Will Crude Fall To October Levels?

BOND MARKET RECAP

4/13/2005

June Bonds finished down 0-06 at 112-19, 0-17 off
the high and 0-09 up from the low.

June 10 Yr Treasury Notes finished up 0-005 at
110-075, 0-095 off the high and 0-055 up from the low.

The Treasury market ran to yet another new
high for the move but then recoiled sharply from the highs in the wake of a
disappointing note auction. Certainly the Treasuries were justified in the
initial rise as the US retail sales report was sufficiently disappointing and in
many ways suggested that high oil prices were reducing spending. On the other
hand, the slide in energy prices picked up speed into mid session and that could
also have prompted a number of longs to bank profits off the recent run up in
prices. In short, oil prices around the lows Wednesday were more than $7.00
below the April highs and that has to begin to relieve some of the pressure on
the economy. Before the Treasuries really knuckle under to lower oil prices,
lower oil prices will have to stay down for a longer period of time.

Technical Outlook

BONDS (JUN) 04/14/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The major trend could be
turning up with the close back above the 18-day moving average. The daily
closing price reversal down puts the market on the defensive. The market has a
slightly positive tilt with the close over the swing pivot. The near-term upside
target is at 113-16. The next area of resistance is around 113-02 and 113-16,
while 1st support hits today at 112-09 and below there at 111-29.

TNOTES (JUN) 04/14/2005: The major trend could be
turning up with the close back above the 60-day moving average. Rising
stochastics at overbought levels warrant some caution for bulls. The major trend
could be turning up with the close back above the 18-day moving average. With
the close higher than the pivot swing number, the market is in a slightly
bullish posture. The near-term upside objective is at 110-245. With a reading
over 70, the 9-day RSI is approaching overbought levels. The next area of
resistance is around 110-175 and 110-245, while 1st support hits today at
110-030 and below there at 109-270.

 

STOCK INDICES RECAP

4/13/2005

June S&P finished down 13.9 at 1176.1, 13.4 off
the high and 2.4 up from the low.

June S&P E-Mini closed down 14.5 at 1175.5. This
was 2 up from the low and 15 off the high.

June Dow closed down 107 at 10409. This was 19 up
from the low and 124 off the high.

The stock market was thoroughly disappointed with
the retail sales report, disappointed with initial corporate earnings flow and
apparently unwilling to take the slide in oil prices as a positive. Certainly
the magnitude of the declines in energy prices are soon to provide some support
to equities, but until the declines have been in place long enough to actually
flow to the consumer at the pump the market might not adjust its opinion for
upcoming growth and profitability. Apparently Chip stock were being downgraded
and a number of brokerages seemingly as revising earnings projections down and
that prompted broad based profit taking off the large rally that took place on
Tuesday.

Technical Outlook

S&P 500 (JUN) 04/14/2005: The daily stochastics
gave a bearish indicator with a crossover down. Stochastics trending lower at
midrange will tend to reinforce a move lower especially if support levels are
taken out. The close under the 18-day moving average indicates the longer-term
trend could be turning down. The swing indicator gave a moderately negative
reading with the close below the 1st support number. The next downside objective
is 1162.85. The next area of resistance is around 1183.60 and 1194.45, while 1st
support hits today at 1167.80 and below there at 1162.85.

SP EMINI (JUN) 04/14/2005: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
market back below the 18-day moving average suggests the longer-term trend could
be turning down. The swing indicator gave a moderately negative reading with the
close below the 1st support number. The near-term upside objective is at
1195.75. The next area of resistance is around 1184.00 and 1195.75, while 1st
support hits today at 1167.00 and below there at 1161.75.

NASDAQ (JUN) 04/14/2005: A bearish signal was
triggered on a crossover down in the daily stochastics. Stochastics trending
lower at midrange will tend to reinforce a move lower especially if support
levels are taken out. The major trend has turned down with the cross over back
below the 18-day moving average. The swing indicator gave a moderately negative
reading with the close below the 1st support number. The next downside objective
is 1448.38. The next area of resistance is around 1482.25 and 1499.37, while 1st
support hits today at 1456.75 and below there at 1448.38.

 

CURRENCY MARKET RECAP

4/13/2005

June US Dollar finished unchanged at 8440, 35 off
the high and 24 up from the low.

June Euro finished down 0.13 at 129.33, 0.39 off
the high and 0.64 up from the low.

June Euro Dollar closed up 0.025 at 96.535. This
was 0.015 up from the low and 0.005 off the high.

June Canadian Dollar closed down 0.08 at 80.84.
This was 0.07 up from the low and 0.28 off the high.

June British Pound finished up 0.27 at 188.83,
0.17 off the high and 0.68 up from the low.

June Swiss closed down 0.17 at 83.64. This was
0.51 up from the low and 0.23 off the high.

June Japanese Yen closed up 0.28 at 93.6. This
was 0.25 up from the low and 0.25 off the high.

The Dollar was very fortunate to have avoided
more aggressive selling as the US equity market was down sharply and the US
economic report slate was very disappointing. Perhaps the continued slide in
energy prices took some of the selling incentive away from the Dollar but it was
apparent during the action that the Pound and the Yen were the leadership
markets. Some saber rattling between China and Japan continued and that might
have some residual impact on the whole Dollar/Yuan/Yen revaluation issue. With
the US Fed, BOC and ECB all thought to be on hold with respect to near term rate
hike issues we suspect that the biggest inclination is to keep most currency
within recent trading ranges.

Technical Outlook

YEN (JUN) 04/14/2005: Rising from oversold
levels, daily momentum studies would support higher prices, especially on a
close above resistance. The market back below the 18-day moving average suggests
the longer-term trend could be turning down. The close over the pivot swing is a
somewhat positive setup. The next upside objective is 94.10. The next area of
resistance is around 93.85 and 94.10, while 1st support hits today at 93.35 and
below there at 93.10.

EURO (JUN) 04/14/2005: Positive momentum studies
in the neutral zone will tend to reinforce higher price action. The close below
the 18-day moving average is an indication the longer-term trend has turned
down. The market’s close below the pivot swing number is a mildly negative
setup. The next upside objective is 130.29. The next area of resistance is
around 129.84 and 130.29, while 1st support hits today at 128.82 and below there
at 128.24.

 

PRECIOUS METALS RECAP

4/13/2005

April Gold closed up 1.7 at 429.3. This was 1.8
up from the low and 0.7 off the high.

May Silver finished up 0.07 at 7.225, 0.045 off
the high and 0.155 up from the low.

 

While gold and silver didn’t close that
impressive the fundamental information that was presented to the market early in
the session could easily have pushed prices down but instead the buyers showed
up. In fact, given the recent correlation to equity price action and the need to
see positive economic expectations, it is a little surprising that gold actually
managed to rally, in the face of no movement in the Dollar, a sharply lower
equity market and in the wake of very disappointing retail sales report. In
short, the action in gold and silver was atypical of the recent ebb and flow and
that might suggest a transition ahead.

Technical Outlook

SILVER (MAY) 04/14/2005: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The cross over and close above the 18-day
moving average indicates the longer-term trend has turned up. The upside daily
closing price reversal gives the market a bullish tilt. The close over the pivot
swing is a somewhat positive setup. The near-term upside objective is at 739.8.
The next area of resistance is around 732.5 and 739.8, while 1st support hits
today at 712.5 and below there at 699.8.

GOLD (APR) 04/14/2005: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The major trend could be turning up with the
close back above the 18-day moving average. The close over the pivot swing is a
somewhat positive setup. The near-term upside objective is at 431.5. The next
area of resistance is around 430.5 and 431.5, while 1st support hits today at
428.1 and below there at 426.6.

 

COPPER MARKET RECAP

4/13/2005

May Copper closed down 3.65 at 145.95. This was
1.65 up from the low and 1.15 off the high.

Copper prices seemed to cave in under the same
demand threats as the oil complex. With ultra high oil prices slowing the US
retail sales and in general hindering growth it is not irrational to think that
demand for copper might soften, especially considering that the market is fresh
off a new contract high. Rumors that the Chinese were seeing recent prices as
overly expensive might also have prompted aggressive small spec and fund
liquidation. Given that copper stocks remain tight and demand is expected to
remain high we have to think that the market will be capable of finding support
around the consolidation lows.

 

ENERGY MARKET RECAP

4/13/2005

May Crude Oil closed down 1.64 at 50.22. This was
0.16 up from the low and 0.98 off the high.

May Heating Oil closed down 2.33 at 144.20. This
was 0.70 up from the low and 1.80 off the high.

May Unleaded Gas finished down 4.95 at 148.43,
3.67 off the high and 1.38 up from the low.

May Natural Gas finished down 0.12 at 6.98, 0.16
off the high and 0.01 up from the low.

May Propane closed down 0.02 at 0.83. This was
equal to the low and equal to the high.

The downside carnage continued and the API report
simply added to selling pressure by posting a steep API crude stocks increase
and a moderately large API gasoline stocks build. Offsetting the negative
fundamental tilt in the weekly inventory reports was a decline in the refinery
operating rate, as that could reduce the ability to rebuild US gasoline supplies
in the spring demand lull period. We also suspect that the significant chart
damage on Wednesday has a large number of longs concerned about a capital
washout, which could lead to a decline all the way back to the October 2004 high
of $51.67. At some point the threat of falling demand should be mitigated as
prices have fallen far enough to possibly soften the hit against demand.

Technical Outlook

CRUDE OIL (MAY) 04/14/2005: The market back below
the 60-day moving average suggests the longer-term trend could be turning down.
Momentum studies are declining, but have fallen to oversold levels. The market
back below the 18-day moving average suggests the longer-term trend could be
turning down. The gap down on the day session chart is bearish with more selling
pressure possible today. The defensive setup, with the close under the 2nd swing
support, could cause some early weakness. The next downside objective is now at
49.29. The 9-day RSI under 30 indicates the market is approaching oversold
levels. The next area of resistance is around 50.78 and 51.56, while 1st support
hits today at 49.65 and below there at 49.29.

UNLEADED (MAY) 04/14/2005: The close under the
60-day moving average indicates the longer-term trend could be turning down. The
downside crossover (9 below 18) of the moving averages suggests a developing
short-term downtrend. Daily stochastics declining into oversold territory
suggest the selling may be drying up soon. The close below the 18-day moving
average is an indication the longer-term trend has turned down. The gap lower
price action on the day session chart is a bearish indicator for trend. There
could be some early pressure today given the market’s negative setup with the
close below the 2nd swing support. The next downside objective is now at 143.96.
The next area of resistance is around 150.95 and 154.05, while 1st support hits
today at 145.91 and below there at 143.96.

HEATING OIL (MAY) 04/14/2005: Daily stochastics
are trending lower but have declined into oversold territory. The major trend
has turned down with the cross over back below the 18-day moving average. The
market setup is somewhat negative with the close under the 1st swing support.
The next downside objective is 141.98. The next area of resistance is around
145.44 and 146.97, while 1st support hits today at 142.95 and below there at
141.98.

 

CORN MARKET RECAP

4/13/2005

May Corn finished down 1 at 205 3/4, 1/2
off the high and 2 up from the low. December Corn closed down 3/4 at 230 1/4.
This was 2 up from the low and 1/4 off the high.

The outlook for warmer and somewhat dry weather
into the weekend which could boost corn plantings helped trigger the early
weakness. Slow export demand due to GMO issues added to the bearish tone but
news that US exporters sold 120,000 tonnes of US corn to unknown destination
helped to provide underlying support. Basis levels in the country were firm this
morning as there is still tight holding from producers. Traders believe that
producer selling activity will dwindle further during the planting season. For
the weekly export sales report, released before the opening, traders are looking
for sales near 800,000-1.0 million tonnes as compared with 664,500 tonnes last
week. Support for May corn comes in at 203 3/4 and 201 3/4 with resistance at
208 3/4.

Technical Outlook

CORN (MAY) 04/14/2005: The stochastics indicators
are rising from oversold levels, which is bullish and should support higher
prices. The close below the 18-day moving average is an indication the
longer-term trend has turned down. The market setup is somewhat negative with
the close under the 1st swing support. The next upside target is 207 3/4. The
next area of resistance is around 207 and 207 3/4, while 1st support hits today
at 204 1/2 and below there at 203.

 

SOY COMPLEX RECAP

4/13/2005

May Soybeans finished up 5 3/4 at 623 1/4, 1 3/4
off the high and 12 1/4 up from the low. November Soybeans closed up 1 3/4 at
610. This was 9 up from the low and 1/2 off the high.

May Soymeal closed up 2 at 189.3. This was 3.6 up
from the low and 0.2 off the high.

May Soybean Oil finished down 0.01 at 22.55, 0.1
off the high and 0.24 up from the low.

Ideas that US export activity will decline
sharply in the next 5 to 6 months as demand shifts to South America helped to
trigger the early weakness. A weaker tone for gulf basis was also seen as
bearish. While the trade sentiment is bearish due to record world ending stocks
in the forecast, selling pressures were limited on the market today with talk of
the oversold technical condition helping to support. Open interest in soybeans
is down more than 33,000 contracts from the mid-March peak indicating
significant long liquidation has already occurred. For the NOPA crush report for
release before the opening Thursday, traders are looking for March crush near
135.2-138 million bushels as compared with 131.1 million bushels in February.
Talk that the wet weather in southern Brazil could cause some field losses
helped provide some support. For the weekly export sales report, released before
the opening, traders are looking for soybean sales near 300,000-450,000 tonnes,
meal sales near 50,000-125,000 tonnes and oil sales near 0-5,000 tonnes.
Technical support for May soybeans comes in at the 613-614 level with 624 1/2
and 631 1/2 as next resistance.

Technical Outlook

BEANS (MAY) 04/14/2005: Daily stochastics are
showing positive momentum from oversold levels, which should reinforce a move
higher if near term resistance is taken out. The close below the 18-day moving
average is an indication the longer-term trend has turned down. The outside day
up is somewhat positive. The market setup is supportive for early gains with the
close over the 1st swing resistance. The next upside objective is 634 1/2.
Consider buying pull-backs since daily studies are bullish. The next area of
resistance is around 630 1/4 and 634 1/2, while 1st support hits today at 616
1/4 and below there at 606 3/4.

MEAL (MAY) 04/14/2005: Positive momentum studies
in the neutral zone will tend to reinforce higher price action. The cross over
and close above the 18-day moving average indicates the longer-term trend has
turned up. A positive setup occurred with the close over the 1st swing
resistance. The near-term upside target is at 192.2. The next area of resistance
is around 191.2 and 192.2, while 1st support hits today at 187.4 and below there
at 184.7.

BEANOIL (MAY) 04/14/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
market back below the 18-day moving average suggests the longer-term trend could
be turning down. It is a slightly negative indicator that the close was lower
than the pivot swing number. The next downside target is 22.18. The next area of
resistance is around 22.72 and 22.85, while 1st support hits today at 22.38 and
below there at 22.18.

 

WHEAT MARKET RECAP

4/13/2005

May Wheat finished down 1/2 at 310 1/2, 3 off the high and 1
1/2 up from the low. July Wheat closed down 3/4 at 320 1/2. This was 2 1/4 up
from the low and 1 1/2 off the high.

The early weakness was triggered by continued
talk of poor export demand for US wheat due to ample supplies from other key
exporters and from promising crop conditions for the US winter wheat crop. South
Korea passed on a tender to buy 10,600 tonnes of US wheat overnight indicating
that prices were too high which helped to keep the demand tone weak. French
officials raised their estimate for 2004/2005 ending stocks by 300,000 tonnes to
5 million tonnes due to slow exports outside of the European Union. Developing
drought conditions in Australia into the planting season for the 2005/2006 crop
has traders monitoring the rain chances closely as a lack of rain for the next
few weeks could significantly reduce the planted acreage for the new crop. For
the weekly export sales report, released before the opening, traders are looking
for sales near 300,000-500,000 tonnes as compared with 230,400 tonnes last week.
May wheat resistance comes in at 314 and 320 1/2 with support at 307 1/2.

Technical Outlook

WHEAT (MAY) 04/14/2005: The stochastics
indicators are rising from oversold levels, which is bullish and should support
higher prices. The market back below the 18-day moving average suggests the
longer-term trend could be turning down. The market tilt is slightly negative
with the close under the pivot. The next upside objective is 315 1/4. The next
area of resistance is around 312 3/4 and 315 1/4, while 1st support hits today
at 308 1/4 and below there at 306 1/2.

 

LIVE CATTLE RECAP

4/13/2005

April Live Cattle finished unchanged at 89.02,
0.45 off the high and 0.40 up from the low.

May Feeder Cattle closed down 0.35 at 105.80.
This was 0.10 up from the low and 0.55 off the high.

June cattle closed 40 lower on the session with
choppy trading action as the early bounce to a 7-session peak was met with a
lack of new buying interest. The discount of futures supported the market early
but fears of a gradual increase in feedlot supplies in the weeks ahead helped to
trigger another round of long liquidation selling into the close. Boxed beef
cutout values at mid-session were up 65 cents on the day to $155.10 as compared
with $154.65 a week ago. Slaughter came in at 121,000 head as compared with
trade expectations of 118,000-120,000 head which might be a sign of improving
packer demand.

Technical Outlook

CATTLE (APR) 04/14/2005: The downside crossover
(9 below 18) of the moving averages suggests a developing short-term downtrend.
The daily stochastics gave a bullish indicator with a crossover up. Momentum
studies are trending higher from mid-range, which should support a move higher
if resistance levels are penetrated. The major trend could be turning up with
the close back above the 18-day moving average. It is a mildly bullish indicator
that the market closed over the pivot swing number. The near-term upside
objective is at 89.870. The next area of resistance is around 89.450 and 89.870,
while 1st support hits today at 88.620 and below there at 88.200.

 

LEAN HOGS RECAP

4/13/2005

April Lean Hogs finished up 0.12 at 69.82, 0.12
off the high and 0.12 up from the low.

May Pork Bellies closed down 3.00 at 88.25. This
was equal to the low and 3.20 off the high.

June hogs closed lower in choppy, two-sided trade
as higher cash markets and higher pork cut-out values for the past few days
helped support the early strength but weakness in the belly market and long
liquidation selling helped to pressure futures late. Cash markets were sharply
higher at some locations which came as a surprise with the wet weather of the
past few days thought to be a factor to increase producer sales. The CME 2-day
Lean Hog index for the period ending April 11th came in at 68.42, up.15 on the
day and up from 67.36 last week at this time. Slaughter came in at 395,000 head
vs. estimates between 388,000 and 393,000.

Technical Outlook

HOGS (APR) 04/14/2005: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. The market now above the 18-day moving average suggests the
longer-term trend has turned up. The market has a slightly positive tilt with
the close over the swing pivot. The next upside target is 70.070. The next area
of resistance is around 69.950 and 70.070, while 1st support hits today at
69.720 and below there at 69.600.

 

COCOA MARKET RECAP

4/13/2005

May Cocoa finished unchanged at 1555, 9 off the
high and 10 up from the low.

The cocoa market continued to track within the
recent trading but seemed to show signs of favoring an upside breakout. It seems
that some new political flap is possible at the Ivory Coast as there is
apparently a scheduled meeting between the head of the Ivory Coast army and
rebels regarding the disarmament. In other words, anxiety could begin to provide
some additional support to prices. Also providing some lift to prices were
reports of industry buying which has now been documented twice in the last two
weeks.

Technical Outlook

COCOA (MAY) 04/14/2005: Rising from oversold
levels, daily momentum studies would support higher prices, especially on a
close above resistance. The major trend has turned down with the cross over back
below the 18-day moving average. With the close higher than the pivot swing
number, the market is in a slightly bullish posture. The near-term upside
objective is at 1573. The next area of resistance is around 1564 and 1573, while
1st support hits today at 1546 and below there at 1536.

 

COFFEE MARKET RECAP

4/13/2005

May Coffee closed down 0.25 at 114.60. This was
0.90 up from the low and 1.10 off the high.

The market closed slightly lower in quiet trade
with a tight range. Commercial traders were noticeable absent from both side of
the market in the past few days and the market seems to be consolidating near
the 117-119 level basis July. Technical indicators have moved to oversold
readings but there is still a lack of trade house buying on breaks as importers
seem to be waiting for further weakness before extending coverage. CSCE exchange
stocks were up 4,477 bags to 4.516 million bags with 54,152 bags pending review.

Technical Outlook

COFFEE (MAY) 04/14/2005: Momentum studies are
declining, but have fallen to oversold levels. The close under the 18-day moving
average indicates the longer-term trend could be turning down. With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
The next downside target is now at 112.70. The next area of resistance is around
115.60 and 116.65, while 1st support hits today at 113.65 and below there at
112.70.

 

SUGAR MARKET RECAP

4/13/2005

May Sugar closed down 0.11 at 8.34. This was
equal to the low and 0.14 off the high.

May sugar closed lower and to the lowest level
since August 30th which leaves the market vulnerable to liquidation of long held
long positions from speculators. A lack of follow-through buying after the
appearance of a hook reversal low this week helped turn the tone bearish late in
the session. Early strength in London futures helped support a positive tone in
the morning but August futures in London closed lower and to the lowest level
since July 13th.

Technical Outlook

SUGAR (MAY) 04/14/2005: A crossover down in the
daily stochastics is a bearish signal. Daily stochastics declining into oversold
territory suggest the selling may be drying up soon. The market back below the
18-day moving average suggests the longer-term trend could be turning down. The
close below the 1st swing support could weigh on the market. The next downside
target is now at 8.24. The next area of resistance is around 8.41 and 8.51,
while 1st support hits today at 8.27 and below there at 8.24.

 

COTTON MARKET RECAP

4/13/2005

May Cotton finished down 1.78 at 51.22, 1.38 off
the high and 0.32 up from the low.

The cotton market pushed sharply lower on the
session with active long liquidation selling from speculators. Selling increased
significantly after the gap lower opening as sell-stops were triggered. Weakness
in crude oil and other commodity markets helped to pressure the market. For the
weekly export sales report, released before the opening, traders are looking for
sales near 150,000-200,000 bales as compared with 213,500 bales last week.

Technical Outlook

COTTON (MAY) 04/14/2005: The market back below
the 40-day moving average suggests the longer-term trend could be turning down.
The daily stochastics gave a bearish indicator with a crossover down.
Stochastics trending lower at midrange will tend to reinforce a move lower
especially if support levels are taken out. The market back below the 18-day
moving average suggests the longer-term trend could be turning down. The gap
lower price action on the day session chart is a bearish indicator for trend.
There could be some early pressure today given the market’s negative setup with
the close below the 2nd swing support. The next downside objective is 49.79. The
next area of resistance is around 52.07 and 53.18, while 1st support hits today
at 50.37 and below there at 49.79.