The September NASDAQ 100 spent three weeks trading both sides of support at a weekly Fibonacci .618 retracement (as measured between the weekly 2004 low of 1302.00 and this year's current multi-year high of 1774.00) and ended the third week closing almost on the high for the week and above the previous week's high. Any follow thru above the July 31st reaction high of 1526.50 could indicate that the market is ready to bounce and test the psychological 1600 level that it spent eight weeks trading around between mid-May and early June. Further resistance is at the current major weekly Fibonacci .618 retracement at 1653.30 (as measured between this year's current weekly high of 1774.00 and the weekly all-session July low of 1458.00). If the rally does not stop here the market could take on the weekly April high of 1766.00 or the weekly January high of 1774.00. The September NASDAQ 100 finds near term support at the contract low of 1458.00. Further support is at the current major monthly Fibonacci .382 retracement at 1400.80 (as measured between the 2002 monthly low of 797.00 and this year's current multi-year weekly high of 1774.00) in confluence with last year's weekly low of 1397.00. After that the market could decline to the 2004 weekly low of 1302.00. Open Interest is flat. The %R overbought/oversold indicator shows that the NASDAQ 100 is sitting near oversold on the daily and weekly charts. The NASDAQ 100 should be flat for the first half of August and then rally for the remainder of the month. Commercial interests are now holding their smallest net long position in five weeks. Large traders (hedge funds) are still holding the biggest net short position since October. Small traders are holding the smallest net short position in four months.

Interest rates - September T-bonds are sending a lot of technical signals that would suggest that an important low has been established. But first, let's step back and look at the big picture for a moment. For the last two and a half decades, T-bonds have been in an upward channel consisting of higher highs and higher lows on the quarterly chart. The pattern has been pretty consistent: After peaking out in the second quarter of 1980, the market declined and bottomed out five quarters later. From there it rallied in an "A,B,C" pattern to a new multi-year high in 1986. Once again the market declined and it bottomed out six quarters later. From the 1987 low it rallied in an "A,B,C" pattern to a new multi-year high in 1993. Again the market declined from this high and bottomed out five quarters later. From the 1994 low it rallied in an "A,B,C" pattern to a new multi-year high in 1998. From the 1998 high T-bonds declined and bottomed out five quarters later. From the 2000 low it rallied in an "A,B,C" pattern to a new multi-year high in 2003. T-bonds then declined for four quarters and bottomed out in the second quarter of 2004. This was a quarter earlier than we expected but it's close enough to fit historical behavior patterns. Along the way, the market never broke below the previous major lows that were established after the five or six quarter sell-off and the market never broke below the corrective "B" wave lows of the following "A,B,C" leg to new highs. So where is the market now? Well, according to it's previous behavior the T-bond market should be ending the corrective "B" wave and about ready to start the impulsive "C" wave to new all-time highs! The 2004 low of 103-02 should have been the major swing low that started the "A" wave of the "A,B,C" pattern. The 2005 high of 119-30 should have been the end of the "A" wave and the beginning of the corrective "B" wave. It is quite possible that the corrective "B" wave ended and the impulsive "C" wave is beginning off of the 2006 second quarter low of 105-11. Of the previous four "A,B,C" patterns in the bull market, the corrective "B" wave retraced the "A" wave by a minimum of 57% and a maximum of 83%. Currently, T-bonds have retraced just over 86% of the "A" wave rally between the 2004 low of 103-02 and the 2005 high of 119-30. Of the preceding four "A,B,C" patterns in the bull market, the impulsive "C" waves have been bigger than the "A" waves each time. Therefore, since the current wave that we are labeling "A" was a length of 16-28 we would project that a "C" wave rally starting off of the 2006 second quarter low of 105-11 would take the T-bond market past 122-07 and quite possibly exceed the 2003 all-time high of 124-10. Price action on the shorter-term charts suggest that T-bonds have finished declining as well. On the weekly chart, a double bottom has been formed between the May low of 105-11 and the June low of 105-12. The week of July 17th was an outside reversal up on the weekly chart. Also, the market closed back above the weekly 18-bar Moving Average for the first time since late January. A rally above last week's high of 108-15 and the June high of 108-15 could send T-bonds up to a major weekly Fibonacci .382 retracement at 110-29 (as measured between last year's weekly high of 119-30 and this year's current weekly low of 105-11). Further resistance is at a major weekly Fibonacci .618 retracement at 114-12 (as measured between last year's weekly high of 119-30 and this year's current weekly low of 105-11). Near term support is at last week's low of 107-07 (September T-bonds have made higher weekly lows for three out of the last four weeks and higher weekly highs for four consecutive weeks) and the 18-day Moving Average that it has not closed below for nearly a month. If this market breaks below a previous week's low and closes below the 18-day Moving Average it could decline to major technical support on the monthly chart at the May, June, and July lows of 105-11, 105-12, and 105-14. If the market decides to take out these lows it could quickly hit the 2004 low of 103-02 or even a major monthly Fibonacci .618 retracement at 102-16 (as measured between the monthly 2000 low of 89-01 and the 2003 all-time high of 124-10). Further support is at the psychological 100 level. The September NOB spread (T-notes vs. T-bonds) finds near term support at the late June low of 1-12 premium T-bonds in confluence with the current daily Fibonacci .618 retracement at 1-125 premium T-bonds. Further support is at the contract low of 26/32nds premium T-bonds. If the spread hits a new low look for it to hit the psychological even money level. After that the spread could flip and drop to the current major weekly Fibonacci .618 retracement at 1-165 premium T-notes (as measured between the weekly 2005 high at 5-03 premium T-bonds and the weekly 2003 low of 5-20 premium T-notes). Near term daily resistance is clustered between the July 20th high of 2-09 premium T-bonds, the June high at 2-11 premium T-bonds, the current major daily Fibonacci .382 retracement at 2-16 premium T-bonds (as measured between the daily January high at 5-07 premium T-bonds and the current contract low of 26/32nds premium T-bonds), and the current intermediate daily Fibonacci .618 retracement at 2-195 premium T-bonds (as measured between the March 24th reaction high at 3-23 premium T-bonds and the current contract low of 26/32nds premium T-bonds). Further resistance is at the current major daily Fibonacci .618 retracement at 3-17 premium T-bonds (as measured between the daily January high at 5-07 premium T-bonds and the current contract low of 26/32nds premium T-bonds) in confluence with the March 24th reaction high at 3-23 premium T-bonds. Open Interest quietly reached a two month high. The %R overbought/oversold indicator shows that T-bonds are overbought on the daily chart. T-bonds have a seasonal tendency to rally for the first half of August and then move sideways for the rest of the month. Commercial interests are holding the smallest net long position since late February. Large traders are holding the smallest net short position since then. Small traders are holding the same size net short position for several months.

September T-notes find near term resistance between last week's high of 106-02 and the weekly June high of 106-065. This is followed closely by the current minor weekly Fibonacci .618 retracement at 106-13 (as measured between this year's current weekly high of 110-065 and this year's current weekly low of 104-015). If the market can clear these hurdles it could rally to the current minor weekly Fibonacci .618 retracement at 107-27 (as measured between this year's current weekly high of 110-065 and this year's current weekly low of 104-015) followed closely by the current intermediate weekly Fibonacci .382 retracement at 108-01 (as measured between last year's weekly high of 114-16 and this year's current weekly low of 104-015). Further resistance is at this year's current high on the weekly chart at 110-065 followed closely by the current intermediate weekly Fibonacci .618 retracement at 110-16 (as measured between last year's weekly high of 114-16 and this year's current weekly low of 104-015). Near term support is at last week's low of 105-09 (September T-notes have made higher weekly lows for three out of the last four weeks and higher weekly highs for four consecutive weeks) and the 18-day Moving Average that it has not closed below for nearly a month. If this market breaks below a previous week's low and closes below the 18-day Moving Average it could decline to the June low of 104-01. If the market hits new lows it could drop to the 2002 low of 101-295. Further support is at the psychological 100 mark. Open Interest is flat. The %R overbought/oversold indicator shows that T-notes are overbought on the daily chart and near oversold on the monthly chart. T-notes have a seasonal tendency to rally in August. Commercials are holding the largest net short position since February of 2003. Large traders (hedge funds) are holding the biggest net long position mid-April. Small traders are holding the smallest net short position since November.

International bonds - September Canadian 10-year bonds find near term support at last week's low of 111.66 (September Canadian 10-year bonds have made higher weekly lows for three out of the last four weeks and higher weekly highs for four consecutive weeks) and the 18-day Moving Average that it has not closed below for nearly a month. This is closely followed by the current daily Fibonacci .382 retracement at 111.60 (as measured between the June low of 109.68 and the August 1st high of 112.78). If this market breaks below a previous week's low and closes below the 18-day Moving Average it could test the July 19th reaction low of 110.88 in confluence with the current daily Fibonacci .618 retracement at 110.86 (as measured between the June low of 109.68 and the August 1st high of 112.78). Further support is located at the double bottom on the weekly chart between the June low of 109.68 and the April low of 109.72. A breach of this support should knock the market down to a major monthly Fibonacci .382 retracement at 109.15 (as measured between the 2000 monthly low of 95.20 and last year's all-time high of 117.78) or even the contract low of 109.00. If September Canadian 10-year bonds hit a new contract low expect a decline to the 2004 low of 106.12. Near term resistance is at the current major weekly Fibonacci .382 retracement at 112.77 (as measured between last year's all-time high of 117.78 and this year's current weekly low of 109.68) in confluence with the August 1st high of 112.78. If the market can take out this price barrier it could launch a rally to the current major weekly Fibonacci .618 retracement at 114.69 (as measured between last year's all-time high of 117.78 and this year's current weekly low of 109.68).  Sepember Euro bunds find near term support at last week's low of 116.03 (September Euro bunds have made higher weekly lows and higher weekly highs for three consecutive weeks). A break below it could allow the market to test support between the daily contract low of 114.65 and this year's current weekly low of 114.55. If the market does not stabilize here it could drop to the major monthly Fibonacci .618 retracement at 112.18 (as measured between the 2002 low of 104.50 and last year's all-time high of 124.60) or even the 2004 low of 111.81. Near term resistance is at last week's high of 116.87 followed by the June high of 117.26 (bunds have made lower monthly lows and lower monthly highs for nearly five out of the last six months). If bunds clear this price level they could run up to the current major weekly Fibonacci .382 retracement at 118.39 (as measured between last year's all-time weekly high of 124.60 and this year's current contract low of 114.55). Further resistance is at the psychological 120 level.  September London long gilts find near term support at last week's low of 109.08 (September gilts have made higher weekly lows for four consecutive weeks). A break below it could allow the market to test the one and a half year low established in June at 108.42. If September long gilts hit a new contract low they could plunge to the 2004 low of 104.86 or even the 1999 low of 104.29. Near term resistance is at the monthly July high of 109.98 (gilts have made lower monthly highs for five out of the last six months). Further resistance is at the daily June high of 110.58. If gilts make it past this high they could rally to the major weekly Fibonacci .382 retracement at 111.35 (as measured between this year's current weekly high of 116.08 and last week's low of 108.42). Further resistance is at the major weekly Fibonacci .618 retracement at 113.15 (as measured between this year's current weekly high of 116.08 and last week's low of 108.42).  September Australian 10-year bonds find near term support at last week's new contract low of 94.06. Further support is at the weekly 2004 low of 93.88. If this low does not support the market it could drop to the weekly 2002 low of 93.40. Near term resistance is at the monthly June high of 94.275 (Aussie bonds have made lower monthly lows and lower monthly highs for five out of the last six months). A rally above it should take the market to the weekly June high of 94.42 in confluence with the current intermediate weekly Fibonacci .382 retracement at 94.43 (as measured between last year's weekly high of 95.03 and the current contract low of 94.11). Further resistance is at the intermediate weekly Fibonacci .618 retracement at 94.68 (as measured between last year's weekly high of 95.03 and the current contract low of 94.06).  September JGB's  (Japanese gov't. bonds) find near term support at last week's low of 131.80. A break below it could allow the market to test the weekly July low of 130.71. Further support is clustered between the major monthly Fibonacci .618 retracement at 130.29 (as measured between the 1994 low of 106.42 and the 2003 all-time high of 145.04), the current contract low of 130.21, and the 2000 monthly low of 130.17. If September JGBs do not stabilize in this area they could plunge to the 1999 spike low of 125.70. Near term resistance is at the weekly July high of 132.85. A rally above it could send JGBs to the monthly June high of 134.14 in confluence with the current intermediate weekly Fibonacci .382 retracement at 134.23 (as measured between this year's current weekly high of 138.56 and this year's current weekly low of 131.55). Further resistance is at the current intermediate weekly Fibonacci .618 retracement at 135.88 (as measured between this year's current weekly high of 138.56 and this year's current weekly low of 131.55) in confluence with last year's weekly low of 135.90 (old support is new resistance).

Currencies - The US dollar index tagged weekly Fibonacci .618 resistance and backed off sharply. If the market can muster another rally and take out the July high of 87.05 perhaps it could run to the weekly chart gap area between 88.60 and 88.91 followed closely by the current intermediate weekly Fibonacci .618 retracement at 89.05 (as measured between last year's weekly high of 92.53 and this year's current weekly low of 83.41). Further resistance is at this year's current high on the weekly chart at 91.18. Near term support is at the daily July low of 84.42. Further support is at the contact low of 83.27. A break to new contract lows could take the September US dollar index down to visit the weekly March 2005 reaction low of 81.27 or even the 2004 low of 80.48. Open Interest is at the lowest level since September. The %R overbought/oversold indicator shows that the greenback is near oversold on the daily and weekly charts. The Seasonal index shows that the dollar should move sideways for the first half of August and then decline for the rest of the month. Commercial interests are holding the smallest net long position since in three months. Large traders are holding the biggest net long position since then. Small traders are neutral on the greenback.

The Canadian dollar finds near term support at the daily July low of .8742. A break below it could take the "looney" down to more technical support clustered between the monthly 18-bar Moving Average near .8550 (the Canadian dollar has not closed below the monthly 18-bar Moving Average since 2002), the daily April low of .8543, and the monthly 2004 high of .8530 (old resistance). Further support is at the weekly November 2005 reaction low of .8357 in confluence with the weekly Fibonacci .618 retracement at .8350 (as measured between the weekly 2005 low of .7855 and this year's current multi-decade high of .9152) Near term resistance is at the August 1st reaction high of .8925 (the September Canadian dollar has made lower weekly highs for three out of the last four weeks). A break out above it could allow the market to rally to the current daily Fibonacci .618 retracement at .9010. Further resistance is at the contract high of .9175. Open Interest is sitting flat at the lowest level in several months. The %R overbought/oversold indicator shows that the Canadian dollar is just below overbought levels on the monthly chart. Seasonally, the Canadian dollar has a tendency to rally in August. Commercial interests are holding the smallest net short position in four months. Large traders are holding the biggest net short position since late March. Small traders are still neutral on the "looney".

The Australian dollar finds near term resistance at last week's two month high of .7671. Further resistance is at the contract high of .7770 followed closely by this year's current high on the weekly chart at .7789. A break out above these highs could allow the Aussie to make a run for the 2005 high of .7992. Near term support is at last week's low of .7497 (the September Aussie dollar has made higher weekly highs and higher weekly lows for three out of the last four weeks) and the 9-day Moving Average /18-day Moving Average crossover level. (The 9-day Moving Average has closed above the 18-day Moving Average every day for nearly a month). If the market takes out a previous week's low and the 9-day Moving Average closes back below the 18-day Moving Average it could decline to the daily July low of .7393. Further support is at the daily June of .7262. Failure to stabilize here could result in a decline to this year's current weekly low of .7006. Open Interest is at the highest level since mid-June. The %R overbought/oversold indicator shows that the Australian dollar is overbought on the daily chart and nearing overbought levels on the weekly chart. Seasonally, the Australian dollar has a tendency to move sideways in a choppy fashion in August. Commercials are holding the biggest net short position since mid-May. Large traders (hedge funds) are holding the biggest net long position since September. Small traders are mildly bullish.

The September Canadian dollar/Australian dollar finds near term support last week's multi-month low of .1182 (just over eleven and three-quarter cents) premium Canadian dollar. Further support is at this year's current low on the weekly chart at .1053 (about ten and a half cents) premium Canadian dollar. If the decline does not end here the spread may be headed for the major weekly Fibonacci .382 retracement at .0897 (about nine cents) premium Canadian dollar. Near term resistance is at the current major daily Fibonacci .382 retracement at .1372 (around thirteen and three-quarter cents) premium Canadian dollar. Further resistance is found at the current major daily Fibonacci .618 retracement at .1489 (just under fifteen cents) premium Canadian dollar. If the spread makes it past this level it may challenge the spread high of .1679 (about sixteen and three-quarters of a cent) premium Canadian dollar.

The British pound is testing resistance at the August 1st reaction high of 1.8783. A rally above it could allow sterling to make a run for the contract high of 1.9054. If the market breaks out to a new contract high it could be on the way up to the 2004 high of 1.9500. Near term support is at the current intermediate daily Fibonacci .618 retracement at 1.8376. A break below it could send the market down to the July low of 1.8200 or the June low of 1.8124. If these lows are broken the market may slide to the current intermediate weekly Fibonacci .618 retracement at 1.7806 (as measured between last year's weekly low of 1.7046 and this year's current weekly high of 1.9035). Further support is at the current major monthly Fibonacci .382 retracement at 1.7266 (as measured between the 2001 monthly low of 1.3652 and the monthly 2004 high of 1.9500). Open Interest is at the highest level since mid-June. The %R overbought/oversold indicator shows that sterling is overbought on the daily and weekly charts. The pound has a seasonal tendency to quietly move higher in August. Commercials are still holding a sizable net short position. Large traders (hedge funds) are holding a large net long position. Small traders are also holding a large net long position.

The September Swiss franc finds near term resistance between the July high of .8270 and the current daily Fibonacci .618 retracement at .8302. Further resistance is at this year's current high on the weekly chart at .8421. A break out above this high could clear the way for the market to make a run for the 2004 high of .8892. Near term support is at the July low of .7987. A drop below it could allow the market to test the current major weekly Fibonacci .618 retracement at .7881 (as measured between last year's weekly low of .7548 and this year's current weekly high of .8421). Further support is at a double bottom between this year's current weekly low of .7560 and last year's weekly low of .7548. Open Interest is flat. The Seasonal index shows that the Swiss franc usually moves slightly higher in August. Commercial interests are holding the biggest net long position since early April. Large traders are holding the biggest net short position since then. Small traders are also holding the biggest net short position since then.

The Euro currency finds near term resistance at the major weekly Fibonacci .618 retracement at 1.2913 (as measured between the 2004 weekly high of 1.3687 and last year's weekly low of 1.1661) in confluence with the July high of 1.2925. Further resistance is at the contract high of 1.3074. A strong close above it may increase the odds that the Euro is headed back up to the 2004 all-time high of 1.3687. Near term support is located at the monthly July low of 1.2503 in confluence with the current major weekly Fibonacci .382 retracement at 1.2490 (as measured between last year's weekly low of 1.1661 and this year's current weekly high of 1.3003). Further support is at the current major weekly Fibonacci .618 retracement at 1.2174 (as measured between last year's weekly low of 1.1661 and this year's current weekly high of 1.3003). Failure to stabilize here could send the Euro back below the 1.20 mark. Open Interest is flat. The %R overbought/oversold indicator shows that the Euro is near overbought levels on the daily and weekly charts. Seasonally, the Euro should trade in a sideways choppy range in August. Commercial interests are holding the smallest net short position since early April. Large traders are holding the smallest net long position since then. Small traders are still holding a sizable net long position.

The Japanese yen finds near term support at the weekly July low of .008540. Further support is located at this year's weekly low of .008390. If the yen makes a new low for the year it could decline to last year's low of .008252. Near term resistance is at the weekly July high of .008901 followed by the current intermediate weekly Fibonacci .618 retracement at .008958 (as measured between this year's current weekly high of .009217 and the weekly July low of .008540). If the yen can penetrate this price barrier it could challenge this year's current weekly high of .009217 or the current major weekly Fibonacci .618 retracement at .009248 (as measured between last year's weekly high of .009864 and last year's weekly July low of .008252). If the yen conquers this resistance zone look for a run to the psychological .009500 area. Open Interest is flat. The yen has a seasonal tendency to move slightly higher in August. Commercial interests are holding the biggest net long position since June of 2005. Large traders are holding the biggest net short position in several years. Small traders are holding the biggest net short position since mid-April.

Metals - December gold finds near term support at the July low of $615.00 (all-session chart). A break below it could allow the market to test the monthly June low of $555.00 (all-session chart) or even the major monthly Fibonacci .382 retracement at $548.80 (as measured between the monthly 1999 low of $252.50 on the all-session chart and this year's current monthly high of $732.00 on the all-session chart). Failure to stabilize here could result in a fast decline to another major weekly Fibonacci .618 retracement at $509.10 (as measured between the weekly 2004 low of $371.30 on the all-session chart and this year's current weekly high of $732.00 on the all-session chart). Near term resistance is at the July high of $691.20 (all-session chart). A strong close above last month's high could allow the market to rocket up to this year's current monthly high of $732.00 on the all-session chart. A break out to new highs could send December gold soaring to the psychological $800 mark. Open Interest is at a one month low. The %R overbought/oversold indicator shows that gold is headed back to overbought territory on the daily chart. The Seasonal index shows that gold should make a very subdued rally in August. Commercials are holding the biggest net short position in two months. Large traders (hedge funds) are holding their largest net long position since late May. Small traders are neutral.

September silver spent the month of July going sideways. It failed to touch the high or low of the previous month and created an "inside bar" on the charts. If September silver can get back above the monthly July high of $11.82 (all-session chart) it may rally to the current major weekly Fibonacci .618 retracement at $13.03 (as measured between this year's current high of $15.18 on the all-session chart and this year's current low of $9.545 on the all-session chart). If the market can clear the thirteen dollar level it could surge to this year's current high of $15.18 on the all-session chart. Conversely, if September silver breaks below the monthly July low of $10.465 (all-session chart) it may drop to the June low of $9.545 (all-session chart). Further support is found at the monthly 18-bar Moving Average near $9.20 (silver has only closed below the monthly 18-bar Moving Average once in the last three years). If silver does not stabilize here it could hit further support clustered between the April 2004 high of $8.31 (old resistance), the major monthly Fibonacci .618 retracement at $8.20 (as measured between the 2001 monthly low of $4.015 and this year's current monthly high of $14.97), and the December 2004 high of $8.19 (old resistance). Open Interest is at a sixteen month low. The %R overbought/oversold indicator shows that silver is now overbought on the daily chart. Seasonally, silver should move sideways in August. Commercials are holding the smallest net short position since September. Large traders (hedge funds) are holding the smallest net long position since then. Small traders are holding the smallest net long position since Thanksgiving.

September copper finds near term resistance at the July high of 377.00 (all-session chart). Further resistance is at the contract high of 394.00 (all-session chart). If September copper breaks out to a new contract high it could stage a rally to this year's current weekly high of 416.00 on the all-session chart. Near term support is at the daily July low of 321.00 (all-session chart). Further support is at the daily June low of 291.45 (all-session chart). If these lows are violated copper may decline to the major monthly Fibonacci .382 retracement at 280.15 (as measured between the monthly 2001 low of 60.35 on the all-session chart and this year's current all-time high of 416.00). If copper does not establish support here it could challenge the monthly 18-bar Moving Average near 230.00 (copper has not closed below the monthly 18-bar Moving Average once in the last three years). The copper market is still in backwardation with the September contract trading at a premium over the December contract. However, the spread declined to the lowest level since mid-April. This does not back the case for stronger copper prices. The spread needs to start widening again in favor of the September contract to be construed as a bullish sign. Open Interest is at the lowest level since October of 2004. Copper has a seasonal tendency to be very flat in August. Commercials are holding a very small net long position. Large traders (hedge funds) are holding a modest size net short position. Small traders are neutral on copper.

Energies - September crude oil finds near term resistance at the current daily Fibonacci .618 retracement at $77.15 followed by the daily May high of $77.52 on the all-session chart (old resistance). A break out above it could allow the market to test a major technical resistance area clustered between two different "A,B,C" wave projections at $79.20 and $80.05 and the current contract high of $79.86 (all-session chart). This could be a prime area to buy some put options in anticipation of a major reversal. The first "A,B,C" wave long-term projection is on the monthly chart where wave "A" is the move from the 2001 multi-month reaction low of $16.70 up to what was then an all-time high in 2004 at $55.65. Wave "B" is the correction from this all-time high to the December 2004 reaction low of $40.25 (which was only a half-dollar below the monthly Fibonacci .382 retracement of wave "A"). Wave "C" is the move back up off of the 2004 reaction low of $40.25. In bull markets, wave "C" is usually at least the same size as wave "A". This would put a minimum target for wave "C" on the monthly chart at $79.20. The next "A,B,C" wave projection is on the weekly chart where wave "A" is the move from the weekly May 2005 reaction low of $46.20 up to was then an all-time high last year at $70.85. Wave "B" is the correction from this high on the weekly chart at $70.85 to the weekly November low of $55.40 (which was only a few ticks below a weekly Fibonacci .618 retracement of wave "A"). Wave "C" is the move back up off of the weekly November low of $55.40. In bull markets, wave "C" is usually at least the same size as wave "A". This puts a minimum target for wave "C" on the weekly chart at $80.05. If the market does not stop at this price barrier it could easily hit the $85 or $90 mark. Near term support is at the monthly July low of $71.65 on the all-session chart (crude oil has made higher monthly lows for seven out of the last eight months). If crude oil breaks last month's low it could get smashed to the current intermediate weekly Fibonacci .618 retracement at $64.19 (as measured between the weekly November low of $55.40 on the all-session chart and the current all-time high of $78.40 on the all-session chart) followed closely by the monthly 18-bar Moving Average near $63.85 (crude oil has not closed below the monthly 18-bar Moving Average since October of 2003). Further support is at the weekly November low of $55.40. Despite the fact that crude oil has been in a strong bull market reaching new all-time highs the back month contracts have out-performed the closer delivery month contracts. This is a bit surprising since a strong bull market indicates strong demand for the commodity. Typically, this translates to closer delivery month prices moving much higher than the back month contracts since buyers want the commodity delivered sooner rather than later. Although gasoline has been in strong backwardation (closer delivery months are priced higher than deferred delivery months) for quite a long time crude oil and heating oil have not. Perhaps this indicates that supply is not as restricted as we have been led to believe? Or does it mean that the market is expecting the current high prices to persist for quite some time and therefore carrying charges are being tacked on to the already expensive prices? Time will tell. From a contrarians view point, it's the best-case-scenario for a shorting opportunity since you are actually rewarded instead of penalized for sell further out delivery contracts. You get the carrying charge premium. On the other hand, traders on the long side of crude oil face an uphill battle as the constant carrying change has to be overcome since the contracts must be continually rolled over at premium prices. This definitely diminishes the returns on the long side of this market. Open Interest is hit a new all-time high. The %R overbought/oversold indicator shows that crude oil is overbought on the monthly chart. The Seasonal index shows that crude oil should rally in August. Commercial interests are holding the biggest net short position since mid-May. Large traders are holding the largest net long position since then. Small traders are neutral.

September Unleaded Gas finds near term resistance clustered between the current major weekly Fibonacci .618 retracement at 232.69 (as measured between last year's all-time weekly high of 292.00 and this year's current weekly low of 136.75), the current contract high of 233.75 (all-session chart), and this year's current weekly high of 235.00. If gasoline gets through this gauntlet of resistance it should have no trouble testing the psychological 2.50 area. Further resistance is at last year's all-time weekly high of 292.00. The gasoline market is still in backwardation (closer delivery months are priced higher than deferred delivery months) with most spreads hitting new highs in late July. The September/October spread pulled back sharply right at the end of the month to a two month low but the October/November and November/December spreads are trading just under the spread highs. This is a bullish sign. September unleaded gasoline finds near term support at the daily July low of 216.00 on the all-session chart. (Gasoline has only broken a previous month's low once in the last eight months). A break below last month's low could take it down to the current major daily Fibonacci .382 retracement at 205.71 (as measured between the contract low of 160.35 and the current contract high of 233.75). Further support is at the current major daily Fibonacci .618 retracement at 188.39 (as measured between the contract low of 160.35 and the current contract high of 233.75) followed by the monthly 18-bar Moving Average near 186.18 (gasoline has only closed below the monthly 18-bar Moving Average a couple of times in the last three years). Open Interest is at the lowest level since October of 2003. The %R overbought/oversold indicator shows that gasoline is overbought on the daily and weekly charts. Seasonally, gasoline should move strongly higher all thru August. Commercial interests are holding the biggest net short position in three months. Large traders are holding the largest net long position since February. Small traders are net long as well.

September natural gas exploded to a multi-month high of 8.619 on the all-session chart. If this high is exceeded look for the market to test the major weekly Fibonacci .382 retracement at 9.359 (as measured between last year's all-time weekly high of 15.780 and this year's current weekly low of 5.390). Further resistance is at the major weekly Fibonacci .618 retracement at 11.811 (as measured between last year's all-time weekly high of 15.780 and this year's current weekly low of 5.390). The September/October natural gas spread tightened to the highest level since late April. The October natural gas has given back over half of the premium that it had over the September contract back in May. This is a bullish occurrence. Near term support is at last week's low of 7.223 (all-session chart). A clean break below it could pull the market back down to the contract low of 5.630 on the all-session chart. After that it could hit this year's current weekly low of 5.390 (all-session chart). If September natural gas makes a new low for the year it could decline to the 2004 low of 4.520. Open Interest reached a new all-time high again. The %R overbought/oversold indicator shows that natural gas briefly hit overbought levels on the daily chart. Natural gas has a seasonal tendency to move quietly higher in August. Commercial interests are holding the biggest net short position since Memorial Day in 2004. Large traders are holding their biggest net long position since then. Small traders are neutral.

Meats - October live cattle finds near term resistance at the July 20th reaction high of 88.95 in confluence with the current daily Fibonacci .618 retracement at 89.05. Further resistance is at the contract high of 91.17. If October cattle hits a new contract high it could be on it's way to last year's weekly high of 97.12. If this high is exceeded the cattle market may runaway to the 2003 all-time high of 103.60. In early July, December cattle was priced 217 points over the October contract. At the end of July the December contract was a mere 27 points over the October contract. This disappearance of the carrying charge is a very bullish development for October cattle. Near term support is at the July low of 85.60. (October cattle has made higher monthly highs and higher monthly lows for three consecutive months). A break below it could allow the market to decline to the current major daily Fibonacci .618 retracement at 83.25 (as measured between the April low of 78.35 and the contract high of 91.17). Further support is at the contract low of 78.35. Open Interest is flat. The Seasonal index shows that cattle should move sideways in August. Commercial interests are holding the smallest net long position in months. Large traders sold a small amount of their large net long position. Small traders are still holding a sizable net short position.

October feeders find near term resistance at the July 19th reaction high of 115.45. Further resistance is at the contract high of 116.40. A rally above this high should take the market up to the weekly June high of 117.92. Further resistance is at last year's all-time weekly high of 119.75. If this high is exceeded feeders could soar to the psychological 130 area. Near term support is at the July low of 111.60. (October feeders have made higher monthly lows for three consecutive months). A break below it could allow the market to decline to the current major daily Fibonacci .382 retracement at 109.87 (as measured between the April low of 99.35 and the contract high of 116.40). Further support is at the daily June low of 106.25 followed closely by the current major daily Fibonacci .618 retracement at 105.85 (as measured between the April low of 99.35 and the contract high of 116.40). Open Interest is at a three month high. The %R overbought/oversold indicator shows that feeders are very near overbought territory on the daily, weekly, and monthly charts. Seasonally, feeders should rally into late August. Commercials are holding a net short position for the first time since late January. Large traders (hedge funds) are holding the largest net long position since then. Small traders are currently holding a net short position in feeders.

October lean hogs find near term resistance at the July 31st reaction high of 62.55. Further resistance is at the contract high of 63.55. A break out to new contract highs could lead cause the pigs to fly up to the weekly June high of 77.25. the current contract high of 74.10. Further resistance is at the weekly 2005 high of 79.85. If this high is exceeded the market could the weekly 2004 high of 82.70. Hogs are in backwardation (closer delivery months are priced higher than deferred delivery months) but the spread premium between October hogs and December hogs is narrowing. October hogs are currently around 200 points above December hogs. In June the premium was 420 points in favor of the October contract. This should keep the bulls cautious. Near term support is at the July low of 58.40. (October hogs have made higher monthly lows for five out of the last six months). A break below it could allow the market to decline to the current major daily Fibonacci .618 retracement at 57.25 (as measured between the January low of 53.35 and the contract high of 63.55). Further support is at the daily May low of 55.20. If this low is broken the market may test the double bottom between the April low of 53.60 and the January low of 53.35. Open Interest is near the all-time high. Hogs have a seasonal tendency to trade sideways in a choppy range in August. Commercials are holding the largest net long position since mid-June. Large traders (hedge funds) are holding the smallest net long position since then. Small traders are still holding their record size net short position.

Grains - November soybeans find near term support clustered between the July low of $5.92, the June low of $5.91, and the April low of $5.854. If these lows are broken the market should test the contract low of $5.754. A break to new contract lows could allow November soybeans to decline to this year's current low on the weekly chart at $5.542 the weekly November low of $5.454. Further support is located at the major double bottom on the weekly chart between the 2004 low of $5.01 and the 2005 low of $4.984. Near term resistance is at the current daily Fibonacci .618 retracement at $6.214 (as measured between the July high of $6.394 and the July low of $5.92). Further resistance is at the July high of $6.394. A break out above last month's high should allow beans to test the January high of $6.484. If this high is exceeded the market could hit the psychological $7.00 mark. Open Interest is flat. The %R overbought/oversold indicator shows that beans are oversold on the daily and monthly charts. The Seasonal index shows that soybeans should move sideways in August. Commercial interests are holding a very large net long position. Large traders are maintaining a sizable net short position. Small traders are holding the smallest net short position that they have had all year.

December soy meal find near term support at the new contract low of $167.00. Further support is at this year's current low on the weekly chart at $161.00. If soy meal continues it's descent it may be headed to last year's weekly low of $148.10 or the 2004 weekly low of $146.60. Near term resistance is at last week's high of $175.80 (December soybean meal has made lower weekly highs for six out of the last seven weeks) and the 9-day Moving Average /18-day Moving Average crossover level. (The 9-day Moving Average has closed below the 18-day Moving Average every day since late June). If the market can close above a previous week's high and the 9-day Moving Average closes strong above the 18-day Moving Average expect a quickly rally to the current major daily Fibonacci .382 retracement at $180.80 (as measured between the December high of $203.20 and the current contract low of $167.00). Further resistance is at the current major daily Fibonacci .618 retracement at $189.40 (as measured between the December high of $203.20 and the current contract low of $167.00) followed closely by the daily June high of $191.00. Open Interest is hit a new all-time high. The %R overbought/oversold indicator shows that bean meal is oversold on the daily, weekly, and monthly charts. Seasonally, soy meal should be in a choppy trading range in August. Commercials are sitting with the same size net long position that they have had for months. Large traders (hedge funds) are sitting with the same size net short position they have had for months. Small traders remain neutral on meal.

December bean oil finds near term resistance at the current daily Fibonacci .618 retracement at 27.89. Further resistance is at the contract high of 28.70 followed by the major weekly Fibonacci .618 retracement at 28.93 (as measured between the weekly 2004 high of 35.18 and last year's weekly low of 18.82). If the market does not stop here it could test the psychological 30 mark. Near term support may be located between the daily July low of 26.58 and the current major daily Fibonacci .382 retracement at 26.30 (as measured between the December low of 22.41 and the contract high of 28.70). Further support is found between the daily June low of 25.02 and the current major daily Fibonacci .618 retracement at 24.81 (as measured between the December low of 22.41 and the contract high of 28.70). If December bean oil does not establish support in this area it could decline to the daily April low of 23.57. Open Interest is near the new all-time high. Bean oil has a seasonal tendency to edge slightly lower in August. Commercial interests are holding the biggest net short position since March of 2004. Large traders are holding the largest net long position since then. Small traders are holding a big net long position.

December corn finds near term support at the daily July low of $2.51 followed by the daily June low of $2.476. If these lows are broken expect a decline to the contract low of $2.374. If December corn makes a new contract low it could easily drop to the weekly June low of $2.21. Near term resistance is at the current daily Fibonacci .618 retracement at $2.716 (as measured between the July high of $2.844 and the July low of $2.51). Further resistance is at the July high of $2.844. A break out above last month's high could send corn to the psychological three dollar mark. Open Interest is sitting flat at the all-time high. The Seasonal index shows that corn should rally in the first half of August and then head lower in the second half of the month. Commercial interests are holding a large net short position. Large traders are holding the big net long position. Small traders are holding a sizable net short position.

November rice finds near term resistance at the current contract high of 9.750. A break out to new highs could allow the market to test the psychological 10.000 area. Further resistance is at the 2004 weekly high of 11.320. Near term support is at the July low of 9.390. (November rice has only broken a previous month's low once in the last seven months). A break below it could allow the market to decline to the daily June low of 9.090 followed closely by a major daily Fibonacci .618 retracement at 9.045 (as measured between the March low of 8.610 and the contract high of 9.750). If the market does not stabilize here it could decline to the daily March low of 8.610. Open Interest is flat. The %R overbought/oversold indicator shows that rice is near overbought on the weekly chart. Seasonally, rice should decline in August. Commercial interests are still holding a near record size net short position. Large traders (hedge funds) are holding a near record size net long position. Small traders are holding their biggest net long position since January 2004.

December oats finds near term resistance at the current contract high of $2.08. A break out to new highs could allow the market to test last year's weekly high of $2.206. Further resistance is at the 2002 weekly high of $2.48. Near term support is at the July low of $1.914. (December oats made higher monthly highs and higher monthly lows for six consecutive months). A break below it could allow the market to decline to the June 29th reaction low of $1.85 or even the May 30th reaction low of $1.804. If these lows are broken expect December oats to test the major daily Fibonacci .618 retracement at $1.764 (as measured between the January low of $1.57 and the contract high of $2.08). Open Interest is flat. Oats have a seasonal tendency to get choppy in August. Commercials are holding the largest net short position in over two years. Large traders (hedge funds) are holding a record size net long position. Small traders are neutral on oats.

December wheat finds near term support at the July low of $4.034. (December wheat has only broken a previous month's low once in the last four months). A break below it could allow the market to decline to the major daily Fibonacci .618 retracement at $3.906 (as measured between the December low of $3.46 and the contract high of $4.63) in confluence with the daily June low of $3.904. If the market does not stabilize here it could decline to the daily March low of $3.77. Near term resistance is at the major daily Fibonacci .618 retracement at $4.352 (as measured between the contract high of $4.63 and the June low of $3.904) in confluence with the daily July high of $4.364. A break out above this price barrier could allow the market to test the contract high of $4.63. If December wheat hits a new contract high it could be gearing up for a run to the psychological five dollar area. Open Interest is flat. The Seasonal index shows that wheat should rally sharply in August. Commercial interests are holding the smallest net long position since Memorial Day. Large traders are holding the biggest net long position since then. Small traders are holding a large net short position.

Softs - September coffee finds near term support at last week's new contract low of 93.95. Further support is at a weekly "A,B,C" wave projection at 90.80 in confluence with the weekly December low of 90.75. (The "A,B,C" wave projection is on the weekly chart where wave "A" is the move from the major reaction high in January at 125.90 down to the weekly March low of 102.80. Wave "B" is the rally from the weekly March low of 102.80 up to the weekly April reaction high of 113.90. Wave "C" is the decline off of the weekly April reaction high of 113.90. In bear markets, wave "C" is usually at least the same size as wave "A". Since wave "A" was 23.10 points long, a decline of 23.10 points off of the weekly April reaction high of 113.90 would put a minimum target for wave "C" at 90.80). If support is not established here look for coffee to decline to last year's weekly low of 84.45. Near term resistance is at the July high of 104.75 (September coffee has made lower monthly highs for six consecutive months) followed by the current major weekly Fibonacci .382 retracement at 105.90 (as measured between the weekly January high of 125.90 and this year's current weekly low of 93.50). A rally thru this price zone could take it to the current major daily Fibonacci .382 retracement at 108.40 (as measured between the daily January high of 131.75 and the current contract low at 93.95). If the rally does not end here coffee may run to the current major weekly Fibonacci .618 retracement at 113.55 (as measured between the weekly January high of 125.90 and this year's current weekly low of 93.50) in confluence with the weekly April high of 113.90. Open Interest is sitting flat near the all-time high. Seasonally, coffee should move sideways for the first half of August and then rally in the second half of the month. Commercials are holding s small net long position . Large traders (hedge funds) are holding the largest net short position since the fall of 2004. Small traders are holding a decent size net long position.

September cocoa finds near term resistance at the huge gap on the daily price chart between $1,527 and $1,556. Just above it is the current major daily Fibonacci .382 retracement at $1,575 (as measured between the contract high of $1,738 and the July low of $1,475). Further resistance is at the current major daily Fibonacci .618 retracement at $1,638 (as measured between the contract high of $1,738 and the July low of $1,475). If September cocoa makes it past this level it may launch an assault on the contract high of $1,738. Near term support is located between the daily July low of $1,475, the current major weekly Fibonacci .618 retracement at $1,474 (as measured between last year's weekly low of $1,315 and this year's current weekly high of $1,732), and the daily April low of $1,464. If these lows are broken September cocoa may test the double bottom at this year's current weekly low of $1,410 which was hit at the beginning of March and matched in April. Further support is at last year's weekly low of $1,315. Open Interest is at a one month low. The %R overbought/oversold indicator shows that cocoa is oversold on the daily chart.  Cocoa has a seasonal tendency to decline in the first half of August and then rally for the second half of the month. Commercials are holding one of the largest net short positions that they have had in years. Large traders sold a small part of their largest net long position that they have had in years. Small traders are holding the largest net short position since January.

October sugar finds near term support between the daily July low of 14.72 and the weekly June low of 14.57. Further support is at the major weekly Fibonacci .382 retracement at 14.21 (As measured between the 2004 weekly low of 5.27 and this year's weekly high of 19.73). If the decline does not end here it could test the psychological thirteen cent mark. Near term resistance is at last week's high of 15.74 (October sugar has made lower weekly highs and lower weekly lows for three consecutive weeks). Further resistance is at the current major daily Fibonacci .382 retracement at 16.11 (as measured between the contract high of 18.37 and the daily July low of 14.72). A rally past this level could take the market up to the current major daily Fibonacci .618 retracement at 16.98 (as measured between the contract high of 18.37 and the daily July low of 14.72) followed by the daily July high of 17.25. Further resistance is at the contract high of 18.37. Open Interest is at a two month high. The %R overbought/oversold indicator shows that sugar is oversold on the daily chart. The Seasonal index shows that sugar should decline in August. Commercials are holding the smallest net short position since June of 2005. Large traders (hedge funds) are holding the smallest net long position since then. Small traders are neutral.

September orange juice finds near term resistance at the new sixteen year high of 176.00. Further resistance is at the two dollar mark. If the market does not stop here it may easily challenge the 1990 multi-decade high of 206.50. Near term support is at the current major daily Fibonacci .382 retracement at 153.85 (as measured between the daily January low of 118.00 and the current contract high of 176.00) in confluence with the July low of 153.25 (September OJ made higher monthly highs and higher monthly lows for ten out of the last eleven months). A break below this support level could cause a drop to the current major daily Fibonacci .618 retracement at 140.15 (as measured between the daily January low of 118.00 and the current contract high of 176.00). Further support is at the current major weekly Fibonacci .382 retracement at 129.45 (as measured between the weekly 2004 low of 54.20 and this year's current high of 176.00). Open Interest is sitting at the lowest level since October. The %R overbought/oversold indicator shows that OJ is still overbought on the daily, weekly, and monthly charts. Seasonally, OJ should rally in the first half of August and then go sideways for the rest of the month. Commercials are holding the smallest net short position since April. Large traders are holding the smallest net long position since then. Small traders are neutral to bullish.

December cotton finds near term resistance at the current major daily Fibonacci .618 retracement at 57.60 (as measured between the daily February high of 61.55 and the contract low of 51.20). Further resistance is located between the daily June high of 59.20 and the daily April high of 59.60. If December cotton can clear these highs it may challenge the contract high of 61.55. Near term support is at the July 31st reaction low of 54.28. A close below it could take December cotton back down to the contract low of 51.20. If the cotton market makes a new contract low it may not find support again until this year's weekly low of 45 cents. Open Interest is flat. Cotton has a seasonal tendency to decline in the first few trading days of August and then move sharply higher for the rest of the month. Commercials are holding a small net long position. Large traders (hedge funds) are holding a small net short position. Small traders are neutral.