Economic and Investment Trend Analysis - Socio Economics - Forex - Bonds - Dow Jones - Nasdaq - SP500
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FuturesCom Investment Publications
Morning Comments, Monday August 4th , 2003
Experienced Since 1979 - Serving Professional and Individual Traders World Wide since 1988
7690 Rockport Circle, Lake Worth, Florida 33467 Tel: 1-561-433-2995 http://www.futurescom.com
Sunday August 3rd , 2003
7:00 AM Eastern time
On Friday Sept Crude posted new contract highs. The dollar gave back some gains closing lower as the Canuck and Swiss traded above Thursdays highs and closed higher on the day in the face a declining gold mkt , which in my opinion remains a buy for the long term as Gold appears to be clawing it’s way out of the 20 year sideways action..
Friday's equity action was soft as the Dow , SP500 and Nasdaq closed under Thursday's lows .
Here we are August 2003 already and let me see if I can get this right..
Rising unemployment.. Rising interest rates. and Forecasts now being raised for next years’ GDP equal a constantly rising stock market..
I suspect that is hardly the case..
History has shown that contrary to Wall Street’s rants and raves economic growth does not necessarily mean a perpetually rising stock mkt...
or example does anybody wonder why the Raving Bulls never speak about 1968 to 1982..? ( the U.S. economy grew at an aggregate over 250 %.. more that the aggregate 175 % percent from 1982 to 1999. )
Why not talk about it ? Because the Stock market essentially moved sideways with little change…
Presently economic forecasts for above trend growth keep getting pushed out into the future …then reality sets in… it’s the same old story over and over again..
Currently long term rates have shot up and that is supposed to be good and a sign of a pick up in business activity, which may well be true. However in my opinion the deficit shock ,the Folly of Fed and perhaps some rather hefty loss taking by some rather large portfolios...
The reality is very little job growth , economic growth is meek at best and being aided in a large part by defense spending. The danger here is that it’s not going to get dramatically better anytime soon.. toss in a rise in long-term rates and the mix equals a disaster for the stock mkt as it has to re-adjust for the potential of a moderation in consumer spending once the refinance boom falls apart and the tax rebates checks come and go…
Many forecasters , economists and popular TV personalities who are highly regarded make comparisons of today’s Stock market to lift off of 1982 and the post desert storm period to justify a new bull mkt in stocks.
However in my opinion there are some very striking differences :
The 1982 bull market beginning was preceded by a long period from the mid to late 1960’s where the stock market moved sideways.. It spent time in three decades at near the same level at different stages.
In 1980 the PE ratio of the SP500 companies was 8 to 10 , currently it’s above 30 on trailing earnings and closer to where is was near the top of the market in 2000.
While that long sideways action was occurring Bright and Visionary young men started a number of businesses .. Many out of garages with no money and lots of ideas! In The late 1970’s and early 1980’s consumer’s attitudes changed to buy American as the Japanese were at the time on top of the world…(Boy .. what a wake up call Japan has gone thru !!)
Now those visionaries have untold amounts of money and rather scant ideas (except in medicine).
Once again we have a struggling manufacturing sector that is facing untold challenges, such as low priced imports and exporting of both manufacturing and white collar service jobs overseas where we do not have nearly the same international relationships we had with Japan in late 1970’s and early 1980’s.
In 1990 the PE ratio was near 17 and post Desert Storm period it stood in the 20’s as the visionaries drove the economy forward. At that time, baby boomers were just entering their later aggressive work and wealth accumulation years. The equity market never broke long-term trend lines and moving averages.
In the face of a multitude of negative events the visionary men and the market moved forward.
Are those same things happening now ? Hardly…
Granted the Fed is producing an environment for growth . the Govt is returning money to businesses and taxpayers.. but where is the vision for the post 911 economy .. the not so young any more visionaries appear stumped except for the medical industry .
However the population will rapidly in historical terms get older and leave the workforce only to be replaced by fewer younger individuals… Who in my opinion , at some point AGAIN show clear vision and repeat the raging bull cycle in equities.. however that may be YEARS away
Thus leaving the current market situation in sort of a funk that really goes nowhere for quite some time. As it tries to deal with a little mentioned economic theme from the past A POINT OF DIMINISHING RETURNS, which so far corporations have handled nicely (productivity) with reductions in employment .. lower borrowing cost and a consumer who continues to spend .. But what if that changes .. rates go up.. the consumer ages ?
The current situation is nothing like 1982 or 1991, it appears that we are more like the early stages of the long sideways action prior to1982 however to avoid further ranting on to the nitty gritty.... .
The ‘Frenzied’ Forex Front
Sept Yen
Recommended Open Position Long 8317
Support should appear near 8314 to 8300 and the 8223 to 8194 region…
Resistance should appear near 8391 to 8496 and 8484 to 8499
Sept Euro Currency (EC)
Recommended Open Position Long 11155
Support should appear at 11226 then 11155 and 11010 to 10960 .
Resistance is at 11300 to 11330 and 11360
Sept Swiss Franc
Recommended open position long 2 at 7399 avg
Resistance should appear near 7342 and 7414 to 7428
Support should appear near 7255 to 7242
Sept British Pound
Support should appear near 16002 .. below that buyers should appear near 1.5928 and the 1.5760 to 1.5690 region.
BW Traders can buy at 1.5932 and hold for higher prices..
Resistance should appear near 16090 to 16150
Sept Canadian Dollar
Support should appear near 7088 to 7074 .and 7003 to 6990
Resistance is at 7143 to 7170
Sept Aussie Dollar
Recommended Open position Long 2 at 6582 avg
Support is at 6430 to 6417
Resistance should appear near 6496 to 6509.
The Sensational Stock and Bond Markets
Dow Jones Industrial Average
Resistance should appear near 9316 to 9347 and 9429 to 9445
Support should appear near 9140 and 9060 to 9044
Sept SP500
Recommended Open position Short at 980.8
Resistance should appear near 982.1 to 983.70 then 992.10 to 993.70 and the 1000 to 1005 region. Beyond that sellers should appear near 1018.5 and the 1032 to 1036 region
Support should appear near 973.70 to 970.60 and the 964.1 to 962.50 region
Stay tuned for BW SP500 Updates and Index program trades , while day trades can occur at anytime
Nasdaq Composite
Resistance should appear near 1731 to 1738 then 1756 and the 1774 to 1780 region.
Support should appear near 1713.5 and 1696 to 1689
September Mini Nasdaq 100
Resistance is at 1268 to 1274 then 1304 to 1310 and 1334 to 1346
Support is at 1253 and the 1238 to 1232 region.
September Ten Year T-Notes
Resistance should appear near 110-23 then 111-04 and 111-23
Support is at 110-04 then 109-22 and 109-07
December Gold
Recommended Open Position Long at 364.1
Support should appear at 344.3 to 342.5 and 340.6
Resistance is at 349.3 to 350.3 and 352.8
Sept Copper
Recommended open Position Short at 7940
Support should appear near 8045 to 8025 and 7955 to 7940
Resistance should appear near 8195 to 8225 and 8300 to 8315
Sept Silver
Recommended open Position Long at 519.5.
Support should appear near 506.5 to 505.5. Below that buyers should appear near 492.5 to 491.5 then 485.5 to 484.5 and the 478.5 to 477.5 region. BW Traders can buy at 487.5 and risk a close under 474.5 for three days in a row.
Resistance is at 512.5 to 514 then 520 to 521.5 and 525.5 to 528
The Exciting Energies
Sept Crude Oil
Support should appear near 3213 to 3194 and 3157 to 3147.
Resistance is at 3261 to 3270 and 3319 to 3328
Sept Unleaded Gas
Support should appear near 9345 to 9315 and 9235, under that 9155 to 9140 shold hold
Resistance should appear near 9525 to 9545 and the 9705 to 9735 region
Sept Heating Oil
Resistance is at 8560 to 8590 and the 8760 to 8775 region
Support should appear near 8495 to 8480 then 8405 to 8390 and the 8315 to 8300 region
The Lively Livestock
October Live Cattle
Support should appear near 7777 to 7762 .
Resistance is at 7837 to 7867
October Hogs
Support is at 5067 to 5057 and 4997 to 4972
Resistance is at 5127 to 5142 and 5197 to 5212
August Pork Bellies
Recommended Open position long at 8972
Support should appear near 8590 to 8560 and 8407 to 8392
Resistance is at 8667 to 8682 and 8762 to 8777
Stay Tuned for Livestock Updates and Flashes
The Grande’ Grains
September Soybeans
Resistance is at 520 to 521 1/4 and 525 3/4 to 528 3/4
Support should appear near 513 3/4 to 512 1/2 and 506 1/2 to 503 1/2
November Soybeans
Resistance is at 520 to 521 1/4 and 525 3/4 to 528 1/4
Support should appear near 513 3/4 to 512 3/4 and 506 3/4 to 505 3/4
September Soymeal
Support should appear near 161.5 to 160.9
Resistance should appear near 164.2 to165.5
September Soybean Oil
Resistance should appear near 1946 to 1953 and 1982 to 1996
Support should appear near 1909 to 1902
December Corn
Resistance should appear near 217 to 218 1/2 .
Support is at 213 1/2 to 212 3/4 and 208 3/4 to 208
Resistance is at 355 1/4 to 356 1/4 and 361 1/4 to 362 1/4
The Satisfying Softs
September the ‘Monster’ Coffee
Support is near 6485 then 6430 to 6415 and 6350 to 6335
Resistance should appear near 6575 to 6590 and 6655 to 6675.. beyond that a test of 6740 to 6755 is likely.
Sept Cocoa
Support is at 1459 to 1453 and 1421 to 1415
Resistance should appear near 1484 to 1496
October Sugar
Support should appear near 712 to 704
Resistance should appear near 735 to 739.
December Cotton
Support should appear near 5790 and the 5730 to 5715 region..
Resistance should appear near 5855 to 5880 and 5945 to 5955
A Ship in Harbor is Safe.. But that is not what ships are built for –
Happy Trading!
Bill wil@futurescom.com
1-561-433-2995
Sunday August 3rd 2003
3:00 PM, South Florida Beach Time
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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