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Weekly Market Watch
The
Future is in Futures
by Pearce
Financial, LLC
February 28 - March
4, 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 resistance between the February high of
1213.40 and the contract high of 1220.50. A break out to new highs
should take the market to the major monthly Fibonacci .618 retracement
at 1265.90. Further resistance is at the psychological 1300 area. Near
term support is at last week's low of 1184.00 (the S&P 500 has made
higher weekly lows for three out of the last four weeks) and the 18-day
Moving Average that it has only closed below once in the last month. A
drop below this near term support could indicate that the run is over
for now and take the market down to the current intermediate daily
Fibonacci .618 retracement at 1183.20 in confluence with the current
February low of 1181.30. A break below this price zone should allow the
S&P 500 to slip down to the January low of 1164.50 and the major
daily Fibonacci .382 retracement at 1160.10. Further support is at the
major daily Fibonacci .618 retracement at 1122.80 in confluence with the
monthly 18-bar Moving Average at 1122.80. This would be an ideal level
to look for buy set ups. The S&P 500 has not closed below the
monthly 18-bar Moving Average in nearly two years. Open Interest is
flat. The %R overbought/oversold indicator shows that the S&P 500 is
overbought on the daily, weekly, and monthly charts. Seasonally, the
S&P 500 should gain strength in March. Commercials
are holding the smallest net short position in three months. Large
traders (hedge funds) are still holding the biggest net short position
since mid-August. Small traders are still holding a large net long
position.
The March NASDAQ 100 find near term support between last week's low of 1491.00 and the January low of 1484.00. This price zone is closely followed by the monthly 18-bar Moving Average at 1466.00. (The NASDAQ 100 has not closed below the monthly 18-bar Moving Average since April of 2003). Further support is at the major daily Fibonacci .618 retracement at 1441.40. If the market does not stabilize here it could plunge to the major weekly Fibonacci .382 retracement at 1318.80 or even last year's low of 1302.00. Near term resistance is at the February high of 1565.00. Further resistance is at the daily Fibonacci .618 retracement at 1583.50. If the rally does not end here look for a run to the contract high of 1645.00. A break out to new contract highs could send the NASDAQ 100 right to the December 2001 high of 1738.00. Open Interest is at a two month high. The NASDAQ 100 should be in a choppy trading range in March. Commercial interests are holding the biggest net short position in nearly seventeen months. Large traders are holding the biggest net short position in eleven months. Small traders increased the size of their record size net long position.
Interest rates - March T-bonds find near term support at last week's low of 112-25. A drop below it could knock another point off of the market and take it to the major daily Fibonacci .618 retracement at 111-20. Further support is at the daily contract low of 108-16 in confluence with the major weekly Fibonacci .618 retracement at 108-17. Near term resistance is at the current daily Fibonacci .618 retracement at 115-06. A rally above it could take June T-bonds up to the contract high of 116-21. A break out to new highs could allow June T-bonds to test the weekly February high of 117-12 or last year's weekly high of 117-26. Further resistance is at the major weekly Fibonacci .786 retracement at 119-24. The June NOB spread (T-notes vs. T-bonds) finds near term resistance at the all-time high of 4-02 premium T-bonds. Further resistance is at the psychological 5-00 mark. Near term daily support is at the psychological level of 2-00 premium T-bonds. Further support is the psychological level of 1-00 premium T-bonds. If the decline does not stop here expect the spread to hit even money. Open Interest is still near the record high. T-bonds have a seasonal tendency to decline in March. Commercial interests are holding the largest net long position since last summer. Large traders dumped a lot of their large net long position to move back to a neutral bias. Small traders are the least bearish in three months.
March T-notes find near term support between last week's one and a half month low of 110-07 and the January low of 110-03. Further support is at the major daily Fibonacci .382 retracement at 109-07 in confluence with the intermediate weekly Fibonacci .786 retracement at 109-065. Further support is at the major daily Fibonacci .618 retracement at 107-065. Near term resistance is at the current daily Fibonacci .618 retracement at 111-20. A rally above it could take June T-notes to the contract high of 112-16. A break out to new highs should send this market up to the weekly February high of 113-125. Further resistance is at the weekly September high of 114-12. If the market can clear this high look for a rally to the intermediate weekly Fibonacci .786 retracement at 115-255 or even the major weekly Fibonacci .618 retracement at 116-005. Open Interest hit a new all-time high again. T-notes have a seasonal tendency to drop sharply in March. Commercials are neutral to slightly bullish. Large traders (hedge funds) are holding the biggest net long short position since Thanksgiving. Small traders increased the size of their record net short position.
International bonds - March Canadian 10-year bonds find near term support at last week's one month low of 112.18. A clean break below it could slam dunk this market to the January low near 111.40 (Canadian bonds have made higher monthly highs and higher monthly lows for seven consecutive months) or the late December reaction low of 111.20. If the market does not stabilize in this area it should quickly test the December low of 110.60. Near term resistance is found at the current major daily Fibonacci .618 retracement at 113.17 and followed closely by last week's high of 113.22. Further resistance is at the contract high of 113.78. After that look for the market to tag the 114 mark. March Euro bunds find near term support between last week's multi-week low of 118.22 and the late December low of 118.11. Further support is at the intermediate weekly Fibonacci .382 retracement at 117.24. Near term resistance is at the current major daily Fibonacci .618 retracement at 119.93. Further resistance is at the all-time high of 120.98. March London long gilts find near term support at last week's multi-month low of 109.21. A drop below it should take the market to the major daily Fibonacci .618 retracement at 108.48 in confluence with the daily October low of 108.45. Near term resistance is at the current major daily Fibonacci .618 retracement at 111.34. A break out above it could allow the market to challenge the current February high of 112.48 or the contract high of 112.65. A break out to new contract highs could clear the way for gilts to run to the psychological 115 mark. March Australian 10-year bonds find near term support at last week's new contract low of 94.435. A break below this low could really push the Aussie bonds "down under" to the major weekly Fibonacci .618 retracement at 94.25. Near term resistance is at last week's high of 94.58. (March Aussie bonds have made lower weekly highs for five out of the last six weeks). A rally above it could allow the market to try for the current February high of 94.75. Further resistance is at the January high of 94.805. After that look for the market to hit the contract high of 94.875 in confluence with the weekly 2004 high at 94.89. March JGB's (Japanese gov't. bonds) find near term support at the current February low of 138.25 in confluence with the late December reaction low of 138.21. Further support is at the major weekly Fibonacci .382 retracement at 137.36. Near term resistance is at last week's high of 138.91. A break out above it may allow the market to run back up to the contract high of 139.96. Further resistance is at the weekly 2004 high near 140.50.
Currencies - The US dollar index finds near term support clustered between last week's multi-week low of 82.38, the daily Fibonacci .618 retracement at 82.38, and the January 12th reaction low of 82.05. Further support is at another technical support zone between the contract low of 80.48 and the 1995 low of 80.14. Near term resistance at the current intermediate daily Fibonacci .618 retracement at 84.28. A rally above it may allow the market to test the major daily Fibonacci .382 retracement at 85.40 in confluence with the current February high of 85.46. Further resistance is clustered between the monthly 18-bar Moving Average at 87.61 (the US dollar index has not closed above the monthly 18-bar Moving Average in nearly three years), the intermediate weekly Fibonacci .618 retracement at 87.91 (as measured between last year's weekly high of 92.50 and last year's weekly low of 80.48) and the major daily Fibonacci .618 retracement at 88.43. Open Interest is at a six week high. The %R overbought/oversold indicator shows that the greenback is oversold on the monthly chart. The Seasonal index shows that the dollar should move sharply higher in March. Commercial interests turned net long again when the buck declined last week. Large traders increased the size of their small net short position. Small traders are neutral.
The March Canadian dollar finds near term resistance at the major daily Fibonacci .382 retracement at .8167 in confluence with last week's high of .8172. Further resistance is at the daily Fibonacci .618 retracement at .8304 or even the January high of .8370. Near term support is at the current February low of .7945. A break below it could cause the "looney" to dive to the major daily Fibonacci .618 retracement at .7656. Open Interest is at the highest level since mid-December. Seasonally, the Canadian dollar has a tendency to move sideways in March. Commercial interests are the least bearish since the end of June. Large traders are the most bearish since then. Small traders are still neutral.
The March Australian dollar finds near term resistance between last week's new contract high of .7945 and the weekly 2004 high of .7980. A strong break out above 80 cents could allow the market to make a run for the 1996 high of .8210. Near term support is at last week's low of .7799 (the March Australian dollar has made higher weekly lows for four out of the last five weeks) and the 18-day Moving Average that it has closed below only once in the last month and a half. A break below this near term support could signal a trend change and take the market down to the current intermediate daily Fibonacci .618 retracement at .7601 in confluence with the February low of .7591. A break below this price level could knock another penny off of the Aussie and take it to last month's low of .7475. (The Aussie dollar has only broken a previous monthly low once in the last seven months). If this low is broken the market could quickly visit the current major daily Fibonacci .382 retracement at .7493. Open Interest is at the highest level since mid-December. The %R overbought/oversold indicator shows that the Aussie is overbought on the daily, weekly, and monthly charts. Commercials increased the size of their record net short position. Large traders (hedge funds) increased the size of their record net long position. Small traders also increased the size of their record net long position.
The March Canadian dollar/Australian dollar spread finds near term support at last week's new multi-month low of .0198 (about two cents) premium Canadian dollar. Further support is at the major weekly Fibonacci .618 retracement at .0148 (about one and a half cents). Near term resistance is at the current major daily Fibonacci .382 retracement at .0499 (about five cents) premium Canadian dollar. Further resistance is found at the January high of .0694 (about seven cents) premium Canadian dollar in confluence with the current major daily Fibonacci .618 retracement at .0685 (about seven cents) premium Canadian dollar. If the rally does not end here the spread could make it to the current major daily Fibonacci .786 retracement at .0817 (just over eight cents) premium Canadian dollar or even the November high of .0878 (about eight and three-quarter cents) premium Canadian dollar.
The March British pound finds near term resistance at last week's nearly two month high of 1.9179. Further resistance is at the contract high of 1.9446 or the weekly December high of 1.9500. Near term support is at the current daily Fibonacci .382 retracement at 1.8903 in confluence with last week's low of 1.8885. (The March British pound has only broken a previous week's low once in the last five weeks). A break below it could send the market back down to the February low of 1.8456. If this low is broken sterling could plummet to the monthly 18-bar Moving Average at 1.8106 (sterling has not closed below the monthly 18-bar Moving Average in nearly three years) or the major daily Fibonacci .618 retracement at 1.8020. Open Interest is flat. The %R overbought/oversold indicator shows that sterling is overbought on the daily and monthly charts. The pound has a seasonal tendency to drop in the first week of March and then move sideways for the rest of the month. Commercials aggressively increased the size of their big net short position last week. Large traders (hedge funds) increased the size of their net long position. Small traders are neutral to bullish.
The March Swiss franc cleared the major daily Fibonacci .618 retracement last week. A rally above last week's multi-week high of .8647 could send the market right on up to the major daily Fibonacci .786 retracement at .8737. If the rally does not end here the market may be poised to test the contract high of .8892. Near term support is at the current daily Fibonacci .618 retracement at .8352. Further support is located between the February low of .8169 and the major daily Fibonacci .618 retracement at .8131. A break below this price zone could slam the Swissie to the psychological 80 cent mark. Open Interest is flat. The %R overbought/oversold indicator shows that the Swissie is overbought on the daily and monthly charts. The Seasonal index shows that the Swiss franc usually declines in March. Commercial interests are neutral to bullish. Large traders are neutral. Small traders are neutral as well.
The March Euro currency finds near term resistance at last week's multi-week high of 1.3277. Further resistance is at the January 12th reaction high of 1.3303 in confluence with the current major daily Fibonacci .618 retracement at 1.3323. A break out above this level should allow the Euro to make a run for the major daily Fibonacci .786 retracement at 1.3483. Near term support is at the current daily Fibonacci .618 retracement at 1.2942. Further support is clustered at the February 7th, 8th, 9th, and 10th lows of 1.2735, 1.2738, 1.2743, and 1.2742. A break below this support zone could smash the Euro to the major daily Fibonacci .618 retracement at 1.2490 or even the monthly 18-bar Moving Average at 1.2419. (The Euro has not closed below the monthly 18-bar Moving Average since the summer of 2002). Open Interest is flat. The %R overbought/oversold indicator shows that the Euro is overbought on the daily and monthly charts. Seasonally, the Euro should rally in the first week of March and then drop substantially for the rest of the month.
The March Japanese yen broke a previous week's high for the first time in six weeks. Near term resistance is found between last week's high of .009644 and the current major daily Fibonacci .618 retracement at .009690. Further resistance is at the January high of .009864 or the contract high of .009885. If the March yen hits a new contract high look for it to challenge the 2000 weekly high of .009974 in confluence with the late 1999 high of .009990. Near term support is at last week's low of .009466. A break below it could let the market slip back down to the February low of .009375. Further support is at the major daily Fibonacci .618 retracement at .009254. If the yen does not stabilize here it could hit the psychological .009000 mark. Open Interest is flat. The yen has a seasonal tendency to rally in the first week of March and then decline for the rest of the month. Commercial interests are holding their largest net long position in four and a half months. Large traders are holding the biggest net short position in nearly a year. Small traders are the least bullish since early October.
Metals - April gold finds near term resistance at last week's multi-week high of $438.20. A rally above it should take the market directly to the major daily Fibonacci .618 retracement at $441.70. Further resistance is at the late December high of $449.00 in confluence with the major daily Fibonacci .786 retracement at $449.90. Near term support is at the current intermediate daily Fibonacci .618 retracement at $421.70. A drop below it could send gold to the February low of $411.50, the major daily Fibonacci .618 retracement at $410.70, and the monthly 18-bar Moving Average at $409.40. (Gold has not closed below the monthly 18-bar Moving Average since July of 2001). A clean break below this support zone could allow gold to free fall to the major monthly Fibonacci .382 retracement at $378.30 or even last year's monthly low of $372.00. Open Interest is at a six week high. The %R overbought/oversold indicator shows that gold is overbought on the daily chart. The Seasonal index shows that gold should decline sharply until the end of March. Commercials are holding the smallest net short position since August of 2002. Large traders (hedge funds) are holding the smallest net long position since September of 2002. Small traders are neutral.
May silver tested resistance at the daily Fibonacci .618 retracement last week. A rally above last week's two and a half month high of $7.61 should send silver to the daily Fibonacci .786 retracement at $7.88 and fill the huge gap on the daily chart between $7.40 and $7.91. Further resistance is at the contract high of $8.28. Near term support is at the current major daily Fibonacci .382 retracement at $7.15. Further support is at the current major daily Fibonacci .618 retracement at $6.865. If the decline does not end here May silver could test the February low of $6.52 in confluence with the monthly 18-bar Moving Average at $6.48. (Silver has not closed below the monthly 18-bar Moving Average since June 2003). A break below this support zone could pressure the market to visit the intermediate weekly Fibonacci .786 retracement at $6.085 in confluence with the weekly September low of $6.065. Open Interest is at a two and a half month high. The %R overbought/oversold indicator shows that silver is near overbought on the daily chart. Seasonally, silver should decline sharply until early April. Commercials are starting to increase the size of their net short position again. Large traders (hedge funds) are increasing the size of their net long position. Small traders are neutral.
May copper finds near term resistance at last week's new contract high 150.20. Further resistance is at last year's weekly high of 155.00. A rally above it could take May copper up to the 1988 multi-decade high of 160.65. Near term support is at last week's low of 144.40. (Copper has only broken a previous week's low once in the last seven weeks). A drop below it could take the market to the current intermediate daily Fibonacci .382 retracement at 137.50. Further support is found between the current intermediate daily Fibonacci .618 retracement at 129.70 and the January low of 129.50. Open Interest is at a new all-time high. The %R overbought/oversold indicator shows that copper is overbought on the daily and monthly charts. Copper has a seasonal tendency to move higher in March and establish an important seasonal high at the end of the month. Commercials are neutral. Large traders (hedge funds) are neutral. Small traders remain neutral.
Energies - April crude oil finds near term resistance clustered between last week's four month high of $52.05, the major weekly Fibonacci .786 retracement at $52.35, and the daily contract high of $53.00. If this resistance area is broken crude oil could be on it's way to last year's all-time high of $55.65. Near term support is found at the current major daily Fibonacci .382 retracement at $47.91. Further support is at the current major daily Fibonacci .618 retracement at $45.34 in confluence with the February low of $45.27. A break below it could send the market down to the daily December low of $41.20. Open Interest is at a new all-time high. The %R overbought/oversold indicator shows that crude oil is overbought on the daily chart. The Seasonal index shows that crude oil should move slightly higher in March. Commercial interests more than tripled the size of their net short position from the previous week to become the most bearish since Memorial Day. Large traders substantially increased the size of their net long position from the previous week to become the most bullish since Memorial Day. Small traders are still bearish.
April Unleaded Gas finds near term resistance at last week's four month high of 144.80. If the market can clear this high it could accelerate the bull run to the contract high of 151.20. Near term support is at last week's low of 138.50. A break below it could set the market right back at the February low of 129.70 or even the major daily Fibonacci .618 retracement at 127.81. Further support is at the major daily Fibonacci .786 retracement at 123.19. Open Interest is near the all-time high. Seasonally, gasoline should rally sharply in March. Commercials interests are holding the biggest net short position since late October. Large traders are holding the biggest net long position since early October. Small traders are neutral.
April natural gas finds near term resistance at last week's two month high of 6.730. Further resistance is at the major daily Fibonacci .618 retracement at 6.952. If the market can clear this resistance barrier it could rally as high as the late November reaction high of 7.250 in confluence with the major daily Fibonacci .786 retracement at 7.290. Near term support is at the February low of 5.950. Further support is at the contract low of 5.710. A break to new contract lows could send natural gas tumbling to the psychological 5.00 mark. Open Interest is at a two year high. The %R overbought/oversold indicator shows that natural gas is overbought on the daily chart. Natural gas has a seasonal tendency to decline until mid-March and then rally sharply in the second half of the month. Commercial interests are now the most bearish in two months. Large traders are now the least bearish in two months. Small traders remain neutral to bullish.
Meats - April live cattle finds near term support at last week's one and a half month low of 85.30. Further support is at the December low of 83.45. If this low is broken expect the market to keep moving toward the November low of 82.00. Near term resistance is at a daily chart gap between 86.80 and 87.17 in confluence with the current daily Fibonacci .382 retracement at 87.22. If the market can take out this resistance area it may try for the current daily Fibonacci .618 retracement at 88.40. Further resistance is at the February high of 89.62. After that April cattle may be ready to challenge the contract high of 90.30. If April cattle hits a new contract high it could go right on up to the weekly January high of 92.75 in confluence with the weekly December high at 92.95. Open Interest is at a two month low. The %R overbought/oversold indicator shows that cattle oversold on the daily chart. The Seasonal index shows that cattle should trade in a choppy range in March. Commercials are neutral to bullish. Large traders (hedge funds) liquidated some of their large net long position. Small traders are still holding the biggest net short position in over four years.
May feeders finds near term support at last week's multi-week low of 96.02. Further support is at the contract low of 94.15. Near term resistance is at last week's high of 97.65. (May feeders have only broken a previous week's high once in the last four weeks). Further resistance is at the current intermediate daily Fibonacci .618 retracement at 98.90. If the market does not back down from this level it may visit the January high of 100.70. If this high is exceeded look for the market to test the major daily Fibonacci .786 retracement at 102.05. Open Interest is at a five year high. The %R overbought/oversold indicator shows that feeders are oversold on the daily and weekly charts. Seasonally, feeders should move sharply lower in March. Commercial interests are holding a historically large net long position. Large traders are holding the biggest net long position since late June. Small traders increased the size of their biggest net short position since October of 2003.
April lean hogs signaled a trend change last week when they took out a previous week's high for the first time in five weeks and also closed back above the 18-day Moving Average for the first time in a month. Near term resistance is found between last week's high of 75.85 in confluence with the daily Fibonacci .618 retracement at 75.95. Further resistance is at the contract high of 78.60. A break out to new contract highs could send April hogs right to the 2004 weekly high of 82.70. Near term support is at the February low of 71.65. A break below it squash this market to the major daily Fibonacci .382 retracement at 68.97 in confluence with the December low of 68.70. Open Interest is flat. The %R overbought/oversold indicator shows that hogs are near overbought on the monthly chart. Hogs have a seasonal tendency to rally thru most of March and then drop sharply in the last week of the month. Commercials are holding their biggest net long position in just over a year. Large traders (hedge funds) are holding the smallest net long position in eleven months. Small traders are holding a very large short position.
Grains - May soybeans exploded to a five and a half month high last week and took out the intermediate daily Fibonacci .618 retracement. Near term resistance is located at last week's high of $6.06. Further resistance is at the intermediate daily Fibonacci .786 retracement at $6.244. Near term support is at the current major daily Fibonacci .382 retracement at $5.656 in confluence with last week's low of $5.632. (May soybeans have made higher weekly highs and higher weekly lows for three consecutive weeks). A drop below it could cause a quick pullback to the current daily Fibonacci .618 retracement at $5.41. If the market does not stabilize here it may test the contract low of $5.01. A break below it could smash soybeans and send it the 2002 low of $4.154 or the 1999 multi-decade low of $4.014. Open Interest is flat at an eleven month high. The %R overbought/oversold indicator shows that beans are overbought on the daily chart. The Seasonal index shows that soybeans usually rally sharply in March. Commercial interests are still holding a humongous size net long position. Large traders are holding a large net short position but they are the least bearish in three months. Small traders are the most bearish since October.
March soy meal finds near term resistance at last week's five and a half month high of $180.50. Further resistance is at the major daily Fibonacci .382 retracement at $184.60. Near term support is at the current daily Fibonacci .382 retracement at $168.50. A break below it should take the market to the current daily Fibonacci .618 retracement at $161.20. If the market does not stabilize here look for a decline to the contract low of $149.20 or the weekly 2002 low of $145.40. Further support may not be found again until the 1999 multi-year low of $120.30. Open Interest is at a six week low. The %R overbought/oversold indicator shows that meal is overbought on the daily chart. Seasonally, soy meal should move higher in March. Commercials dumped their record net long position and are now the most net short that they have been since the end of August. Large traders (hedge funds) covered all of their record net short position and turned net long for the first time since the first week of August. Small traders remain very bearish.
May bean oil finds near term resistance between last week's five month high of 22.82 and the major daily Fibonacci .618 retracement at 22.96. Further resistance is at the major daily Fibonacci .786 retracement at 24.03. Near term support is at last week's low of 20.55 (bean oil has made higher weekly highs and higher weekly lows for three consecutive weeks) in confluence with the current daily Fibonacci .618 retracement at 20.47. If the market drops below this level it may test the contract low of 19.01 or even the major weekly Fibonacci .786 retracement at 18.81. Further support is at the psychological 18 cent mark. Open Interest is at a six week low. The %R overbought/oversold indicator shows that bean oil is overbought on the daily chart. Bean oil has a seasonal tendency to rally sharply in March. Commercial interests are now holding the smallest net long position in two months. Large traders are now holding the smallest net short position since then. Small traders are the most bullish in three months.
May corn finds near term resistance clustered between last week's three month and a half high of $2.23, the November high of $2.26, and the October high of $2.266. Further resistance is at the major daily Fibonacci .618 retracement at $2.364. Near term support is at last week's low of $2.102 in confluence with the current daily Fibonacci .618 retracement at $2.10. A drop below it could allow the market to test the contract low of $2.02. A break to new lows could encourage May corn to visit the 2002 weekly low of $1.914. Further support is at the 2001 low of $1.84. Open Interest is at a one month low. The %R overbought/oversold indicator shows that corn is nearing overbought on the daily chart. The Seasonal index shows that corn should move higher in March. Commercials are still holding a sizable net long position but they are the least bullish since Thanksgiving. Large traders (hedge funds) are still holding a large net short position but they are the least bearish in four months. Small traders remain very bearish.
May rice finds near term support at last week's new contract low of 6.34. Further support is at the psychological 6.00 mark. Near term resistance is at the current major daily Fibonacci .382 retracement at 6.98. Further resistance is at the current major daily Fibonacci .618 retracement at 7.375 followed by the January high of 7.51. Open Interest is at the highest level since mid-October. The %R overbought/oversold indicator shows that rice is oversold on the daily and weekly charts. Seasonally, rice should decline in March. Commercial interests are the most bullish in three months. Large traders (hedge funds) are the most bearish in nearly three months. Small traders are neutral to bullish.
May oats find near term support at last week's new contract low of $1.464. Further support is at the major weekly Fibonacci .618 retracement at $1.412. After that the market could tag the weekly October low of $1.362. Near term resistance is at last week's high of $1.554 in confluence with the current major daily Fibonacci .618 retracement at $1.56. Further resistance is at the February high of $1.616. A break out above this high should could allow oats to challenge this year's current weekly high of $1.73 or the weekly December high of $1.75. Open Interest is at a one month low. Oats have a seasonal tendency to move sideways in March. Commercials are neutral to bearish on oats. Large traders (hedge funds) sold are neutral to bullish. Small traders remain neutral.
May wheat finds near term resistance at last week's three month high of $3.34. A rally above could allow the market to hit the November and October highs of $3.374 and $3.404. This is closely followed by the current minor daily Fibonacci .786 retracement at $3.424. Near term support is at the current daily Fibonacci .618 retracement at $3.096 followed by last week's low of $3.06. A break below it could allow the market to challenge the double bottom at the contract low of $2.95. If May wheat breaks down to new lows it could quickly drop to last year's weekly low of $2.824. Further support is at the monthly 2003 low of $2.73 followed by the major monthly Fibonacci .786 retracement at $2.676. Open Interest is starting to pull back from the all-time high. The %R overbought/oversold indicator shows that wheat is nearing overbought on the daily chart. The Seasonal index shows that wheat should drop sharply in March. Commercial interests dumped more than half of their record size net long position from the previous week to become the least bullish in five months. Large traders covered more than half of their record net short position from the previous week to become the least bearish since mid-September. Small traders are holding the largest net short position since July.
Softs - May coffee finds near term resistance between last week's new contract high of 126.60 and the 2000 high of 126.00. A break out above this high should clear the path for coffee to run to the 1999 high of 145.00 in confluence with the major monthly Fibonacci .382 retracement at 147.10. Near term support is at last week's low of 116.25 (coffee has made higher weekly lows for six consecutive weeks) and the 18-day Moving Average that it has not closed below for a month and a half. A break below this near term support could be a good clue that the bull run is temporarily over. If this happens look for coffee to spill to the current major daily Fibonacci .382 retracement at 106.25 or the February low of 105.75. (Coffee has made higher monthly lows for six consecutive months). Further support is at the January low of 97.40. If the market does not stabilize here look for a further decline to the current major daily Fibonacci .618 retracement at 93.65. Open Interest is very high. The %R overbought/oversold indicator shows that coffee is overbought on the daily, weekly, and monthly charts. Seasonally, coffee should rally in the first week of March and then move sideways for the rest of the month. Commercials are holding a record net short position. Large traders (hedge funds) are holding a record net long position. Small traders are neutral.
May cocoa finds near term resistance at last week's two month high of $1,663. Further resistance is at the major daily Fibonacci .618 retracement at $1,680. If the rally does not end here the market could be on it's way to the December high of $1,723 or the daily Fibonacci .786 retracement at $1,736. Near term support is found between last week's low of $1,590 (cocoa has made higher weekly lows for six consecutive weeks), the 18-day Moving Average that it has closed above most of the time over the last month, and the current daily Fibonacci .382 retracement at $1,590. Further support is at the current daily Fibonacci .618 retracement at $1,545 in confluence with the February low of $1,540. A break below this level could cause a slide to the January low of $1,472. Further support for May cocoa is at the October low of $1,423. Open Interest is at a six week high. The %R overbought/oversold indicator shows that cocoa is overbought on the daily chart. Cocoa has a seasonal tendency to rally sharply in March and establish an important seasonal high at the end of the month. Commercial interests are holding the largest net short position in three months. Large traders are holding the largest net long position in three months. Small traders are holding a large net long position.
May sugar finds near term support at the major daily Fibonacci .382 retracement at 9.02 in confluence with last week's one month low of 8.96. A break below nine cents could send sugar to the January low of 8.85. Further support is at the December low of 8.69 in confluence with the major daily Fibonacci .618 retracement at 8.67. Near term resistance is at last week's high of 9.40. A rally above it could send the market right up to the contract high of 9.58. After that the market could quickly hit the intermediate weekly Fibonacci .786 retracement at 10.02. A strong close above ten cents could catapult sugar to the 2000 high of 11.40 in confluence with the major monthly Fibonacci .618 retracement at 11.45. Open Interest is at a one month low. The Seasonal index shows that sugar should decline in March. Commercials are holding a record size net short position. Large traders (hedge funds) are holding a record size net long position. Small traders are also holding a record size net long position.
May orange juice finds near term resistance at the current February high of 86.75. Further resistance is at the December high of 89 cents. A break out above this high could send the market up to the contract high of 93.50. Near term support is at last week's low of 82.70. (March OJ has only broken a previous week's low once in the last six weeks). A break below it could cause a sell off to the January low of 77 cents in confluence with the December low of 76.90. (March OJ has made higher monthly lows for four out of the last five months). If these lows are broken OJ could go right to the major daily Fibonacci .618 retracement at 74.95. Further support is at the weekly November low of 69.20. Open Interest is dropping. Seasonally, OJ should drop sharply in February. Commercial are the least bearish since mid-June. Large traders are holding the smallest net long position since the beginning of July. Small traders are the least bullish since September of 2003.
May cotton finds near term resistance at last week's four month high of 50.20. Further resistance is at the major daily Fibonacci .618 retracement at 51.28 in confluence with the October high of 51.45. If the market can make it past this price it may be headed to the major daily Fibonacci .786 retracement at 53.89. Near term support is at last week's low of 47.80. (Cotton has only broken a previous week's low once in the last four weeks). A drop below it could allow the market to hit the current major daily Fibonacci .618 retracement at 44.95. Further support is located between the February low of 44 cents and the January low of 43.62. If these lows are broken it would not be difficult for May cotton to test the contract low of 41.71. If May cotton hits a new contract low it should head right to the October 2002 reaction low of 40.50 in confluence with the major monthly Fibonacci .786 retracement at 40.31. A clean break below 40 cents could smash this market to the 2002 low of 31.47 or the 2001 all-time low of 28.20. Open Interest is at the highest level since October of 2003. The %R overbought/oversold indicator shows that cotton is overbought on the daily chart. Cotton has a seasonal tendency to rally thru most of March and establish an important seasonal high at the end of the month. Commercials are bearish. Large traders (hedge funds) are very bullish. Small traders are neutral.
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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