Why Copper Bulls Have The Edge Here

Technical Outlook

#BONDS (SEP) 07/06/04: 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. Near-term resistance for bonds
is at 109.07 and then again at 110.08, while swing support hits at 106.28 and
below there at 105.18. 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 110.08. The 9-day RSI over 70 indicates the market is
approaching overbought levels.

T-NOTES(SEP) Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
112.01. The market’s close above the 2nd swing resistance number is a bullish
indication. Near-term resistance for the T-Notes is at 111.10 and then again at
112.01, while swing support hits at 109.22 and below there at 108.25. 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.

 

STOCK INDICES RECAP

7/2/2004

The stock market accepted the softer than
expected payrolls rather efficiently and also digested the softer than expected
factory orders released without excessive negativeness. In other words, those
fearing lower corporate earnings off the softer economy were almost exactly
balanced by those cheered on by the idea that the Fed would not be poised to
raise rates anytime soon! In short, the news was disappointing but not life
threatening to the bull camp. However, a number of traders suggested that reward
has declined while risks have increased. In other words the long side might have
become less attractive.

Technical Outlook

#S&P500 (SEP) 07/06/04: The market’s close below
the pivot swing number is a mildly negative setup. Underlying support comes in
at 1122.40 and 1119.05, with overhead resistance at 1129.20 and 1132.65. 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 1119.05.

S&P E-Mini (SEP): Momentum studies trending lower
at mid-range could accelerate a price break if support levels are broken. The
next downside objective is 1118.63. The market tilt is slightly negative with
the close under the pivot. Near-term resistance for the S&P Mini is at 1128.75
and then again at 1132.63, while swing support hits at 1121.75 and below there
at 1118.63. A negative signal for trend short-term was given on a close under
the 9-bar moving average.

NASDAQ (SEP) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. It is a
slightly negative indicator that the close was lower than the pivot swing
number. The market should run into resistance at 1496.25 and above there at
1503.63 with support at 1479.75 and 1470.63. Negative momentum studies in the
neutral zone will tend to reinforce lower price action. The next downside target
is 1470.6.

MINI DOW (SEP) The market’s close below the 9-day
moving average is an indication the short-term trend remains negative. The
market should run into resistance at 10309 and above there at 10351 with support
at 10236 and 10205. Negative momentum studies in the neutral zone will tend to
reinforce lower price action. The next downside target is 10205. It is a
slightly negative indicator that the close was lower than the pivot swing
number.

 

CURRENCY MARKET RECAP

7/2/2004

Even prior to the US economic numbers released no
Friday morning the Dollar was showing signs of failure. With the US economic
reports Friday all coming in softer than expected, the market is sold on the
idea that the US economy is slowing. Therefore, the Dollar has lost favor and
will probably see little support from the idea that US interest rates are set to
go higher. The primary benefactors of the Dollar slide was the Euro and the
Swiss which were the most vulnerable currencies just a week ago. The trade
thinks that a large portion of the action Friday was technical balancing and
that the Yen will regain favor quickly.

Technical Outlook

#CURRENCIES 07/06/04: YEN (SEP): The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative. It is a slightly negative indicator that the close was lower
than the pivot swing number. Swing resistance is targeted at 93.06 and above
there at 93.46, with the yen finding support around 92.06 and below there at
91.46. Negative momentum studies in the neutral zone will tend to reinforce
lower price action. The next downside target is 91.46.

EURO (SEP): Momentum studies are trending higher,
but have entered overbought levels. The near-term upside objective is at 1.2443.
The market is in a bearish position with the close below the 2nd swing support
number. Swing support for the Euro comes in at 1.2091, with overhead resistance
at 1.2443. The market’s short-term trend is positive on a close above the 9-day
moving average. The gap down on the day session chart is bearish with more
selling pressure possible today.

 

PRECIOUS METALS RECAP

7/2/2004

In general gold was cheered by the developments
Friday morning, as the market doesn’t have to fear sharply rising US interest
rates and the Dollar appears to be thrown back into a downside track. The
industrial metals managed mostly positive action Friday but platinum failed to
show the same type of favor as silver and gold. Some even suggested that gold
would see a slight increase in flight to quality interest now that the economy
is in question again. Some traders also suggested that terrorism fears providing
some buying.

Technical Outlook

#P-METALS 07/06/04: SILVER (SEP): With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
Initial support for silver is at 589.3 and below there at 574.1 with resistance
likely at 601.1 and 613.8. The market’s close above the 9-day moving average
suggests the short-term trend remains positive. The daily stochastics have
crossed over up which is a bullish indication. The next upside target is 601.1.
The outside day up and close above the previous day’s high is a positive signal.
The daily closing price reversal up is positive.

GOLD (AUG): Support for gold today comes in near
388.98, while resistance is pegged at 406.78. 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 388.98. The market’s close above the 2nd swing
resistance number is a bullish indication. 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

7/2/2004

It’s pretty clear that the copper market isn’t
directly tracking the ebb and flow of the macro economic case as the US numbers
Friday could have caused a number of longs to move to the sidelines. However,
the market is still seeing the threat of strike at two facilities and that gives
the bull camp an edge. The Chile strike was postponed by 5 days in a cooling off
move and that is certainly an item that tempers the bull look.

 

ENERGY MARKET RECAP

7/2/2004

The energy complex might have overreacted to the
Russian supply threats inspired by the Yukos situation but with the idea that
OPEC might not raise production in August the bears no longer have total control
over prices. It is possible that the slightly softer US economic information
undermines the energy complex but recently macro economic sentiment really
hasn’t been able to influence prices because the supply focus was so dominant.
Unleaded gas did seem to show the most strength Friday and that is probably a
function of the massive weekend gasoline demand expectation.

Technical Outlook

#ENERGIES 07/06/04: CRUDE OIL (AUG): It is a
mildly bullish indicator that the market closed over the pivot swing number.
Support for crude is keyed on 38.00 and below there at 37.73, with resistance
pegged at 38.79 and 39.31. 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 39.31.

UNLEADED GAS (AUG): Studies are showing positive
momentum, but are now in overbought territory so some caution is warranted. The
next upside target is 126.97. With the close higher than the pivot swing number,
the market is in a slightly bullish posture. Resistance today is at 126.97,
while support should be found around 120.97. The market’s close above the 9-day
moving average suggests the short-term trend remains positive.

HEATING OIL (AUG): It is a mildly bullish
indicator that the market closed over the pivot swing number. Heating oil should
encounter support around 105.42, with resistance is at 109.72. The market’s
short-term trend is positive on a close above the 9-day moving average. Momentum
studies are trending higher, but have entered overbought levels. The near-term
upside objective is at 109.72. The rally brought the market to a new contract
high. The daily closing price reversal down puts the market on the defensive.

 

CORN MARKET RECAP

7/2/2004

December corn closed 22 1/2 lower on the week.
The market remains in a long liquidation mode with traders viewing the weather
forecast as near ideal for pollination during the first half of July. July
deliveries were 305 contracts this morning. Sparks Companies pegged the corn
crop at 10.431 billion bushels as compared with 10.114 billion last year and
10.425 billion in the last USDA supply/demand report. The USDA pegged usage for
the 2004/2005 season at 10.505 billion bushels. Basis was steady but trade house
selling helped to pressure the market with December corn testing yesterday’s
lows. The next downside swing objective on this weeks downside break-out comes
in at 261 1/4 for December corn. It will take a move over 270 to help confirm a
technical reversal low from Thursday. Weather will set the tone for next week
with resistance at 271 1/2 and then 276.

Technical Outlook

#CORN (DEC) 07/06/04: Daily stochastics are
trending lower, but have declined into oversold territory. The next downside
objective is now at 260 1/4. The market’s close below the 1st swing support
number suggests a moderately negative setup for today. Market resistance comes
in at 266 1/4 today, with support at 260 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

7/2/2004

August Soybeans closed 37 3/4 lower on the week,
with November soybeans down 57 1/2. The market continues to see separate trade
direction for old crop and new crop soybeans with old crop being supported by
talk that some mid-west crushers will be forced to shut operations during July
due to scarce supply while new crop November futures remain under selling
pressure from the weather forecast for near perfect growing conditions for the
first half of July. While forecast models on Tuesday morning will give traders a
better indication of mid-July weather, November soybeans came under pressure
from fund and speculative selling and moved to the lowest level since early
February. There were still no deliveries against the July contracts which helped
push July meal to the highest level since May 13th. Sparks Companies pegged the
soybean crop at 2.92 billion bushels as compared with 2.42 billion last year and
2.965 billion in the last USDA supply/demand report. The move under the June
lows leaves a technical swing count down to 630 1/2 for November soybeans with
resistance at 660 1/2 and 667 1/2.

Technical Outlook

#SOYBEANS (NOV) 07/06/04: The swing indicator
gave a moderately negative reading with the close below the 1st support number.
The next area of resistance is around 661 1/2 and 674 1/2, while 1st support
hits today at 643 and below there at 637 1/2. 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 637 1/2. Short-term indicators on the defensive. Consider selling an
intraday bounce.

MEAL (DEC): Daily stochastics are trending lower,
but have declined into oversold territory. The next downside objective is now at
198.2. The outside day down is a negative signal. The daily closing price
reversal down puts the market on the defensive. First resistance comes in at
207.3, with support at 200.3. The market’s short-term trend is negative as the
close remains below the 9-day moving average. The market’s close below the 1st
swing support number suggests a moderately negative setup for today. Daily
studies pointing down suggests selling minor rallies.

BEAN OIL (DEC): The market’s close below the
9-day moving average is an indication the short-term trend remains negative. The
daily stochastics have crossed over down which is a bearish indication. The next
downside target is 23.53. It is a slightly negative indicator that the close was
lower than the pivot swing number. Daily swing resistance is found at 24.57 and
above there at 24.83. Support should be encountered at 23.92 and 23.53.

 

WHEAT MARKET RECAP

7/2/2004

September wheat closed 9 lower on the week. The
early break to the lowest level since October was met with a lack of new selling
interest which helped trigger the move higher on the day into the mid-session.
Short-covering on ideas that the market is oversold, lighter deliveries and
declining production forecasts helped to support. Sparks Companies pegged US
2004 wheat production at 2.058 billion bushels as compared with 2.061 billion as
the last USDA forecast. Deliveries were 263 contracts this morning as compared
with 1140 contracts yesterday as commercial stoppers emerged to absorb. Support
for September wheat comes in at 337 with resistance at 344 1/2 and 352 1/4.

Technical Outlook

#WHEAT (DEC) 07/06/04: 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 350 3/4
and below there at 346 3/4, with resistance levels at 357 and 359 1/4. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative. The daily stochastics have crossed over up which is a
bullish indication. The next upside target is 359 1/4.

 

LIVE CATTLE RECAP

7/2/2004

The market drifted lower in quiet trade with many
traders taking a “wait and see” attitude toward the market until the USDA
releases results of the 2nd mad cow inconclusive quick test result reported on
Tuesday which is likely to be announce early next week. Boxed-beef cut-out
values were down $1.39 to $142.35 as compared with $144.11 last week at this
time. Talk that Japan may ease its stance on insisting on 100% testing of US
cattle for mad cow helped to provide some underlying support.

Technical Outlook

#CATTLE (AUG) 07/06/04: Momentum studies are
declining, but have fallen to oversold levels. The next downside target is
84.50. It is a slightly negative indicator that the close was lower than the
pivot swing number. Support should be encountered at 84.90 and below there at
84.50. Market resistance is at 85.72 and then again at 86.15. The market’s close
below the 9-day moving average is an indication the short-term trend remains
negative.

 

LEAN HOGS RECAP

7/2/2004

Ideas that the break on Thursday was overdone and
expectations for steady cash markets early next week helped to support light
buying in hogs with a quiet, holiday trade. Support held at yesterday’s lows
which added to the positive tone as the market did not see follow-through
technical selling from the reversal. The collapse in belly futures on the week
and weakness in cattle helped to keep the tone negative but the discount of
futures to cash helped support. The 2-day lean index fell for the third day in a
row. The Index for the period ending June 30th was down 65 cents to 80.40 as
compared with 81.47 one week previous.

Technical Outlook

#HOGS (AUG) 07/06/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Resistance levels
comes in at 77.50 and 78.00 today, while support is around 76.32 and then 75.65.
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 78.00.

 

COCOA MARKET RECAP

7/2/2004

Cocoa prices thrust down to a new contract low
but did manage to reject a large portion of the losses. However, it might be
difficult to dredge up a reason to bottom as supply continues to flow and demand
is steady and slow. The weather in Africa continues to favor large production
and that in turn means that the bears will control until the market is
excessively short or the political condition scares the shorts away.

Technical Outlook

COCOA (SEP) 07/06/04 The sell-off took the market
to a new contract low. The close below the 1st swing support could weigh on the
market. Cocoa should run into resistance at 1333 and above there at 1346 with
support at 1302 and 1284. Momentum studies are declining, but have fallen to
oversold levels. The next downside target is 1284.25. Short-term indicators on
the defensive. Consider selling an intraday bounce.

 

COFFEE MARKET RECAP

7/2/2004

September coffee managed a new low for the move
but did not take out control lows. It is clear that weather is expected to
remain mild and with the market not expecting the threat of cold at least until
the later part of next week the small specs decided to exit positions. News that
coffee output from Peru actually increased by 17% in April, added into the
slightly bearish tide of sentiment in the action Friday. Honduras also projected
their October through June export tally to be up 21% and that simply leaves the
crush of supply hanging over the market. Honduras Oct-June production was also
projected to rise by 22% rounding out the all bear news flow.

Technical Outlook

COFFEE (SEP) 7/6/04 There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. The 9-day RSI under 30 indicates the market is approaching
oversold levels. The daily stochastics have crossed over down which is a bearish
indication. The next downside objective is now at 70.05. The Coffee contract
should run into resistance at 73.60 and above there at 75.55 with support at
70.85 and 70.05. The market’s short-term trend is negative as the close remains
below the 9-day moving average.

 

SUGAR MARKET RECAP

7/2/2004

The sugar market found good trade house support
on the early break and a surge in fund buying in London and New York trigger the
sharply higher close (up 22) to new contract highs and to the highest level
since March of 2003 for nearby futures. Expectations of good import demand from
non-routine importers such as India, China and Russia for the second half of the
year helped support. In addition, high energy prices have contributed to talk of
growing consumption of cane in the future. October sugar gained 27 points on the
week.

Technical Outlook

#SUGAR (OCT) 07/06/04: The rally brought the
market to a new contract high. The market’s close above the 2nd swing resistance
number is a bullish indication. Swing resistance comes in at 8.19, with support
found at 7.63. The market’s short-term trend is positive on a close above the
9-day moving average. Momentum studies are trending higher, but have entered
overbought levels. The near-term upside objective is at 8.19.

 

COTTON MARKET RECAP

7/2/2004

December cotton closed lower again and managed to
make another fresh contract low in the process. Supposedly options action added
into the pressure but it would seem like weather is exceedingly bearish as crop
conditions are nearly ideal. Sparks pegged cotton production to be 18.2 million
bales and world production to be 1-5 million bales. Sparks pegged the carry to
be 4.9 million bales and that simple leaves control of the market in the bear
camp. The USDA pegged use at 17.3 million which means that the crop is poised to
produce a big surplus.

Technical Outlook

#COTTON (OCT) 07/06/04: The market’s close below
the 9-day moving average is an indication the short-term trend remains negative.
It is a slightly negative indicator that the close was lower than the pivot
swing number. Next resistance area comes in at 50.05 and then again at 50.73,
while support is targeted at 48.95 and 48.53. Momentum studies are declining,
but have fallen to oversold levels. The next downside target is 48.53. The 9-day
RSI under 30 indicates the market is approaching oversold levels. The sell-off
took the market to a new contract low.