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Bi-Weekly Investment Outlook
December 16th 2001
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Observation. Experience, memory and mathematics--These are what a successful trader must depend on. A man can have great mathematical ability and unusual power of accurate observation and yet fail in speculation unless he also Possesses the experience and memory. -Reminiscences of a Stock operator-
Bi-Weekly Investment Outlook
Saturday December 15th, 2001
8:00 AM
Financial Markets
On the Frenzied Forex Front
Japanese Yen
Early Friday overseas currency players sold yen as some of Japan's big retail and banking corporations share prices sank early amid credit risk concerns..
Supermarket chain Daiei lost 24% in the first half-hour of trading on the Tokyo Stock Exchange.. while the Topix banking subsector slumped 3% to a new 18-year low.
The falls amplified pessimism toward the Japanese economy.
In addition a weak Yen policy by Japan is becoming more apparent..
With massive bad loan write offs looming overhead as we approach the Japanese year end in March pressure on the Yen should continue, but that does not preclude one from establishing well placed buy orders and giving it a go from the long side on oversold conditions especially in the later part of February.
March Yen
Support should appear near 7665 to 7830 and the 7777 to 7763 region...A close under is negative and augurs for a test of
7689 to 7675. Below that buyers should appear near 7601 to 7687 and the 7513 to 7487 region ..Traders can buy at 7515 for a turn higher and risk a close under 7412 for three days in a row..Under that support should appear near 7342 to 7325..
Resistance should appear near 7939 to 7954, a close over augurs for a test of 8029 to 8044 . Traders can sell at 8028 and risk a close over 8134 for three days in a row.. .Beyond that 8195 to 8225 should cap a rally for a bit.
Aggressive Traders should go short if a close under 7829 occurs.
Euro FX
While still a bit lower on the year, Europe's new currency made its public debut Friday. Euro starter kits went on the streets in three countries and citizens got their first chance to 'toss' the coins before they become legal tender on New Year's Day. After months of publicity about euro's launch, Friday marked the first time that citizens could actually handle the money which will soon link cities from Portugal to Finland and Germany.
The kits, which contain all eight denominations of euro coins -including the highest, a 2-euro coin - were being sold in France and Ireland, and given away in the
Netherlands. In France, there were immediate concerns that the 50 million kits distributed around the country would not meet demand. The starter kits are being distributed two weeks ahead of the euro's official launch to help people acquaint themselves with the new currency. The euro will become the legal tender for some 300 million Europeans in 12 of the European Union's 15 nations.
March EC
Support is at 8964 to 8934 and 8901. Traders can buy at 8965 and hold for higher prices.. Under that buyers should appear near 8871 to 8856 and 8818... Failure there augurs for an eventual test of 8777 to 8762 . Traders can buy at 8818 for a bounce, risk a close under 8762 for three days in a row.. .
Resistance is at 9044 to 9060. A close over is friendly and augurs for a test of 9140 to 9156..Beyond that a tap of 9234 is likely . Above that a test of 9317 to 9347 and the 9429 to 9445 region is likely.
Aggressive traders should go long if a close over 9060 occurs..Stay tuned for Updates…
Swiss Franc
March Swiss Franc
Sitting at approx the same levels as year end '00' the Swiss looks interesting at these levels and may get some encouraging technical buying if can manage to close higher on the year...Something only a few markets we follow may do. Read on for the rest..
Resistance should appear near 6165 to 6190. Beyond that a trade towards the 6257 to 6270 region is likely is likely to occur. A close over 6270 augurs for a test of 6337 to 6350 and beyond towards the 6417 to 6430 region.. Beyond that sellers should appear near the 6483 to 6509 region.. Traders can sell at 6482 and risk a close over 6509 for three days in a row.. Above that resistance is at 6577 to 6591..
Support should appear near 6113 to 6101 then 6068 and the 6035 to 6023 region. Traders can buy at 6113 for a turn higher and risk a close under 6068 for three days in a row. Below that buyers should appear near 5957 to 5945.. Under that support should appear near 5880 to 5855.. Traders can buy at 5882 and risk a close under 5849 for three days in a row.
Aggressive Traders should go long if a close over 6192 occurs..
British Pound
March British Pound
Support should appear near 1.4372, traders can buy at 1.4372 for a bounce , risk a close under 1.4336 for three days in a row. Below that support should appear near the 1.4210 to 1.4150 region and should contain a decline .. a close under 1.4150 is negative and augurs for a test of 1.3990 and eventually the 1.3830 to 1.3770 region..
Resistance is at 1.4530 to 1.4590.. Beyond that a trade towards the 1.4840 to 1.496 region is likely.. a close over 1.4960 is friendly and augurs for an eventual test of 1.5290 to 1.5350.. Traders can sell at 1.5280 and risk a close over 1.5520 for three days in a row..
Traders should go long if a close over 1.4590 occurs..
Canadian Dollar
The close Friday was the best for the canuck in two months, bolstered by technical momentum and cross-buying of Canadian dollars against as the yen.
An abandonment of long US dollar positions was also responsible for the strength.
In addition. Commodity prices were up, which is helpful for currencies such as the Canadian dollar and Swiss Franc. Will the strength continue ? That is for the mkt to tell us.. but this writer feels the Canadian Dollar has been unjustly punished during the heyday of the dollar and a return to higher levels of the past should not be ruled out.
When I began trading currencies in late 1979 to 1980 the C$ was around 9000.
Yen near 4000, Sterling sat around the 2.50 level while the Swiss was trading in the same general area.
March Canadian Dollar
Support should appear at 6350 to 6337 and 6270 to 6256... Traders can buy at 6357 and risk a close under 6305 for three days in a row, Below that buyers should appear near the 6225 to 6190 region.
Resistance is at 6417 to 6430, a close over is friendly and augurs for a test of the 6483 to 6509 region.... Beyond that sellers should appear near 6577 to 6591 Traders can sell at 6576 for a turn lower and hold for lower prices. Above that resistance is at 6659 to 6671 should cap a rally for a bit..
Australian Dollar
Central bank intervention under 50 cents turned away spec selling (mostly funds) during the early part of the year . Current Differentials of economic performance and interest rates are now in Australia's favor. In addition business dealings such as merger and acquisition activities are also supportive for the Australian dollar.
Some may even view the Aussie as I do a decent safe haven play going forward.
Last year the aussie rose nicely from late November into mid January..
Presently there are few signs of break-out for the Aussie as Friday's close was a lackluster up five.. buy dips ...
March Aussie Dollar
Support is at 5139 to 5127 .. Traders can buy at 5139 and risk a close under 5125 for three days in a row. Below that buyers should appear near 5067 to 5036 and the 4995 to 4973 region .. Under that 4926 to 4915 should contain a decline for a bit..
Resistance should appear near 5176, an extended trade over is friendly and augurs for a test of 5200 to 5211 and eventually the
5250 to 5282 region..Beyond that a test of the 5345 to 5355 region is likely .. Above that that sellers should appear near 5418 to 5430...
Traders should go long if a close over 5176 occurs
Stay tuned for Forex Updates
The Sensational Bond and Stock Markets
March 10 Year T-Note
Treasury instrument futures took another fall Friday, by hedging activity ahead of nongovernmental bond issuance and by diminishing hopes of additional Federal Reserve rate cuts. Bond Fund management companies are actively seeking higher-yielding corporate bonds, mortgage-backed securities and emerging market debt as well as junk. In addition to the loss of confidence that the Federal Reserve will continue cutting rates. What a pickle the bond market is now in.. To think just recently as late October bond futures were lavishing in all the glory and fame of a solid bull mkt. On October 31st the Treasury Dept announced it would no longer issue 30 yr bonds , something that had been mulled over and talked about for some time .. Upon hearing that traders contracted got the age old disease ' need for greed' as dollar signs of a huge move higher raced through their heads.. scaring the pants off the shorts .. your truly included The resounding move lower in longer term bonds is quite what
the Treasury and Fed expected nor desired !
Abstractly looking thru all the noise I tend to think entities who desire long term instruments may not be buyers of US bonds as aggressively .. just for the simple reason of ten years is too short for some.
March 10 Year T-Note
Resistance should appear near 104-07 and 104-23, an extended trade over is friendly and augurs for a test of 105-12 to 105-17..
Beyond that sellers should appear near 106-07 to 106-12...
Support is at 103-23 and 103-07...a close under 103-07 is negative and augurs for a test of the 102-22 to 102-17 region...
Under that a test of 101-23 region is likely.
Daily Dow Jones Industrial Average
The labor or Department said its closely watched Consumer Price Index showed no change last month after falling 0.3 percent
in October as America's first recession in a decade continued to hold down inflation. Also, the Federal Reserve said output at the country's factories, mines and utilities was down 0.3 percent last month, the 13th decline in the past 14 months.
The market fell this past week amid a spate of layoffs from such companies as American Express and Aetna and profit warnings from Ciena, Lucent Technologies, Merck and Bristol-Myers Squibb. The Grocers were even slapped earlier in the week..
The creeping negative news gave investors chills and fueled ideas that economic weakness will carry over into 2002, pushing back the rebound they have been anxiously awaiting for... After crossing the 10,000 milestone last week for the first time since before the Sept. 11 terror attacks many on wallstreet had declared a new bull mkt was upon us .However Dow did not had a close above 10,000 this past week and in fact at it's lows on Thursday and Friday had fallen some 400 pts from the recent highs.. After Having suffered triple-digit selloffs Monday and Thursday the Dow settled higher on Friday, but ending the week down 2.4 percent. The Nasdaq had a weekly loss of 3.4 percent; the S&P 500, 3.0 percent. No surprise to our readers...
On the positive side Companies that gained the most were those that offered positive prospects. McDonald's, which reaffirmed fourth-quarter earnings estimates, rose $1.16 to $26.80...MacDonald's has good posture and overseas business should help offset any US slowdown. Circuit City rose nearly 10 percent, up $2.16 at $24.16, following an upgrade by Banc of America that I would not hang my hat on ! Once the season passes expect doldrums for many retailers.
Traders dumped well known stocks of companies that posted disappointing earnings and / or indicated that business remains difficult. Enron remains a problem after the fall... the 65 billion is gone... And has most likely NOT worked itself out. completely ... Expect negative news down the road. Oracle fell 10 cents to $14.57 on news that sales of new software licenses plunged 27 percent during the quarter ending Nov. 30. and that profits slid 12 percent as sales of its business software shrunk. Gannett fell 75 cents to $65.20 after the country's largest newspaper publisher said it was canceling next year's raises for about 80 of its top executives, following the lead of other major publishers struggling with a difficult business climate for newspapers.
One cannot be certain if easy monetary and growth orientated fiscal policy will really have any real effect until unemployment reaches the 6.5 to 7.5 % level..
Where as at that point hopefully NEW consumption increases fueled by returning workers should sustained an earnings recovery and a higher stock mkt. for the textbook rule of low inflation and easy money has done very little so far and expectations may be a bit premature...
Dow Jones Industrial Average
Resistance should appear near 9821 to 9837 then 9888 and the 9921 to 9937 region. An extended period over 9937 is friendly and augurs for another test of 10,0021 to 10,037. Beyond that Sellers should appear near 101,04 to 101,36 and the 10,320 to 10,360 region .. Which should Cap a rally for a bit..
Support remains near 9737 to 9706.. Below that buyers should appear near 9641 to 9625 and contain a sell off. A slip under augurs for a test of 9542 to 9526 and the 9445 to 9429 region. Under that a test of 9347 to 9316 is likely..
Weekly SP500 Futures
March SP500
Resistance is at 1130 to 1136 then 1150 and the 1164 to 1169 region .. Traders can sell at 1163.90 for a turn lower, risk a close over 1169 for three days in a row.. Beyond that a test of 1180.50 and the 1192 to 1203 region is likely. A close over 1203 is friendly and augurs for a test of 1217.5 and the 1232 to 1238 region..
Support should appear near 1122.70 and 1115.5, a close under 1115.50 is negative and augurs for an eventual test of the 1101 to 1096 region. Below that support is at 1082 under that buyers should appear near the 1068 to 1063 region and 1058
Traders should go short if a close under 1115.50 occurs
Stay Tuned for BW Updates .
Weekly Nasdaq Composite
Nasdaq Composite
Resistance is at the 1982 to 1996 region. Beyond that a test of 2034 to 2042 is likely.. A close over 2034 is friendly and indicates a trade towards the 2080 to 2088 region..Beyond that Sellers should appear near 2126 to 2134 and Cap a rally for a bit.
Support is at 1953 to 1946 , failure there augur for a test of 1909 to 1902 and 1883.. Under that buyers should appear near the 1865 to 1858 region.. A close under is negative and indicates a test of 1822 to 1808 then 1780 to 1774 and the 1738 to 1731 region.
Weekly Mini- Nasdaq 100
March Mini- Nasdaq 100
Resistance is at the 1642 to 1655 region, a close over 1655 is friendly and augurs for a test of 1689 to 1696 and the 1731 to 1738 region. Beyond that sellers should appear near the 1775 to 1780 region and Cap a rally..
Support is at 1615 to 1609, an extended trade under 1609 is negative and augurs for a test of 1576 to 1569 and the 1535 to 1529 region.. Below that support should appear near 1496 to 1484.. Below that buyers should appear near 1459 to 1453 and should contain a decline.
Precious Metals
"The possession of GOLD has ruined fewer men than the lack of it". -----Thomas Bailey Aldridge"
Precious metals settled mostly higher Friday, with dollar weakness against some key foreign currencies prompting funds to cover short positions in gold futures. The yellow metal is another one of the few markets that is currently sitting just above '00' year end levels.. prompting this FuturesCom Special Report On Gold
Monthly Gold
It’s been 21 years since Gold had it’s heyday. GOLD BUGS are 'dead and buried.' The Swiss Banks that insisted upon buying some GOLD for all of their Managed Accounts, have now liquidated their positions and are probably short. Whatever happened to the "Gnomes of Zurich?" In the past 21 years, GOLD has mostly been in a Bear Market. There have been a few rallies from time to time. The last Bullish Gold market with any real length occurred in 1993. If you're timing was perfect, you bought Gold under the $340 level and was able to Sell five months later above the $400 level. While the Bullion was rising over $60 in 1993, many Gold stocks rose well over 100%. During 1994 & 1995, GOLD traded in a very narrow range of about $370 on the downside and $400 on the upside. Many traders kept saying that once GOLD broke above $400, it would FLY. Well, in early 1996, Gold finally closed above $400 and a multitude of small Speculators came out of the woodwork and bought the Yellow Metal.. WRONG AGAIN! If the Crowd was Right, everybody would be a Billionaire. The Evening Gold hit $ 419 an ounce Futurescom subscribers were advised to being selling instead of sleeping. By February of 1996, Gold was once again on its way DOWN. This past year the Crowd has abandoned Gold. The Swiss Banks are no longer buying for their subscribers. The GOLD BUGS are in hiding. Central banks are Selling. The Producers have been Selling Forward their 2002 and even some of their 2003 supplies and beyond. In other words, the World has forgotten the Metals that Glitters. The WORLD is Bearish on Gold BUT it remains just at or near year ago levels .. Is there any reason to Buy GOLD NOW? There sure is. The fact that Bulls in Gold are as scarce as a Snowball in July in Miami, is about the best reason I can give you. But, eventually, VALUE goes to VALUE and the Supply/Demand Fundamentals have been getting more & more Bullish for the past 10 years. Demand keeps picking-up, especially from the Far East and India.
Each year, the rapidly multiplying Chinese, Koreans, Malaysians, Indians, et al are accumulating more Money and conversely, More GOLD. Unless these Pacific Rim countries decide to stop cohabiting, Demand will continue to expand. Eventually, the Demand will overwhelm the Supplies and prices will have to work much Higher. If not for the central Bank selling of Gold in the last 8 years, I suspect that Gold would already be selling above the $400 level. The more selling at these low levels, the more dramatic the Rally once Gold and SILVER decide to make their upside Push that I strongly believe, may start sometime in the next few months. ..... Now everybody knows that INFLATION is Dead, what about when everybody knows something?
In my opinion a bit of Stagflation in the U.S may be just around the corner. In case many of you had forgotten , Stagflation was the culprit during 1974 to 1976, that nasty mix of rising prices (inflation)) and a recession or stagnant economy..
A phenomenon where BOTH Prices and Unemployment rose
If the depressionary price spiral cannot be offset by rising demand caused by growth / consumption and while productivity gains are still present .. Commercial interests may begin by 'covering their own asses' so to speak by cutting production to increase prices and attain profits for their shareholders that way.
So prices may rise and create cost push inflation as a result from knee-jerk lowered production, War, pestilence or disease (swine flu, mad cow.. Hoof and Mouth ) and famine rather than the great evil of Demand Pull Inflation that Greenspan fought during the late 1990's..
What a pickle we would have then...
Copper production cuts..; Oil Production Cuts ... Hell , maybe with coffee prices so cheap.. producers will take coffee of the table so to speak or farmers won't pick the beans cause it's not worth it.. perhaps consolidation of the steel industry.. and so on and so on...Toss in a bit 'o war' a crop disaster or two.. governments who want to see their only source for income increase in price..
and over time prices rise on their own. Throw in a recession simultaneously you get Stagflation..
When this occurs it is difficult to know which monetary policy and fiscal to apply more uncertainty , lower stock markets ect ect ...Everyone running around like chickens with their heads cut off trying to find a cure..
Leaving HARD ASSETS looking relatively attractive...
Back to Gold...
I still see economic expansion in certain 3rd World countries. I see trouble brewing in South Africa and the intentions of Russia to benefit from higher metal prices the two countries that produce just about ALL of the GOLD in the World.
(Platinum already began a long term move higher a couple years back)
Toss in the 'New War' on terrorism that may in fact last for quite some time and stretch across vast regions of the world, who knows what will happen...for example ...,Even though North Korea is signing off on some anti terrorism accords current relations have been described by some as explosive ...
On Dec. 9 - it warned the United States against making it a target of its war on terrorism, saying Pyongyang is fully prepared for any U.S. attack and would "mete out unimaginably telling blows to the aggressors. " "The U.S. still describes the DPRK (Democratic People's Republic of Korea, or North Korea) as a 'sponsor of terrorism' for no reason in a bid to provoke a war on the Korean Peninsula as they did in Afghanistan on the pretense of combating 'terrorism,"' the official daily Rodong Sinmun said in an editorial monitored in Tokyo. "The U.S. designation of the DPRK as the target of the post-Afghanistan war operation compels the Korean people to be in full combat preparedness to lay down their lives for the country," it said. The U.S. has taken Pyongyang to task for its nuclear program and its missile development and exports. "If the U.S. imperialists opt for a war on the pretense of 'combating terrorism,' all the means of defense and attack in the DPRK will mete out unimaginably telling blows to the aggressors and teach them what will be the end of the kingpin of terrorism," the Rodong Sinmun editorial said.
"The DPRK is not Afghanistan. The DPRK is ready for defense and attack. The DPRK'S striking power and the sphere of its strike do not know the limits," said the mouthpiece of the ruling Workers' Party of Korea.
North Korea is believed to have developed missiles capable of delivering a nuclear warhead. In August 1998, Pyongyang stunned the world by test-firing a three-stage Taepodong-1 missile over Japan into the Pacific Ocean. It is currently working on a longer-range missile known as the Taepodong-2, which analysts say will be capable of traveling more than 4,000 kilometers and hitting Alaska and Hawaii with a nuclear, chemical and biological warhead
And just today, out of SEOUL( courtesy of AP)-- North Korea rejected U.S. demands for an inspection of its alleged nuclear weapons program and refused to participate in talks on its missile development. "There is neither condition nor need for the Democratic People's Republic of (North) Korea to accept the 'nuclear inspection,"' said Rodong Sinmun, the official newspaper of the North's ruling Workers' Party. "The same is the case with the 'missile issue,"' it added. North Korea has increased anti-U.S. rhetoric since U.S. President George W. Bush warned this month that it and Iraq would be "held accountable" if they developed weapons of mass destruction to carry out terrorism. "The U.S. is going to use the dialogue with the DPRK as a lever to pressure
and an opportunity to find a pretext for military provocation," said Rodong. The report was carried by the North's official news agency, KCNA, which was monitored in Seoul. The North has accused the United States of preparing to make it the next
target after Afghanistan in the U.S.-led anti-terrorism campaign. North Korea is on a U.S. list of countries sponsoring terrorism. It maintains a 1.1 million- military, the world's fifth largest. The U.S. keeps 37,000 troops in South Korea to deter North Korea, a legacy of the 1950-53 Korean War. Technically that war ended in a cease-fire, not a peace treaty.
As far as Currency or Gold goes who needs it just buy Stocks... right....
Over the last couple years many stock bulls and CEO's forgot what real money is and began treating stock as a 'currency'.. We all know the result.. they ended up blowing their 'investment brains out' ...
Best of all, my friends and Associates say I am crazy to predict a Bull market in GOLD. They also said I was 'Nuts' to predict a Bull Market in Coffee in October of 1997,I am glad they did...
Most Economists are happy to stick with the Crowd and be Wrong than take a chance and be Right. They rationalize that it is better to be wrong and not stick your neck out than take a chance of being Right. The World created economists to take the heat off the weatherman...After- all, if you are wrong with the Crowd, you can always say----But so & so was also Wrong.
2002 could be another so so year for Stocks, in my opinion. If we see a sharp decline in the Stock Market in 2002, I wonder how the billion dollar ‘funds ‘will react this time ?
I hold the view that one should have at least some Precious Metals representation in their Portfolio. Now I am Not saying that one should sell the Farm and buy gold or silver and platinum. But I predict that Gold may rise at least $30/40 in 2002 and might even trade above the $350 level in my opinion.
SILVER, even though industrial demand has diminished may trade near the $ 475 and has a chance to rise above the $5.00 level, in my estimation. Especially if 'ole' Warren Buffet decides lease rates on his silver are too cheap and decides not to lease an ounce...
PLATINUM HAS BEEN the best performer in the Precious Metals arena in the last few years. We might see another rise to at least $600 next year..
Finally Taking a look at the recent Commitment of Traders Report In gold as of December 11th.
large speculators( mainly Funds) held 25,806 long positions and 47,523 short positions in Comex gold, giving them a net short position of 21,717 contracts, compared with 10,029 net shorts the week before. the largest net short exposure for Funds in gold since May, Small specs are long 24,801 and short 16,710 .. Net long ...BUT it showed them adding 3,515 to the shorts while reducing the longs 959. Commercials essentially took the other side of the trade so to speak.. Adding 11,518 to their longs and reducing their shorts by 4,652....
Since very few traders and investors are thinking about investing in GOLD, I am more sure than ever that I may be right. SANTAYANA once said that "Those who forget History are doomed to repeat it." I agree
Buying Options on futures is a limited risk strategy and can be purchased. If you want real action------
You can Buy Gold, Silver or Platinum Futures, but Futures are not for everyone,
only for those who have ice water in their veins.
February Gold
Support should appear near 277.5 to 275.8.. Traders can buy at 275. 9 and hold for higher prices.. Under that buyers should appear near 272.4 to 271.6.. Below that support should appear near 267.2 to 266.3 and the 262 to 261.2 region ..
Resistance is at 282 to 282.8 , a close over is friendly and augurs for a test of 287.4 to 288.3 and beyond towards the 292.8 to 293.7 region..
Traders should go long if a close over 279.8 occurs.
Weekly Copper
March Copper
time is needed as the production cuts work their way down through the system.
.for now Support should appear near 6755 to 6740 and the 6670 to 6655 region.. Traders can buy at 6675 and risk a close under 6570 for three days in a row.. Below that support is at 6210 to 6485 and the 6430 to 6415 region.. Below that 6355 to 6330 should hold.
Nearby Resistance should appear near 6810 to 6835, a close over is friendly and augurs for a test of 6910 to 6925 and eventually the 6990 to 7005 region.. Beyond that sellers should appear near 7075 to 7090 and the 7140 to 7170 region...
Monthly Silver
March Silver
Support should appear near 431.5 to 430.5 and the 425 to 423.5 region..
Traders can buy at 425.5 and hold for higher prices.. Under that support should appear near 418.5 to 416.5 region.. which should contain a decline for a bit... Below that buyers should appear near 412.0 to 411.0
Resistance is at 437 to 438, a close over 438 is friendly and augurs for an eventual test of the 4442.5 to 444.5 and the 450 to 451.5 region. Beyond that a test of 457 to 458.5 is likely.
Aggressive Traders should go long if a close over 438.5 occurs.
Stay tuned for Updates..
The Exciting Energies
Weekly Crude Oil
February Crude Oil
Support should appear near 1909 to 1902 and 1822 to 1808 . Below that buyers should appear near 1738 to 1731 and 1696 to 1689 .
Resistance is at 1953, a close over is friendly and augurs for a test of 1982 to 1996 and the 2034 to 2056 region.. Beyond that sellers should appear near 2126 to 2134 and 2219 to 2226..
Weekly Unleaded Gas
February Unleaded Gas
Support should appear near 5580 to 5555 and 5505 to 5490.. Below that buyers should appear near the 5355 to 5345 region. Below that support is at 5210 to 5200..Which should contain a decline for a bit.. Under that a test of 5065 to 5035 then 4995 to 4975 and region is likely is likely..
Resistance is at the 5550 to 5580 .. . Above that Sellers should appear near 5715 to 5730 and the 5855 to 5880 region . Beyond that a test of 6025 to 6035 is likely..
Stay tuned for Updates.
Weekly Heating Oil
February Heating Oil
Resistance is at the 5550 to 5575 region Beyond that resistance should appear near the 5715 to 5730.. Above that a test of 5855 to 5880 is likely. a close over is friendly and augurs for an eventual test of 6100 to 6115..
Support should appear near 5430 to 5415 and the 5355 to 5345 region , under that support should appear near 5210 to 5200 and the 5065 to 5035 region
Pick Your Poison ..Trade Accordingly and stay tuned for updates.
The Lively Livestock Markets
Daily Feb Live Cattle
Most cattle futures closed a tad higher, with spot-month Dec the only exception as current soft cash values continue to plague the front end.. In the news
the Japan govt is going to incinerate 12,600 tons of beef.
Farm minister Tsutomu Takebe said Friday the government will incinerate about 12,600 tons of beef from cows butchered before nationwide cattle testing for mad cow disease was begun Oct. 18 following the discovery of the first cow infected with the disease in Japan on Sept. 22.
February Live Cattle
Support should appear near 6757 to 6742. and 6672 to 6657..Traders can buy at 6672 for a bounce , risk a close under 6657 for three days in a row.. Below that support should appear near 6592 to 6577.. .. Failure there augurs for a test of the 6512 to 6487 region, which should contain a decline.
Resistance is at 6807 to 6837 and the 6907 to 6922 region.Beyond that resistance should appear near 6992 to 7002 and the 7072 to 7087 region.. Traders can sell at 6987 for a turn lower and risk a close over 7092 for three days in a row.
Trade Accordingly and stay tuned for Updates..
Daily Feb Lean Hogs
Hog trading ended the week with a scattered speculative buying.
A steady to firm cash market and growing optimism about that product demand may do well early next week. However hog carcass weights, along with larger-than-expected hog slaughter this fall have kept a lid on domestic pork prices.
I expect a bit of Demand to spur prices and nip the shorts in the in the butt so to speak..and once more I will tend to think the commercial interests will attempt to keep production in line and avoid a disastrous lengthy decline in hog prices and see no reason to press the short side for anything other than short term trading purposes.
Spain has detected outbreaks of Swine Flu in some outlying regions , but it is not considered a problem and should be contained..
February Lean Hogs
Support is at 5287 to 5257. Below that support should appear near the 5212 to 5197 region... Traders can buy at 5217 and risk a close under 5122 for three days in a row. Below that buyers should emerge near the 5067 to 5032 region. Under that support should appear near 4927 to 4912 and the 4717 to 4692 level.. Traders who have ice water running thru their veins can buy at 4717 and hold for higher prices..
Resistance is at 5342 to 5357, a close over is friendly and augurs for a test of 5417 to 5432 and beyond towards the 5492 to 5507 region.. Above that sellers should appear near 5552 to 5577.. Beyond that a test of 5637 to 5657 is likely.. A close over augurs for a test of 5792 to 5807 and beyond towards the 5942 to 5957 region..
Traders should go long if a close over 5357 occurs. .
Stay tuned for Updates and new trades in the Hogs..
.
Weekly Pork Bellies Daily Feb Pork Belly
February Pork Bellies
Pork bellies, another of the few markets that is poised to maintain a higher on the year posture, if they hold...Got a boost from Tuesdays' bullish weekly CME storage data report. Which showed just 227,000 pounds of net-in movement into out-of-town warehouses. Traders had expected over 1 mln lbs .. Bellies bellies , were are the bellies ?
Support should appear near 7602 to 7587... Traders can buy at 7607 for a bounce and hold for higher prices.. Under that Buyers should appear near 7512 to 7487 and the 7427 to 7432 region.. Traders can buy at 7432 for a bounce and risk a close under 7327 for three days in a row.
Resistance is at 7672 to 7687 , a close over is friendly and augurs for a test of 7762 to 7777 and beyond towards the 7937 to 7957 region .. Beyond that sellers should appear near 8027 to 8042 and the 8117 to 8132 region.. Above that resistance is at 8192 to 8227 beyond that 8300 to 8317 should Cap a rally.. Aggressive Traders can sell at 8192 for a turn lower and risk a close over 8317 for three days in a row.
Stay tuned for Livestock and Belly Updates and Flashes
The ‘Grand’ Grain Markets
Daily March Soybeans
With continued large world supply from Brazil and the US exports remain a key factor. However even with increases projected over the next ten years by the US and Brazil, demand going forward into this decade suggests that world demand will eventually outpace production. A Strong U.S. soybean export pace thus far into the 2001-02 marketing year has fueled ideas that perhaps the U.S. Department of Agriculture still has some upward revisions to make in the already record large 1-billion-bushel export projection for the year. Russia's sunflower crop has been depleted, which could result in the need to import soybeans as a replacement. In 2001-02, USDA expects Russia to produce only 2.6 million tonnes of sunflowers, down from 3.915 million in 2000, and some private forecasts call for an even lower output. In 1999-2000, the country produced a total of 4.15 million tonnes of sunflowers. European demand for U.S. soybeans has been so strong thus far into the marketing year that it was noted as the
main reason why USDA raised the U.S. export projection by 20 million bushels to
1 billion in its December supply/demand report. Europe is forecast to import 18.558 million tonnes of soybeans in 2001-02, up from 17.791 million in 2000 and up from 14.50 million just two years ago. U.S. soybean exports to Europe thus far have exceeded 3 million tonnes, moving in line with the previous year's pace for the period. USDA said Europe's Soymeal demand has been increasing due to its ban on meat and bone meal, but has shown preference for importing soybeans and crush them domestically due to currently high crush margins.
March Soybeans
Resistance is at 442 1/2 to 444 3/4 a close over is friendly and augurs for a test of 457 1/4 to 458 1/2 and the 463 3/4 to 465 region ..Beyond that a trade towards the 469 1/2 to 471 1/2 region is likely.
Support should appear near 438 1/4 to 437 and 431 1/2 to 430 1/2 Below that buyers should appear near 425 to 423 1/2 and should contain a decline... Traders can buy at 432 and risk a close under 423 for three days in a row.. Under that buyers should and the 412 to 411 region .. Below that 399 1/2 to 398 should hold.
Traders go long if a close over 444 3/4 occurs..
Daily March Soybean Meal
March Soybean Meal
Support should appear near the 145.9 to 145.3, below that 142.1 to 141.5 should contain a decline..
Resistance is at 148.4 to 149.6, a close over is friendly and augurs for a test of 152.9.to 153.6.
Weekly Soybean Oil .
Soybean oil is another mkt that is poised to close higher on the year..
March Soybean Oil
Support is near 1615 to 1609 and 1576 to 1569 then 1535 to1529. Under that buyers should emerge near the
1496 to 1484 region
Resistance should appear near the 1642 to 1655 region, a close over is friendly and augurs for a test of 1689 to 1696 and eventually the 1731 to 1738 region ..
Trade Accordingly..
Daily March Corn
March Corn
Resistance should appear near 217 to 218 1/2 , an extended trade over augurs for a test of 221 3/4 to 222 3/4.. a close 222 3/4 over is friendly and indicates a test of
226 3/4 to 227 1/2 and eventually the 231 1/2 to 232 1/4 region.
Support should appear near emerge near the 213 1/2 to 212 3/4 region . Traders can buy at 213 3/4 for a turn higher and hold for higher prices. .Below that 208 3/4
to 208 should hold.
Daily March Wheat
Nearby Support should appear near 282 3/4 to 282.. Traders can buy at 282 3/4 hold for higher prices.. Below that buyers should appear near the 277 3/4
to 275 1/2..region... Under that 272 1/2 to 271 3/4 should contain a decline..
Failure there is negative and augurs for a test of 267 1/2 to 266 and the
262 to 261 1/4 region..
Resistance is at 287 1/2 to 288 3/4 and the 292 3/4 to 293 3/4 region. A close over is friendly and augurs for a test of 297 1/2 to 299 and eventually the 303 3/4 to 304 1/2 region
Buy Dips...
Traders should go long if a close over 288 3/4 occurs..
The Satisfying Softs
Weekly Cotton
March Cotton
Cotton futures, rallied sharply Friday with the most active Mar contract bouncing off a five week low to end the day up 215 points higher at 37.30
Support should appear near 3685 to 3660 and 3565 to 3555.Under that buyers should appear near the 3445 to 3425 region. Below that 3390 to 3370 should hold
Resistance is at 3855 to 3865 and 3980 to 3995..Beyond that a test of 4110 to 4120 is likely.. Above that sellers should appear near 4235 to 4250 and the 4505 to 4515 region..
Monthly Coffee
Coffee closed lower Friday after the market opened with an overhead gap but set back because of options-related
pressure. January options expired on the close. The market reached a three-week high in the early advance, influenced in part by Mexico's announcement that inferior beans would be held off the export market. Mexican officials approved a law forcing exporters to withhold inferior beans, amounting to 5% of 2001-02 shipments. Financing will be given to store low-grade coffee, which will be diverted to domestic use. U.S. stocks should show a decline of up to 400,000 bags in November in a monthly report from the Green Coffee Association scheduled to be released Monday afternoon bringing stocks to their lowest since June 2000.
However with the exception of an increase in 1992 and a sideways move in 1996, GCA stocks have dropped during every month of November in the past 10 years by between 100,000 and 467,000 bags, reflecting the seasonal lull in shipments.
Stocks will begin to increase in months ahead, however, as the Central American and Mexican crops arrive here.
2001-02 Central American and Mexican harvests are coming in smaller than expected Shipments from the region during the current 2001-02 season that started Oct. 1 have been sharply below last year's, partly because of the farmers' resistance to sell at current low world prices in addition to picking being affected by low world prices, according to local officials.
March Coffee
Support is near 4715 to 4695 and the 4585 to 4570 region Traders can buy at 4615 for a bounce and hold for higher prices.
Under that support should appear near 4515 to 4505 and 4445 to 4425 .. Below that buyers should appear near 4315 to 4305
Traders can buy at 4305 for a turn higher and risk a close under 4160 for three days in a row..
Resistance should appear near the 4845 to 4855 region, a close over 4855 is friendly and augurs for a test of 4975 to 4995 and the 5035 to 5065 region.. Beyond that a test of 5125 to 5140 is likely.
Traders should go long if a close over 4860 occurs. .
Stay tuned for updates
Weekly Sugar
March Sugar
Resistance should appear near 763 to 767 and 791 to 795, beyond that a test of 814 to 823 is likely.
Support should appear near the 739 to 735 region .. Below that buyers should appear near 712 to 704 and the 686 to 682 region.
Trade Accordingly
Weekly Cocoa
Cocoa is another one of those mkts poised to close the year higher. .
Cocoa futures ended stronger here Friday after an early short-covering surge lifted the market to two-week highs. The Ivorian crop should be bigger than last year, but quality has declined as the main harvest progresses. Meanwhile, world inventories are shrinking from heavy levels in the 1990s. The Ivorian industry puts the main crop at 950,000 to one million tonnes and sees mid-crop prospects as good, the USDA attaché there said Thursday.. An Ivory Coast decree in November requiring beans be bagged for export will adversely affect large shippers tied to bulk business, the attaché said. Purchases at Ivory Coast ports since the season began in October are running considerably above last year. World inventories, which had been excessive for a decade, are on the decline as projected demand exceeds global production for the second season. Consumption should surpass production by 150,000-200,000 tonnes this year, against 250,000 tonnes last year. Global inventories could be below one million tonnes at the end of the season for the first time since the mid-1980s.
March Cocoa
Resistance is at 1346 .Beyond that a test of 1377 to 1383 is likely Above that sellers should appear near
1415 to 1421.. Beyond that 1453 to 1459 should cap the rally for a bit.. Traders can sell at 1452 and hold for lower prices..
Risk a close over 1496 for three days in a row.. Above that sellers should appear near 1529 to 1535..
Support should appear near 1310 to 1304 then 1274 to 1268.. Below that buyers should appear near 1238 to 1232 and the 1203 to 1192 region.. Traders can buy at 1276 and risk a close under 1232 for three days in a row,...Below that Support should appear 1169 to 1164
A Ship in Harbor is Safe.. But that's not what ships are built for --
Happy Trading !
Bill !
Sunday December 16th 2001
4:00 PM
THIS PUBLICATION CONTAINS THE VIEW AND OPINIONS OF THE AUTHOR, EXCEPT WHERE OPINIONS
ARE ATTRIBUTED TO OTHER SOURCES. WRITTEN PERMISSION IS REQUIRED PRIOR TO ANY DISTRIBUTION OR REPRODUCTION. FUTURES TRADING ARE RISKY AND CAN CAUSE SUBSTANTIAL FINANCIAL LOSS. THE USE OF OPTIONS AND OPTION TRADING INVOLVES A HIGH DEGREE OF RISK. THE USE OF STOPS MAY NOT LIMIT LOSSES TO INTENDED AMOUNTS. SPREAD POSITIONS MAY NOT BE LESS RISKY THAN OUTRIGHT FUTURES POSITIONS. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. SOURCES ARE BELIEVED TO BE RELIABLE BUT NO ASSURANCE IS MADE FOR ACCURACY. ADDITIONAL RISK DISCLOSURE IS AVAILABLE.
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Premier Service
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Recommended Open Positions as of 12-14-2001
Long 20 March Soybeans Beans 437 1/2
Long 20 March Wheat 287 3/4 avg
Long 10 March Coffee 4820 avg
Index Program
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Recommended Open Position as of 12-14-2001
NONE
Morning Comment Day Trades (MC):
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