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Weekly Market Watch
The
Future is in Futures
by Pearce
Financial, LLC
January 17 - January
21, 2005
Based
on last week's trading activity & reports,
the following markets are setting up for potential trading
opportunities.
Stock
indices - The March
S&P 500 finds near term support at last week's one month
low of 1176.50. Further support is at the current major daily Fibonacci
.382 retracement at 1160.10. A break below it could cause a slide to the
current major daily Fibonacci .618 retracement at 1122.80 or even the
monthly 18-bar Moving Average at 1112.80. Watch for buy set ups in this
area. The S&P 500 has not closed below the monthly 18-bar Moving
Average since the spring of 2003. Near term resistance is at the current
contract high of 1220.50. Further resistance is at the major monthly
Fibonacci .618 retracement at 1265.90. A break out above this level
should immediately allow the market to test the psychological 1300 mark.
Open Interest is flat. The %R overbought/oversold indicator shows that
the S&P 500 is oversold on the daily chart but overbought on the
monthly chart. Seasonally, the S&P 500 should move lower in the
second half of January and stage a rally in the last couple trading days
of the month. Commercials
increased the size of their biggest net short position in sixteen
months. Large traders (hedge funds) are very bullish. Small traders are
still holding the biggest net long position in seven months.
The March NASDAQ 100 finds near term support at last week's two month low of 1547.50. Further support is at the current major daily Fibonacci .382 retracement at 1519.10. If the market does not stabilize here expect a sell off to the monthly 18-bar Moving Average at 1458.80 (the NASDAQ 100 has not closed below the monthly 18-bar Moving Average since April of 2003) or the current major daily Fibonacci .618 retracement at 1441.40. Near term resistance is at the contract high of 1645.00. A break out above it could send the NASDAQ 100 up to the December 2001 high of 1738.00. Open Interest is flat. The %R overbought/oversold indicator shows that the NASDAQ 100 is oversold on the daily chart and overbought on the monthly chart. The NASDAQ 100 should decline from mid-January until the end of February. Commercial interests holding the biggest net short position in nearly sixteen months. Large are neutral to bullish. Small traders are holding their biggest net long position since Thanksgiving of 2003.
Interest rates - March T-bonds find near term resistance at last week's new contract high of 114-05. Further resistance is at the weekly October high of 114-25. If this retracement is exceeded the market should be on it's way to the major weekly Fibonacci .618 retracement at 116-06. Near term technical support is at the current major weekly Fibonacci .382 retracement at 110-13 in confluence with the monthly December low of 110-11. A break below this price level could smash March T-bonds to the current major weekly Fibonacci .618 retracement at 107-19. The March NOB spread (T-notes vs. T-bonds) finds near term resistance at last week's new spread high of 1-21 premium T-bonds. Further resistance is at the psychological 2-00 level. If the spread does not stop here it may attempt to test the 2003 all-time weekly high of 3-04. Near term daily support is at the current major daily Fibonacci .382 retracement at 16/32nds premium T-notes and followed closely by the November low of 27/32nds in confluence with the daily December low of 27/32nds. A break below this support zone could send the spread to the current major daily Fibonacci .618 retracement at 1-27 premium T-notes. Open Interest is at a one month high. The %R overbought/oversold indicator shows that T-bonds reached overbought on the daily chart. T-bonds have a seasonal tendency to move sideways for the second half of January. Commercial interests are holding a massive short position. Large traders interests are still holding an extremely large net long position. Small traders are bearish but turning neutral.
March T-notes find near term resistance at the daily December high of 112-31. Further resistance daily is at the contract high of 113-165. A break out to new contract highs should send March T-notes up to the weekly September high of 114-12. Further resistance levels are located at the intermediate weekly Fibonacci .786 retracement at 115-255 and the major weekly Fibonacci .618 retracement at 116-005. Near term support is found at the current intermediate weekly Fibonacci .618 retracement at 110-10 in confluence with the December low of 110-085. If T-notes do not stabilize here expect a further decline to the current intermediate weekly Fibonacci .786 retracement at 109-065. Further support is at the major daily Fibonacci .618 retracement at 107-20. Open Interest is flat. T-notes have a seasonal tendency to trade in a sideways choppy channel for the second half of January. Commercials are holding the biggest net long position in nearly four months. Large traders (hedge funds) are net short for the first time since Labor Day. Small traders are still holding a huge net short position.
International bonds - March Canadian 10-year bonds find near term resistance at last week's high of 112.64 followed by the contract high of 112.76. Further resistance is at the weekly December high of 113.00. If this high is exceeded Canadian bonds could make it to last year's weekly high near 113.50. Near term support is at the late December reaction low of 111.20. Further support is at last month's low of 110.60. (Canadian bonds have made higher monthly highs and higher monthly lows for six consecutive months). A break below the December low should take the market right to the daily November low of 109.85. March Euro bunds find near term resistance at last week's high of 119.87. A rally above it could allow the market to test the contract high of 119.97 in confluence with the 2003 all-time high near the 120 mark. Near term support is at the late December low of 118.11. A break below it could send bunds down to a technical support cluster between the current major daily Fibonacci .382 retracement at 116.22, the current intermediate daily Fibonacci .618 retracement near 115.82, and the November low near 115.65 (bunds have made higher monthly highs and higher monthly lows for five consecutive months). If bunds do not stabilize in this area look for a drop to the current major daily Fibonacci .618 retracement at 113.90 or even the daily September low near 113.30. March London long gilts find near term support at the December spike low of 109.71 followed by the daily November low of 109.37. (Gilts have made higher monthly highs and higher monthly lows for five consecutive months). If these lows are broken the market could decline to the current major daily Fibonacci .618 retracement at 108.48 in confluence with the daily October low of 108.45. Near term resistance is at last week's high of 112.10. A rally above it could allow the market to test the contract high of 112.65. A break out to new contract highs could send gilts to the psychological 115 mark. March Australian 10-year bonds find near term resistance at last week's high of 94.805. (Aussie bonds have made lower weekly highs for four out of the last five weeks). A break out above this level could reverse the down trend and send the market back up to the contract high of 94.875 in confluence with the weekly 2004 high at 94.89. Further resistance is at the major weekly Fibonacci .786 retracement near 95.09. Near term support is at the current January low of 94.46 in confluence with the November low of 94.445. If Aussie bonds do not stabilize here they could plummet to the major weekly Fibonacci .618 retracement at 94.25. March JGB's (Japanese gov't. bonds) find near term resistance at last week's new contract high of 139.39 followed by the weekly December high at 139.50. If this price level is exceeded JGB's could run to the weekly 2004 high near 140.50. Near term support is at the late December reaction low of 138.21. A break below it could send the market to the current daily intermediate Fibonacci .618 retracement at 137.10.
Currencies - The US dollar index finds near term resistance at the January 7th reaction high of 83.90. A break out above it should start a bull run that immediately takes it to the current major daily Fibonacci .382 retracement at 85.40. Further resistance is at the monthly 18-bar Moving Average at 88.36 (the US dollar index has not closed above the monthly 18-bar Moving Average since March 2002) in confluence with the current major daily Fibonacci .618 retracement at 88.43. Near term support is at last week's low of 82.05. A break below it could take it down to an important support zone between the contract low of 80.48 and the 1995 low of 80.14. A close below the 80 level could allow the greenback to dive to the 1992 low of 78.43. Open Interest is at the lowest level in three and a half months. The %R overbought/oversold indicator shows that the greenback is still oversold on the monthly chart. The Seasonal index shows that the dollar should rally sharply in January. Commercial interests dumped half of their net long position from the previous week and they are the least bullish since September. Large traders are the least bearish in nearly four months. Small traders are net long for the first time since Memorial Day.
The March Canadian dollar finds near term support at the December low of .8017 followed by the major daily Fibonacci .382 retracement at .7988. If the "looney" does not establish support in this price zone it could decline to the major daily Fibonacci .618 retracement at .7656. Near term resistance is at last week's one month high of .8370. A rally above it could send the market back up to the contract high of .8526. If the "looney" hits a new contract high it may be headed to the 1991 high of .8906. Open Interest is flat. Seasonally, the Canadian dollar has a tendency to decline sharply in January. Commercial interests are still the least bearish since July. Large traders are still holding their smallest net long position since late June. Small traders are neutral.
The March Australian dollar finds near term support between the January 7th reaction low of .7502 and the weekly 18-bar Moving Average that it has not closed below for the last four months. Further support is at the major daily Fibonacci .382 retracement at .7394 in confluence with the December low of .7388. If the Aussie does not stabilize just below 74 cents it could slide to the October low of 71 cents in confluence with the major daily Fibonacci .618 retracement at .7094. Near term resistance is at the December 31st reaction high of .7804. A break out above 78 cents could allow the market to visit the contract high of .7879. Further resistance is at the weekly November high of .7938 or even the weekly 2004 high of .7980. Open Interest is flat. Commercials lightened up just a little from the previous week but they are still holding a near record net short position. Large traders (hedge funds) are the least bearish since mid-October but they are still holding a huge net long position. Small traders are bullish.
The March Canadian dollar/Australian dollar spread finds near term resistance at last week's one month high of .0694 (about seven cents) premium Canadian dollar. Further resistance is at the current major daily Fibonacci .618 retracement at .0787 (nearly eight cents) premium Canadian dollar. Near term support is at the December low of .0467 (about four and two-thirds of a cent) premium Canadian dollar in confluence with the July low of .0454 (about four and a half cents). A break below it could take the spread to the major daily Fibonacci .618 retracement at .0321 (about three and a quarter cents).
The March British pound finds near term resistance at last week's high of 1.8869. (Sterling has made lower weekly highs for five consecutive weeks). Further resistance is at the current daily Fibonacci .618 retracement at 1.9112. A rally above it could send cable back up to the contract high of 1.9446 or the weekly December high of 1.9500. If the market closes above this high it may be catapulted to the psychological two dollar mark or the 1992 high of 2.0088. Near term support is currently clustered between the January 7th reaction low of 1.8571, the weekly 18-bar Moving Average that it has not closed below for three months, and the major daily Fibonacci .382 retracement at 1.8565. If this price zone does not stop the decline in this market look for a drop to the major daily Fibonacci .618 retracement at 1.8020. Open Interest is almost at a three month low. The %R overbought/oversold indicator shows that the pound is oversold on the daily chart. The pound has a seasonal tendency to drop sharply from the beginning of January until March. Commercials are the least bearish in two and a half months. Large traders (hedge funds) are holding their smallest net long position since late October. Small traders are selling out of their net long position.
The March Swiss franc finds near term support between the January 7th reaction low of .8436, the weekly 18-bar Moving Average that it has not closed below since mid-September, and the major daily Fibonacci .382 retracement at .8421. A break below this support zone should cause a quick sell off to the November low of .8295 or the intermediate daily Fibonacci .382 retracement at .8259. Further support is at the major daily Fibonacci .618 retracement at .8131. Near term resistance is at the current major daily Fibonacci .618 retracement at .8718. If this retracement is exceeded look for the market to challenge the contract high of .8892. Further resistance is found between the psychological 90 cent level and the 1995 high of .9038. Open Interest is at the lowest level since mid-October. The %R overbought/oversold indicator shows that the Swiss franc is oversold on the daily chart. The Seasonal index shows that the Swiss franc usually declines sharply in January. Commercial interests dumped about three-quarters of their net short position from the previous week to become the least bearish since October. Large traders are holding the smallest net long position since then. Small traders are holding the smallest net long position since early October.
The March Euro currency finds near term support at the January 7th reaction low of 1.3032. A break below it should take the market right to the major daily Fibonacci .382 retracement at 1.2947 in confluence with the weekly 18-bar Moving Average that it has not closed below for the last four months. Further support is at the major daily Fibonacci .618 retracement at 1.2490. Near term resistance is at the current major daily Fibonacci .618 retracement at 1.3437. Further resistance is at the all-time high of 1.3687. A break out to new all-time highs could allow the market to quickly approach the psychological 1.40 area. Open Interest is almost at a three month low. The %R overbought/oversold indicator shows that the Euro is almost oversold on the daily chart. Seasonally, the Euro should drop substantially in the second half of January.
The March Japanese yen finds near term support at the December low of .009476. (The yen has made higher monthly lows for five consecutive months). If last month's low is broken the yen could slide to the major daily Fibonacci .618 retracement at .009254. Near term resistance is at last week's one month high of .009864 followed by the contract high of .009885. Further resistance is at the 2000 weekly high of .009974 in confluence with the late 1999 high of .009990. Open Interest is flat. The %R overbought/oversold indicator shows that the yen is overbought on the weekly and monthly charts. The yen has a seasonal tendency to decline sharply in January. Commercial interests are the least bearish since mid-October. Large traders are the least bullish since then. Small traders are also the least bullish since then.
Metals - February gold finds near term support at the January 7th reaction low of $417.10. A break below it should allow gold to visit the major daily Fibonacci .618 retracement at $408.30 or the current monthly 18-bar Moving Average at $406.50. (Gold has not closed below the monthly 18-bar Moving Average since July of 2001!) If the market does not stabilize here it should test major support between the major monthly Fibonacci .382 retracement at $378.30 and last year's monthly low of $372.00. Near term resistance is at the current daily Fibonacci .618 retracement at $442.50. Further resistance is at the contract high of $458.20. Open Interest is at a three and a half month low. The %R overbought/oversold indicator shows that gold is oversold on the daily chart. The Seasonal index shows that gold should establish an important seasonal high in mid-January and then decline sharply until the end of March. Commercials continued to cover short positions and they are now holding the smallest net short position in five months. Large traders (hedge funds) are holding the smallest net long position since August. Small traders are neutral.
March silver finds near term support at the January 7th reaction low of $6.35. Further support is at the intermediate weekly Fibonacci .786 retracement at $6.085 in confluence with the weekly September low of $6.065. A break below six dollars could smash this market to last year's low on the weekly chart at $5.51. Near term resistance is at last week's high of $6.775 (silver has only exceeded a previous week's high once in the last six weeks) and the 18-day Moving Average that it has not closed above for over a month. A break out above it could reverse the current down trend and take the market back up to the current daily Fibonacci .382 retracement at $7.07 in confluence with the December 27th reaction high if $7.09. Further resistance is at the current daily Fibonacci .618 retracement at $7.515. Open Interest is at a three and a half month low. The %R overbought/oversold indicator shows that silver is still near oversold on the daily chart. Seasonally, silver should be flat to lower in the second half of January. Commercials are now the least bearish in three and a half months. Large traders (hedge funds) are the least bullish since late September. Small traders are neutral.
March copper finds near term support at the January 4th reaction low of 132.35 in confluence with the current major daily Fibonacci .382 retracement at 131.80. If March copper does not stabilize here it could plummet to the current major daily Fibonacci .618 retracement at 121.90 or the October low of 120.50. Near term resistance is at the huge daily chart gap between last week's high of 141.40 and 145.80. If this big hole in the chart is filled the market should be able to challenge the contract high of 147.75 in confluence with the 2004 weekly high of 148.20. A break out above this price barrier could cause an explosive move to the 1988 multi-decade high of 160.65. Open Interest is at a two month low. The %R overbought/oversold indicator shows that copper is overbought on the weekly and monthly charts. Copper has a seasonal tendency to move sideways in January. Commercials are still holding the same size of net short position that they have had for weeks. Large traders (hedge funds) are still bullish. Small traders remain neutral.
Energies - February crude oil finds near term resistance at last week's one and a half month high of $48.65. Further resistance is at the current major daily Fibonacci .618 retracement at $49.46 or the November 30th reaction high of $50.55. If the market does not stop here it may attempt to test the all-time high of $55.65. Near term support is at last week's low of $45.00. (Crude oil has only broken a previous week's low once in the last five weeks). A break below last week's low could allow the market to test bigger weekly support between the weekly December low of $40.25 and the 2003 weekly high of $39.99 (old resistance). If the market does not stabilize here it could decline to the 2004 weekly low of $32.20 or the major weekly Fibonacci .618 retracement at $31.58. Open Interest is at a two month high. The Seasonal index shows that crude oil should decline in the second half of January. Commercial interests are still holding a huge net long position. Large traders are neutral to bearish. Small traders remain bearish.
February Unleaded Gas finds near term resistance at last week's one and a half month high of 128.00. Further resistance is at the current major daily Fibonacci .618 retracement at 130.17. If the market can penetrate this price level it may run to it may be headed to the daily November high of 136.30 in confluence with the current major daily Fibonacci .786 retracement at 136.60. Near term support is at the daily December low of 106.50 followed by the weekly December low of 103.50. A break below this price level could pressure the market down to last year's low on the weekly chart at 92.90. Open Interest is almost at an all-time high. Seasonally, gasoline should decline in the second half of January. Commercials interests are neutral to bullish. Large traders are bearish. Small traders are also bearish.
February Heating Oil made an outside reversal up on the weekly chart when it took out the previous week's low and then reversed to clear the previous week's high. This is bullish price action. A break out above last week's high of 129.00 and a rally over the current major daily Fibonacci .382 retracement at 132.04 could take prices to the current major daily Fibonacci .618 retracement at 141.46. If the market does not stop here it may be headed to the daily November high of 147.90 in confluence with the current major daily Fibonacci .786 retracement at 148.16. Near term support is at the major weekly Fibonacci .382 retracement at 117.90 and last week's low of 116.80. A break below it could allow for a further decline to the major monthly Fibonacci .382 retracement at 110.22. Open Interest is at a six month low. Seasonally, heating oil should rally in the second half of the month. Commercials interests are still holding one of their biggest net long positions since the winter of 2002. Large traders are the most bearish in years. Small traders are now the most bearish in fifteen months.
February natural gas finds near term resistance is at last week's high of 6.55 (natural gas has only broken a previous week's high once in the last four weeks) in confluence with the 18-day Moving Average that it has closed above only once since Thanksgiving. A break out above this near term resistance could end the down trend in natural gas and send it back to the current daily Fibonacci .382 retracement at 7.335. Further resistance is at the daily December high of 7.85. Near term support is at the contract low of 5.71. A break below it could pressure the market down to the psychological 5.00 mark. Open Interest is at the highest level since February of 2003. The %R overbought/oversold indicator shows that natural gas is just now moving out of oversold territory on the daily chart. Natural gas has a seasonal tendency to decline substantially from January to mid-February. Commercial interests are still aggressively increasing the size of their biggest net long position since Thanksgiving of 2003. Large traders are holding the biggest net short position in three years. Small traders are neutral to bullish.
Meats - February live cattle finds near term resistance at the contract high of 92.75 in confluence with the weekly December high at 92.95. If these highs are exceeded look for a run to the major weekly Fibonacci .786 retracement at 97.00. Near term support is at the January 6th reaction low of 87.40. Further support is at the November low of 85.25. If cattle does not stabilize here look for a decline to the daily May low of 83.25. Failure to stabilize here could result in a drop to the major daily Fibonacci .618 retracement at 81.75. Open Interest is at a new all-time high. The %R overbought/oversold indicator shows that cattle is nearing overbought levels on the daily and weekly charts. The Seasonal index shows that cattle should drop this week and then rebound in the last week of January. Commercials are now holding the biggest net short position in two and a half months. Large traders (hedge funds) are the most bullish in five months. Small traders are now holding the biggest net short position since March of 2001.
March feeders find near term resistance at last week's two and a half month high of 103.20. Further resistance is at the contract high of 105.30. If March feeders hit new contract highs they could rally to the major weekly Fibonacci .618 retracement at 111.32. Near term support is at last week's low of 98.90. (March feeders have only broken a previous week's low once in the last five weeks). A break below it could allow the market to visit the December low of 95.70 or the November low of 95.00. Further support is at the major daily Fibonacci .618 retracement at 92.95. Open Interest is almost at a three month high. The %R overbought/oversold indicator shows that feeders are overbought on the daily chart. Seasonally, feeders should move sideways to slightly higher from mid-January to mid-February. Commercial interests are the least bullish in two months. Large traders are holding the biggest net long position since mid-October. Small traders are holding the biggest net short position since October of 2003.
February lean hogs find near term support at last week's low of 74.32. (February hogs have only broken a previous week's low once in the last five weeks). A break below it could allow the market to test the December low of 70.55. Further support is found at the major daily Fibonacci .382 retracement at 69.45 or the September high of 68.75 (old resistance). If the market cannot stabilize here it could be on it's way to the October low of 63.30. Near term resistance is found between last week's high of 77.35 and the contract high of 77.72. A break out to new contract highs could shoot hogs to the 2004 weekly high of 82.70. Open Interest is near the all-time high. The %R overbought/oversold indicator shows that hogs are nearly overbought on the daily, weekly, and monthly charts. Hogs have a seasonal tendency to rally sharply in January. Commercials are holding the biggest net short position in six months. Large traders (hedge funds) are holding the biggest net long position since May of 2000. Small traders increased the size of their record short position.
Grains - March soybeans have been locked in a trading range for three months now. Near term resistance is found between the November high of $5.65 and the current intermediate daily Fibonacci .382 retracement at $5.682. A break out above it could allow the market to run to the current intermediate daily Fibonacci .618 retracement at $6.04 followed by a daily chart gap between $6.06 and $6.23 in confluence with and the major daily Fibonacci .382 retracement at $6.16. Near term support is at the contract low of $5.10. If March soybeans hit a new low it could plummet to the 2002 low of $4.154 or the 1999 multi-decade low of $4.014. Open Interest is flat. The %R overbought/oversold indicator shows that beans are oversold on the daily and weekly charts. The Seasonal index shows that soybeans usually decline in January. Commercial interests are still holding a huge net long position. Large traders are holding an extremely large net short position. Small traders are turning neutral.
March soy meal finds near term resistance between last week's high of $167.30 and the December high of $169.00. A break out above it should send the market to a daily chart gap between $177.30 and $178.30. Further resistance is at the current major daily Fibonacci .382 retracement at $186.80. Near term support is at last week's low of $154.50. A break below it could send the market back down to the contract low of $150.50. Further support is at the weekly 2002 low of $145.40. If meal does not find support in this area it may be doomed to hit the 1999 multi-year low of $120.30. Open Interest is flat. The %R overbought/oversold indicator shows that meal is oversold on the daily, weekly, and monthly charts. Seasonally, soy meal should decline until about mid-February. Commercials are the least bullish in two and a half months but they are still holding a very large net long position. Large traders (hedge funds) are the least bearish in three and a half months but they are still holding a huge net short position. Small traders are extremely bearish.
March bean oil finds near term support at last week's new contract low of 19.53. Further support is at the 2003 weekly low of 19.30. A drop below it could send the market right to the major weekly Fibonacci .786 retracement at 18.81. Near term resistance is clustered between the current intermediate daily Fibonacci .382 retracement at 21.85, the November high of 22.03, and the October high of 22.15. A strong close above 22 cents could allow the market to rally another penny and take on another price barrier between the current major daily Fibonacci .382 retracement at 23.05 and the current intermediate daily Fibonacci .618 retracement at 23.28. Open Interest is at a two month high. The %R overbought/oversold indicator shows that bean oil is oversold on the daily and weekly charts. Bean oil has a seasonal tendency to move sideways in January. Commercial interests are still holding a sizable net long position. Large traders are holding one of their biggest net short position in years. Small traders are the most bearish since October of 2001.
March corn finds near term support at last week's new contract low of $1.97. A drop below it should allow the market to test the 2002 low of $1.914. Further support is at the 2001 low of $1.84. Near term resistance is at the December high of $2.094 in confluence with the January 7th reaction high of $2.096. A break out above it could allow the market to visit the current minor daily Fibonacci .382 retracement at $2.184 in confluence with the November high of $2.19. Further resistance is at the current minor daily Fibonacci .618 retracement at $2.316. If March corn can make it thru all of these price barriers look for it to challenge the September high of $2.514, the August high of $2.53, and the current major daily Fibonacci .382 retracement at $2.524. Open Interest is at the highest level since Thanksgiving. The %R overbought/oversold indicator shows that corn is still oversold on the daily, weekly, and monthly charts. The Seasonal index shows that corn should decline in the second half of January. Commercials are still holding a record net long position. Large traders (hedge funds) are holding a record size net short position. Small traders remain bearish.
March rice finds near term support at the contract low of 6.90. Further support is at last year's weekly low of 6.58 followed by the major weekly Fibonacci .618 retracement at 6.445. Near term resistance is at last week's high of 7.29. (March rice has made lower weekly highs for three consecutive weeks). A rally above it could allow the market to test the daily double top December high of 7.85. If the market can take out this price obstacle it should have no problem trying the current major daily Fibonacci .382 retracement at 7.985. Further resistance is at the 8.50 level. Open Interest is almost at a four month low. The %R overbought/oversold indicator shows that rice is oversold on the weekly chart. Seasonally, rice should establish an important seasonal high in mid-January and then decline until May. Commercial interests are holding the largest net short position since last summer. Large traders (hedge funds) are the most bullish in three months. Small traders are neutral to bullish.
March oats tested the intermediate daily Fibonacci .618 retracement last week. Near term resistance is located between last week's three and a half month high of $1.65. Further resistance is at the September high of $1.77. Near term support is at the January 4th reaction low of $1.52. A break below this low should take the market right down to the October low of $1.434. Further support is at the contract low of $1.352. Open Interest is flat. The %R overbought/oversold indicator shows that oats are overbought on the daily chart. Oats have a seasonal tendency to decline sharply in January. Commercials are holding their biggest net short position in over six months. Large traders (hedge funds) are the most bullish since mid-June. Small traders remain neutral.
March wheat are holding their biggest net short position in over six months. Large traders (hedge funds) are the most bullish since mid-June. Small traders remain neutral. Commercial interests are holding a near record size net long position. Large traders are holding a near record net short position. Small traders are neutral.
Softs - March coffee finds near term support clustered between last week's low of 95.10, the current major daily Fibonacci .382 retracement at 94.40, and the December low of 93 cents. If prices don't perk back up from this level look for a drip to the current major daily Fibonacci .618 retracement at 85.60. Near term resistance is at last week's high of 102.20. (March coffee has made lower weekly highs and lower weekly lows for three consecutive weeks). A rally above it may allow the market to test the contract high of 108.70. A break out to new contract highs could send coffee to the July of 2000 high of 119.00. Open Interest is at a six week low. The %R overbought/oversold indicator shows that coffee is still near overbought on the monthly chart. Seasonally, coffee should head lower in January. Commercials are holding a near record net short position. Large traders (hedge funds) are holding a near record net long position. Small traders are neutral.
March cocoa finds near term support at last week's low of $1,464. Further support is at the daily October low of $1,408. A break below the $1,400 level could send March cocoa to the contract low of $1,340. Near term resistance is found between last week's high of $1,515 (March cocoa has made lower weekly highs and lower weekly lows for five consecutive weeks) and the 18-day Moving Average that it has not closed above for a month. A break out above this short term resistance could be an indication that the bear trend has ended. This may allow March cocoa to test the current daily Fibonacci .618 retracement at $1,677. Further resistance is at the December high of $1,723 followed by the current daily Fibonacci .786 retracement at $1,734. Open Interest is flat. The %R overbought/oversold indicator shows that cocoa is near oversold on the daily chart. Cocoa has a seasonal tendency to trade in a choppy range in January. Commercial interests are the least bearish in over two months. Large traders are the least bullish in two months. Small traders are still heavily net long.
March sugar may be in trouble. After the outside reversal down on the weekly chart two weeks ago, this market dropped even lower and closed below the weekly 18-bar Moving Average for the first time in four months. Near term support is staggered between last week's low of 8.51, the December low of 8.44, and the November low of 8.35. After that look for March sugar to head right to the current major daily Fibonacci .382 retracement at 8.13 in confluence with the daily August low of 8.13. Near term resistance is located between the January 4th reaction high of 9.23 and the contract high of 9.37. Further resistance is at the intermediate weekly Fibonacci .786 retracement at 10.02. Open Interest is pulling back from the all-time high it hit the week before. The %R overbought/oversold indicator shows that sugar is nearly overbought on the monthly chart. The Seasonal index shows that sugar should move sideways for the rest of the month. Commercials are still sitting on a large net short position. Large traders (hedge funds) remain aggressively net long. Small traders are bullish.
March orange juice finds near term support at the January 7th reaction low of 77 cents. Further support is at the major daily Fibonacci .618 retracement at 74.95. A clean break below 75 cents could squeeze more longs out of the market and take it down to the weekly November low of 69.20. Near term resistance is at last week's high of 85.30 (March OJ has made lower weekly highs for three consecutive weeks). A rally above it could allow the market to rally to the current intermediate daily Fibonacci .618 retracement at 84.45. If the market can make it past here look for it to challenge the December high of 89 cents. A break out above this high could send March OJ to the contract high of 93.50. Open Interest is at the lowest level since Thanksgiving. Seasonally, OJ should rally sharply in January. Commercial are now the least bearish in six months. Large traders are holding the smallest net long position since July. Small traders are the least bullish since September of 2003.
March cotton finds near term resistance between last week's two and a half month high of 47.30 in confluence with the intermediate daily Fibonacci .382 retracement at 47.37. A break out above this level should take the market right up to the October high of 50.50 followed closely by the current intermediate daily Fibonacci .618 retracement at 50.85. Further resistance is at the September high of 56.50. Near term support is at last week's low of 45.62. (March cotton has made higher weekly highs and higher weekly lows for the last two weeks). A break below it may cause March cotton to quickly unravel and send it back down to the contract low of 41.72. A break to new contract lows could send March cotton to the October 2002 reaction low of 40.50 and the major monthly Fibonacci .786 retracement at 40.31. A close below 40 cents could smash the cotton market to the 2002 low of 31.47 or the 2001 all-time low of 28.20. Open Interest is at a nine month high. The %R overbought/oversold indicator shows that cotton is nearing overbought on the daily chart. Cotton has a seasonal tendency to trade in a choppy fashion with a lower bias in January. Commercials are now holding the biggest net short cotton position in ten months. Large traders (hedge funds) are now net long for the first time since last March. Small traders are holding the biggest net long cotton position in a year.
Disclaimer: There is risk of loss in all commodity trading. The data contained are believed to be reliable, but have not been independently verified by Pearce Financial. Accordingly, such data cannot be guaranteed as to reliability, accuracy, or completeness, and as such are subject to change without notice. Pearce Financial will not be responsible for any indirect, compensatory, or consequential damages, including loss of profits which may result from reliance on this data. Pearce Financial and/or its Principals and employees may or may not follow strictly any or all of the trading recommendations contained herein. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.
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