is a slightly
negative indicator that the close was under the swing pivot.

BEAN OIL (MAY): A negative signal for trend
short-term was given on a close under the 9-bar moving average. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The next downside objective is 31.54. It is a slightly negative
indicator that the close was lower than the pivot swing number. Daily swing
resistance is found at 32.81 and above there at 33.12. Support should be
encountered at 32.02 and 31.54.

 

WHEAT MARKET RECAP

4/6/2004

The firm close and close above the opening is a
positive technical development for the market, especially with the other grains
under pressure. A lack of selling near the close and some light commercial
buying helped support the gains. Early selling pressure came from overnight news
of improving crop conditions and from follow-through technical selling from the
reversal yesterday. A dry weather outlook for the western plains has helped
provide some underlying support while the improving crop conditions on the week
from Kansas are an offset. Kansas crops improved to 43% good to excellent from
37% last week. For the first weekly progress report of the year, winter wheat
crops rated in good to excellent condition were pegged at 48% as compared with
51% last year at this time. Deliverable grade wheat stocks at Toledo for the
week of April 2nd were 14.047 million bushels from 14.678 last week and 10.407
million bushels last year. Chicago and St. Louis stocks were slightly lower.

Technical Outlook

#WHEAT (MAY) 4/7/2004: The daily closing price
reversal up is a positive indicator that could support higher prices. The market
has a slightly positive tilt with the close over the swing pivot. Expect
near-term support around 410 and below there at 402, with resistance levels at
422 2/4 and 427. 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 427.

 

LIVE CATTLE RECAP

4/6/2004

The market closed moderately higher and June to
the highest level since March 18th with a slow-down in production and sharply
higher trade in the beef market helping to support. Boxed-beef cut-out values
were up $3.69 cents to $146.75 as compared with $138.04 last week at this time.
Cash cattle is expected to trade higher this week with talk of $85.00 as a
strong possibility which would be up $1.00 from last week and up about 800
points from the June close. Packers claim that profit margins are so bad that
they have reduced slaughter operations. Slaughter this week has reached 181,000
head as compared with 247,000 last week and 244,000 head last year at this time.
The Japanese Agriculture Minister indicated to the USDA Ag Secretary that Japan
can not end its ban on imports of US beef before May unless the US “implements
the same measures as we do” to prevent mad cow. The letter did not mention
testing all animals which traders saw as encouraging to an eventual end to the
ban.

Technical Outlook

#CATTLE (JUN) 4/7/2004: 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 77.62. The market
has a slightly positive tilt with the close over the swing pivot. Support should
be encountered at 76.27 and below there at 75.50. Market resistance is at 77.32
and then again at 77.62. A positive signal for trend short-term was given on a
close over the 9-bar moving average.

 

LEAN HOGS RECAP

4/6/2004

April hogs pushed lower and moved under the
40-day moving average for the first time since January 28th with weakness in the
cash market and talk that pork demand will be weak through Easter helping to
trigger the selling. Peoria hogs were $1.00 lower on the day and the 2-day lean
Index was down 77 cents to 66.07 as compared with 68.24 one week earlier. Summer
months were sharply higher on the session supported by active buying from fund
traders and bullish technical signals. July and distant months moved into new
contract highs. For the weekly cold storage report, released this afternoon,
traders are looking for an out-movement of 250,000-750,000 pounds of bellies
from cold storage.

Technical Outlook

#HOGS (JUN) 4/7/2004: There could be more upside
follow through since the market closed above the 2nd swing resistance.
Resistance levels comes in at 75.92 and 76.47 today, while support is around
73.75 and then 72.12. The close above the 9-day moving average is a positive
short-term indicator for trend. Momentum studies trending lower from overbought
levels is a bearish indicator and would tend to reinforce lower price action.
The next downside target is now at 72.12.

 

COCOA MARKET RECAP

4/6/2004

Cocoa posted a very tight trading range Tuesday
but did manage some weakness before closing mostly unchanged. The Press reported
trade buying but volumes were low and interest was fleeting on both sides of the
market. It would seem that the lows Tuesday offer some type of critical support
but it could take deterioration in Ivory Coast tensions to wake prices up and
drive them out of the recent trading range. The Ivory Coast has announced plans
to curb smuggling and that might cause a flare in tensions from the rebel groups
as they have recently broke with the government.

Technical Outlook

COCOA (MAY) 04/07/04 The market has a slightly
positive tilt with the close over the swing pivot. Cocoa should run into
resistance at 1445 and above there at 1452 with support at 1420 and 1402.
Negative momentum studies in the neutral zone will tend to reinforce lower price
action. The next downside target is 1402.25.

 

COFFEE MARKET RECAP

4/6/2004

July coffee closed moderately higher on the
session after there was a slowdown in speculative selling shortly after the
opening. Fund buying late in the session helped support. A lack of new
fundamental news helped keep the market a bit choppy as traders await the
official estimate from Brazil on the size of the coffee crop which is expected
to be released in late April (26th or 27th). Selling from Vietnam producers has
slowed recently as London futures moved down to near the 2003 and 2004 lows.
Vietnam government reported exports for the October to March time frame were at
7.88 million bags, up 32.1% from last year. Daily exchange stocks were up 9,169
bags to 4.727 million bags with 65,107 bags pending review.

Technical Outlook

COFFEE (MAY) 4/7/04 The daily closing price
reversal up is positive. The market setup is supportive for early gains with the
close over the 1st swing resistance. Momentum studies are declining, but have
fallen to oversold levels. The next downside objective is now at 71.15. The
Coffee contract should run into resistance at 73.50 and above there at 73.95
with support at 72.1 and 71.15. The market’s short-term trend is positive on a
close above the 9-day moving average.

 

SUGAR MARKET RECAP

4/6/2004

The market continued to push higher and recover
from Fridays lows with light trade house buying emerging on a steady opening as
speculative selling has slowed. However, the market is trying to determine when
Russia and China buying might emerge and if this buying might begin before
speculators begin to roll out of long May positions. Pakistan officials are
considering a large export campaign this season and may test the market with a
25,000-50,000 ton selling tender before the Brazil crop moves onto the world
market late this spring. Pakistan production this year is expected to be up to
3.8 million tons as compared with 3.6 million last year and consumption which is
thought to be near 3.3 million tons.

Technical Outlook

#SUGAR (MAY) 4/7/2004: Market positioning is
positive with the close over the 1st swing resistance. Swing resistance comes in
at 6.57, with support found at 6.23. The close above the 9-day moving average is
a positive 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 6.23.

 

COTTON MARKET RECAP

4/6/2004

The market pushed moderately lower into the
mid-session but new crop December cotton managed to hold Monday’s lows and this
helped to pull futures off of the lows into the close. December cotton closed 37
lower on the session but up 73 from the lows of the day. Traders are not looking
for much in the way of surprises for the USDA supply/demand report on Thursday
morning with more talk about the possible increase in export sales for the
weekly sales report, also released on Thursday before the opening. Traders are
looking for the possibility that the USDA lowers the export forecast by
100,000-200,000 bales from a record 13.8 million bushels projected in the March
report. This would likely cause an increase in the ending stocks forecast by a
similar amount as compared with 3.55 million bales projected for ending stocks
in the March USDA Supply/Demand report.

Technical Outlook

#COTTON (MAY) 4/7/2004: A negative signal for
trend short-term was given on a close under the 9-bar moving average. The market
tilt is slightly negative with the close under the pivot. Next resistance area
comes in at 62.31 and then again at 62.86, while support is targeted at 61.14
and 60.52. Daily stochastics declining into oversold territory suggest the
selling may be drying up soon. The next downside objective is 60.52.