Why The Dollar Is Under Pressure

Technical Outlook

#BONDS (SEP) 06/28/04: With the close higher than
the pivot swing number, the market is in a slightly bullish posture. Near-term
resistance for bonds is at 106.10 and then again at 106.18, while swing support
hits at 105.23 and below there at 105.12. 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 106.18.

T-NOTES(SEP) Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
109.12. 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 109.06
and then again at 109.12, while swing support hits at 108.26 and below there at
108.20. The market’s short-term trend is positive on a close above the 9-day
moving average. Consider buying pull-backs since daily studies are bullish.

STOCK INDICES RECAP

6/25/2004

The stock market was cheered on by the favorable
Michigan sentiment readings and by the housing readings and seemed to mostly
discount the down ward revisions in the GDP report. However, it is clear from
the price action Friday morning that the bull camp is becoming a little
concerned about the overbought status of the market and it’s understandable if
some investors fret over the Iraqi hand over. Many in the trade think that
sentiment numbers are one of the top tier economic numbers to watch and that
would seem to give the bull camp a fresh confirmation of the recent bull track.
However, there is certainly the potential for anxiety in the coming 3-4 sessions
and that could facilitate profit taking.

Technical Outlook

#S&P500 (SEP) 06/28/04: The market is in a
bearish position with the close below the 2nd swing support number. Underlying
support comes in at 1128.95 and 1125.33, with overhead resistance at 1141.05 and
1149.53. The market’s short-term trend is negative as the close remains below
the 9-day moving average. 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 1125.33.

S&P E-Mini (SEP): A bearish signal was triggered
on a crossover down in the daily stochastics. Stochastics turning bearish at
overbought levels will tend to support lower prices if support levels are
broken. The next downside objective is 1124.75. There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. Near-term resistance for the S&P Mini is at 1141.00 and then
again at 1149.75, while swing support hits at 1128.50 and below there at
1124.75. A positive signal for trend short-term was given on a close over the
9-bar moving average.

NASDAQ (SEP) 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. The market should run
into resistance at 1513.25 and above there at 1519.13 with support at 1496.75
and 1486.13. Short-term indicators suggest buying dips today. Studies are
showing positive momentum, but are now in overbought territory so some caution
is warranted. The next upside target is 1519.1.

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 10437 and above there at 10509 with support
at 10329 and 10293. The daily stochastics have crossed over down which is a
bearish indication. 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 10293. The close below the
2nd swing support number puts the market on the defensive.

CURRENCY MARKET RECAP

6/25/2004

The Dollar started the session out with a short
covering bounce, was given a slight added lift by a weak German Ifo reading and
by the ending of the oil workers strike in Norway. However, the down ward
revisions in the US GDP report undermined the short covering tilt in the Dollar.
Fortunately for Dollar bulls a number of other currencies were under the
influence of technical adjustments and that kept buyers away from the Canadian
and the Yen. The fact that the Ifo suggested that the Euro zone economy isn’t
strong enough for rate hikes might be just enough to help the Dollar respect
this weeks support.

Technical Outlook

#CURRENCIES 06/28/04: YEN (SEP): The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The gap lower price action on the day session chart is a bearish
indicator for trend. The swing indicator gave a moderately negative reading with
the close below the 1st support number. Swing resistance is targeted at 93.36
and above there at 93.54, with the yen finding support around 92.99 and below
there at 92.80. Studies are showing positive momentum, but are now in overbought
territory so some caution is warranted. The next upside target is 93.54.

EURO (SEP): 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 1.2187. 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 1.2187. 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

6/25/2004

The gold market continues to show signs of
extending the June rally but the trade is noting the obvious divergence between
gold and silver. The trade was a little concerned about the weekly COT report as
the gold long is building toward the 100,000 contract level. We also think that
some buying Friday was specifically done in anticipation of some extreme
violence in Iraq over the weekend.

Technical Outlook

#P-METALS 06/28/04: 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 611.4 and below there at 607.7 with resistance
likely at 615.4 and 618.4. 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 615.4.

GOLD (AUG): Support for gold today comes in near
400.55, while resistance is pegged at 405.35. Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
405.35. It is a mildly bullish indicator that the market closed over the pivot
swing number. The market’s short-term trend is positive on a close above the
9-day moving average.

COPPER MARKET RECAP

6/25/2004

The copper market failed to respond to favorable
overnight Chinese copper price action and then failed to respond to tighter
Chinese and LME stocks. In other words, the rally on the prior session seems to
have been sparked specifically by labor issues. In order to deflate the bull
camp following the recent rally the September copper might have to fall back
below the prior week’s consolidation resistance around 120.50. We are actually
surprised that extremely strong University of Michigan figures didn’t see copper
prices firm but its clear that macro economic activity isn’t directly inspiring
copper price action.

ENERGY MARKET RECAP

6/25/2004

The energy complex deserved to deflate on the
opening as the longs in early ahead of the weekend were hit with a resolution to
the Norway strike. While the Norway strike didn’t add significantly to the
recent gains it was a main component of the bull case in the last four sessions.
However, many traders continue to speculate the violence in Iraq has the
potential to boost prices sharply in the near term. Talk about a Cease-Fire in
the Al-Sadr district of Baghdad could add to the negative bias but only if the
market accepts that agreement as a credible potential.

Technical Outlook

#ENERGIES 06/28/04: CRUDE OIL (AUG): The market’s
close below the 1st swing support number suggests a moderately negative setup
for today. Support for crude is keyed on 37.27 and below there at 36.90, with
resistance pegged at 37.84 and 38.04. The market’s short-term trend is negative
as the close remains below 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 38.04.

UNLEADED GAS (AUG): Positive momentum studies in
the neutral zone will tend to reinforce higher price action. The next upside
target is 122.00. The swing indicator gave a moderately negative reading with
the close below the 1st support number. Resistance today is at 122.00, while
support should be found around 118.10. The market’s close above the 9-day moving
average suggests the short-term trend remains positive.

HEATING OIL (AUG): The market’s close below the
pivot swing number is a mildly negative setup. Heating oil should encounter
support around 100.60, with resistance is at 103.30. 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 103.30.

CORN MARKET RECAP

6/25/2004

After absorbing bearish export news yesterday,
the market found support this morning from news that 300,000 tons of US corn was
sold to unknown destination and news that Taiwan bought 33,000 tons of US corn.
After moving to the lowest level since early February, December corn managed to
close 5 1/2 cents higher on the week. In addition, China officials appear
reluctant to allow significant export activity for the second half of the year.
Uncertainty on the longer-term weather forecast into mid-July has added to the
choppy trend of the past few sessions. A Reuter’s poll of grain analyst came up
with an average trade estimate for Wednesday’s USDA June 1st stocks report at
2.96 billion bushels (range 2.921-3.029) as compared with 2.985 billion last
year. For planted acreage, the survey showed an average trade estimate of 80.31
million acres (range 79.79-81.2) as compared with 79.00 million acres from the
March USDA report and 78.74 million last year. December corn support comes in at
282 1/2 with 288 1/4 and 293 1/2 as resistance.

Technical Outlook

#CORN (DEC) 06/28/04: The daily stochastics gave
a bullish indicator with a crossover up. The near-term upside objective is at
288 1/2. The market’s close above the 2nd swing resistance number is a bullish
indication. Market resistance comes in at 288 1/2 today, with support at 281.
The market’s short-term trend is positive on a close above the 9-day moving
average.

SOY COMPLEX RECAP

6/25/2004

July Soybeans closed 49 higher on the week while
November gained 45 cents. Positioning ahead of first notice day for July
soybeans next week kept the trade choppy and volatile. Talk that the surge in
prices this week caused some producer movement and trigger weakness at the gulf
yesterday has helped trigger the more two-sided trade since early Thursday and
spread liquidation supported the November. Traders are still uncertain on the
outcome of the China purchases from South America which were on hold until the
quality issues were resolved. Now that Brazil companies can ship to Brazil, the
trade is hesitant to make new contracts until the old contracts are resolved.
Cool weather across the Midwest after the long period of excess moisture has
left the appearance of smaller and uneven fields in many areas of the mid-west
and a warmer and drier trend into early July is seen as a scenario which might
help improve conditions. A Reuter’s poll of grain analyst came up with an
average trade estimate for Wednesday’s USDA June 1st stocks report at 399
million bushels (range 362-455) as compared with 602 million last year. For
planted acreage, the survey showed an average trade estimate of 74.96 million
acres (range 74.2-76.0) as compared with 75.4 million acres from the March USDA
report and 73.4 million last year. Support for November soybeans comes in at 709
and 702 with 721 1/4 as next resistance.

Technical Outlook

#SOYBEANS (NOV) 06/28/04: A positive setup
occurred with the close over the 1st swing resistance. The next area of
resistance is around 717 and 723, while 1st support hits today at 702 and below
there at 693. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. The cross over and close above the 40-day
moving average indicates the longer-term trend has turned up. Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The next
upside target is 723. Short-term indicators suggest buying dips today.

MEAL (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 233.0. First resistance comes
in at 230.5, with support at 225.0. The market’s short-term trend is positive on
a close above the 9-day moving average. With the close over the 1st swing
resistance number, the market is in a moderately positive position. Consider
buying pull-backs since daily studies are bullish.

BEAN OIL (DEC): The market’s close above the
9-day moving average suggests the short-term trend remains positive. Positive
momentum studies in the neutral zone will tend to reinforce higher price action.
The next upside target is 25.07. It is a slightly negative indicator that the
close was lower than the pivot swing number. Daily swing resistance is found at
24.85 and above there at 25.07. Support should be encountered at 24.48 and
24.33.

WHEAT MARKET RECAP

6/25/2004

The higher close after moving to the lowest level
since October 28th early in the session is a minor bottoming signal but there
was no weekly confirmation as September closed 11 1/4 cents lower on the week.
Rising open interest suggests that funds are building a larger net short
position. Seasonal harvest selling pressures and negative news on the export
front this week has kept the short-term trend down. Harvest continues to north
into Kansas in the west and into the main production areas in the eastern
cornbelt this week. A Reuter’s poll of grain analyst came up with an average
trade estimate for Wednesday’s USDA June 1st stocks report at 537 million
bushels (range 522-549) as compared with 491 million last year. For planted
acreage, the survey showed an average trade estimate of 13.26 million acres for
spring wheat (range 12.9-13.5) as compared with 13.84 million acres last year.
The market is oversold basis September wheat with support at 346 1/2 and 358 as
next resistance.

Technical Outlook

#WHEAT (DEC) 06/28/04: With the close higher than
the pivot swing number, the market is in a slightly bullish posture. Look for
near-term support at 358 1/2 and below there at 355 1/4, with resistance levels
at 364 1/2 and 367 1/4. 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 355
1/4.

LIVE CATTLE RECAP

6/25/2004

August cattle closed 47 lower on the session and
up 230 on the week. Ideas that the cash market may have topped out this week at
$90.00 helped trigger the early weakness but the market managed to recover some
of the losses as the discount of futures to cash helped support. The trade
expects the cooler than average temperatures across a good portion of the
country to support better than average weekend consumption for grilled beef
cuts. Boxed-beef cut-out values were down 79 cents to $144.53 as compared with
$145.33 last week at this time. Feeder cattle hit contract highs for the 5th
session in a row and helped support.

Technical Outlook

#CATTLE (AUG) 06/28/04: Positive momentum studies
in the neutral zone will tend to reinforce higher price action. The next upside
target is 90.62. It is a slightly negative indicator that the close was lower
than the pivot swing number. Support should be encountered at 88.72 and below
there at 88.12. Market resistance is at 89.97 and then again at 90.62. The
market’s close above the 9-day moving average suggests the short-term trend
remains positive.

LEAN HOGS RECAP

6/25/2004

August hogs pushed lower on the session early
only to hold at the 40-day moving average to close 52 higher on the session and
115 off of the lows. August closed 147 lower on the week. The results of the
USDA quarterly Hogs and Pigs report, released this afternoon at 2:00 pm should
set the tone for early next week. The June 1st inventory came in at 101.0% of
last year versus an average trade estimate of 101.1% (range 99-102%), kept for
breeding was 98% versus an average pre-report estimate of 97.9% (97-98.3) and
kept for marketing was 101% versus an average estimate of 101.5% (range
99.5-103). The 2-day lean index for the period ending June 23rd was 80.84, up 87
cents from the previous session and up from 79.14 one week previous.

Technical Outlook

#HOGS (AUG) 06/28/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Resistance levels
comes in at 75.97 and 76.37 today, while support is around 74.72 and then 73.87.
The upside closing price reversal on the daily chart is somewhat bullish. 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 73.87.

COCOA MARKET RECAP

6/25/2004

The cocoa market continued to trade in a tight
range and would not seem to have a significant fundamental track. The buying
that was present Friday was supposedly short covering and not necessarily fresh
outright buying. The Press suggested that the action was mostly small spec
buying and that could be seen as weak handed buying!

Technical Outlook

COCOA (SEP) 06/28/04 The market has a bullish
tilt coming into today’s trade with the close above the 2nd swing resistance.
Cocoa should run into resistance at 1376 and above there at 1386 with support at
1348 and 1330. The daily stochastics have crossed over up which is a bullish
indication. The next upside target is 1386.00.

COFFEE MARKET RECAP

6/25/2004

September Coffee closed 250 lower on the session
and down 455 on the week as milder than normal weather in Brazil with the
forecast for no cold weather through at least July 7th (Brazil private
forecaster Somar out to July 10th). Continued active harvest of the Brazil
bumper crop along with a lack of commercial buying interest on the break helped
drive the market sharply lower on what was termed light fund selling.

Technical Outlook

COFFEE (SEP) 6/28/04 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. 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. 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 75.45 and above there at 77.85 with support at 72.1 and
71.15. The market’s short-term trend is negative as the close remains below the
9-day moving average.

SUGAR MARKET RECAP

6/25/2004

October sugar closed 1 point higher on the
session and up 38 points on the week as bullish price action for the August
contract in London helped support the recovery from lower trade early on Friday.
The market spent the entire week inside of last Friday’s range and the ability
to hold last weeks lows and close firm on the week hints at an upside break-out
next week with 808 as next upside objective. August futures in London closed at
the highest level since May 6th. The lack of selling interest from producers and
hopes of improving demand into July helped support.

Technical Outlook

#SUGAR (OCT) 06/28/04: It is a mildly bullish
indicator that the market closed over the pivot swing number. Swing resistance
comes in at 7.81, with support found at 7.61. 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 7.81.

COTTON MARKET RECAP

6/25/2004

December cotton experienced a weekly closing
price reversal from a contract low which improves the technical set-up for
cotton going into next week. While the expectations for lower planted acreage
for Wednesday mornings USDA report has provided support this week, weather
conditions have been favorable to see improving crop conditions for Monday
evenings weekly update. Long liquidation into the delivery period for July
cotton seems to be the primary reason for the sharp break and short-covering
supported the market late this week. There were 286 deliveries bringing the
cumulative total to 1027 contracts. Exchange deliverable stocks fell to 196,578
as of June 24th from 220,201 bales the previous day.

Technical Outlook

#COTTON (OCT) 06/28/04: 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. Next resistance area comes in at 54.35 and then again at 54.83,
while support is targeted at 53.55 and 53.23. Daily stochastics are showing
positive momentum from oversold levels which should reinforce a move higher if
near-term resistance is taken out. The next upside target is 54.83.