The March NASDAQ 100 made an outside bar when it took out the previous week's high and the previous week's low. Even though the market broke a previous month's low for the first time since July, the big reversal up gives it one more chance to hold on. Near term resistance is at last week's high of 1816.00 followed by the 2006 high of 1847.00. Further resistance is at the psychological 2000 mark. After that the market could challenge the weekly May 2001 reaction high of 2081.50. Near term support is at last week's low of 1747.50 in confluence with the weekly 18-bar Moving Average that it has not closed below since August. If this support area fails look for a decline to the current weekly Fibonacci .618 retracement at 1606.60 (as measured between the weekly 2006 low of 1458.00 on the weekly continuous chart and the weekly 2006 high of 1847.00 on the weekly continuous chart). A break of last week's low could be a good signal to get short since the NASDAQ 100 has established major highs for the last six years in the month of January. Open Interest is flat. The %R overbought/oversold indicator shows that the NASDAQ 100 is overbought on the monthly chart. The NASDAQ 100 should rally for the first half of January and then trade sideways for the rest of the month. Commercial interests are holding the largest net long position in nearly two years! Large traders (hedge funds) are holding their biggest net long position since mid-January. Small traders are holding the largest net short position since December 2004.

Interest rates - March T-bonds made an outside bar on the monthly chart when it took out the previous month's high and then took out the previous month's low for the first time since May. This puts the market on the defensive at the moment. The market also tested support at the major weekly Fibonacci .382 retracement at 111-08 (as measured between last year's weekly double bottom low of 105-11 and the weekly December high of 114-29) and bounced. If the market continues it's descent and breaks below the weekly December low of 111-04 it could decline to the major weekly Fibonacci .618 retracement at 109-00 (as measured between last year's weekly double bottom low of 105-11 and the weekly December high of 114-29). Near term resistance is at last week's high of 112-28 (March T-bonds have only broken a previous week's high once in the last five weeks) and the 18-day Moving Average it has not closed above for nearly a month. If the market breaks a previous week's high and closes back above the 18-day Moving Average look for it to challenge the daily contract high of 114-30. Further resistance is at the weekly 2006 high of 115-13. If T-bonds break out above this high it could be on it's way to the 2005 high of 119-30. The March NOB spread (T-notes vs. T-bonds) broke a previous month's low for the first time since May. A close below the daily December low of 3-30 could bring the spread down to the daily October low of 3-08 premium T-bonds. Further support is at the current major daily Fibonacci .618 retracement at 2-14 premium T-bonds (as measured between the daily contract low of 24/32nds premium T-bonds and the current spread high of 5-06 premium T-bonds). Important resistance is at the daily November high of 5-06 premium T-bonds. Further resistance is at the 2005 all-time closing high of 5-14 on the monthly continuous chart. A break out to new highs could allow the spread to immediately add another full point. Open Interest is at the lowest level in two months. T-bonds have a seasonal tendency to move sideways in January. Commercial interests are holding the smallest net long position in over ten months. Large traders are still holding the smallest of net short position since mid-July. Small traders are holding the biggest net long position since February of 2003.

March T-Notes find near term support at the current major weekly Fibonacci .382 retracement at 107-145 (as measured between last year's weekly low of 104-01 and the weekly December high of 109-18) in confluence with the weekly December correction low of 107-115. If this support does not hold, the market could decline to the current major weekly Fibonacci .618 retracement at 106-045 (as measured between last year's weekly low of 104-01 and the weekly December high of 109-18). Near term resistance is at last week's high of 108-105 (March T-notes have made equal or lower weekly highs for five consecutive weeks) and the 18-day Moving Average it has not closed above for nearly a month. If the market breaks a previous week's high and closes back above the 18-day Moving Average look for it to challenge the weekly December high of 109-18 in confluence with the daily contract high of 109-21. Further resistance is at the 2006 weekly high of 110-065 followed closely by the intermediate weekly Fibonacci .618 retracement at 110-16 (as measured between the 2005 weekly high of 114-16 and the 2006 weekly low of 104-01) in confluence with the major weekly Fibonacci .382 retracement at 110-175 (as measured between the 2003 weekly high of 121-03 and the 2006 weekly low of 104-01). If T-notes make it thru this barrier of price resistance it could indicate that the market is headed to the 2005 high of 114-16. Open Interest is at the same level it was at a month ago. The %R overbought/oversold indicator shows that notes are near oversold on the daily chart. T-notes have a seasonal tendency to move slightly higher in January. Commercials are holding the smallest net short position since mid-August. Large traders (hedge funds) are holding the smallest net long position since then. Small traders are still holding a moderate size net short position.

International Bonds - March Canadian 10-year Bonds find near term support at the current major weekly Fibonacci .382 retracement at 113.71 (as measured between last year's weekly low of 109.68 and the weekly December high of 116.20) in confluence with the weekly December correction low of 113.57. If this support does not hold, the market could decline to the current major weekly Fibonacci .618 retracement at 112.17 (as measured between last year's weekly low of 109.68 and the weekly December high of 116.20). Further support is at last year's double bottom low between 109.72 in April and 109.68 in June. Near term resistance is at last week's high of 114.58 (March CGB's have made equal or lower weekly highs for five consecutive weeks) and the 18-day Moving Average it has not closed above for nearly a month. If the market breaks a previous week's high and closes back above the 18-day Moving Average look for it to challenge the dally contract high of 115.90 in confluence with the weekly December high of 116.20. A break out to new highs could allow the CGB's to make a run for the 2005 all-time high of 117.78.   March Euro Bunds find near term support at last week's multi-month low of 115.75. Further support is at last year's weekly double bottom low between 114.55 and 114.65. A break below the double bottom could smash the bunds down to the 2004 low of 111.81. Near term resistance is at last week's high of 116.55 (March bunds have made lower weekly highs and lower weekly lows for five consecutive 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 for the last month). If bunds can take out a previous week's high and the 9-day Moving Average closes back above the 18-day Moving Average the market could be signaling a change in trend. If this occurs look for a rally to the current major daily Fibonacci .618 retracement at 117.80 (as measured between the contract high of 119.06 and the current January low of 115.75). Further resistance is at the contract high of 119.06.  March London Long Gilts broke out of the sideways range and dropped to the lowest price since November 2004. A break below last week's low of 117.46 could allow gilts to continue their decline to the 2004 low of 104.86 or the 1999 low of 104.29. Near term resistance is at last week's high of 108.16 (March gilts have made lower weekly highs and lower weekly lows for five consecutive 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 for nearly a month). If gilts can take out a previous week's high and the 9-day Moving Average closes back above the 18-day Moving Average the market could rally to the current major daily Fibonacci .618 retracement at 109.27 (as measured between the contract high of 110.39 and the current contract low of 107.46). Further resistance is at the contract high of 110.39 followed by the major weekly Fibonacci .382 retracement at 110.75 (as measured between the 2006 weekly high of 116.08 and this year's current weekly low of 107.46) in confluence with the weekly September high of 110.76 and the weekly June high of 110.84.  March Australian 10-year Bonds find near term support at a double bottom between the weekly August low of 94.045 the weekly December low of 94.055. Further support is at the weekly 2004 low of 93.88. If this low is broken expect these bonds to go "down under" and hit the 2002 low of 93.40. Near term resistance is at last week's high of 94.21 (March Aussie bonds have made lower weekly highs for the last four 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 for nearly a month). If this market can take out a previous week's high and the 9-day Moving Average closes back above the 18-day Moving Average look for a run to the current major daily Fibonacci .618 retracement at 94.36 (as measured between the contract high of 94.545 and the current contract low of 94.055). Further resistance is at the contract high of 94.545.  March JGB's  find near term support between the weekly December low of 133.50 and the weekly October low of 133.18. Further support is at the major weekly Fibonacci .618 retracement at 132.69 (as measured between the 2006 weekly low of 130.71 and the weekly December high of 135.89) followed by the daily December spike low of 132.50. If JGBs can't find support in this area they may erode to the 2006 weekly low of 130.71. Near term resistance at the daily contract high of 135.20. Further resistance is at the weekly December high of 135.89 in confluence with the 2005 weekly low of 135.90 (old support) and the current major weekly Fibonacci .382 retracement at 136.18 (as measured between the 2003 weekly all-time high of 145.04 and the 2006 weekly low of 130.71). If the rally does not end here JGBs may surge another point to the current intermediate weekly Fibonacci .618 retracement at 137.29 (as measured between the 2005 double top weekly high of 141.35 and the 2006 weekly low of 130.71).

Currencies - The US Dollar Index has a high probability of establishing the high or low for the entire year in the first eight trading days of January. (For more details on this phenomenon, see our special report on the annual Buck Hunt). Technically, this market made an outside reversal up on the weekly chart when it dropped below the lows of the last two weeks and then reversed to take out the highs of the last five weeks. A rally above last week's high of 84.59 could confirm the reversal and take the greenback on up to the double top between the weekly October high of 87.08 and the weekly July high of 87.05. Further resistance is at a weekly Fibonacci .618 retracement at 88.58 ( as measured between the weekly 2005 high of 92.53 and last year's weekly low of 82.18). Near term support is at last year's weekly low of 82.18. A break below it should hammer the buck down to the 2004 low of 80.48 and the 1995 low of 80.14. Further support is at the 1992 low of 78.43. Open Interest is at a three month low. The Seasonal index shows that the dollar should trade higher in January. Commercial interests are holding the biggest net long position since June. Large traders are holding the biggest net short position since then. Small traders are holding the biggest net short position since June.

The Canadian Dollar finds near term support at last week's low of .8501 in confluence with the weekly January 2006 low of .8489. If the market does not recover from this level it could decline to a technical support cluster between a major weekly Fibonacci .382 retracement at .8382 (as measured between the 2004 weekly low of .7135 and the 2006 all-time high of .9152), the weekly November 2005 reaction low of .8357, and a weekly Fibonacci .618 retracement at .8350 (as measured between the 2005 weekly low of .7855 and the 2006 all-time high of .9152). Further support is at the major monthly Fibonacci .382 retracement at .8013 (as measured between the 2002 all-time low of .6170 and the 2006 all-time high of .9152). Near term resistance is at last week's high of .8618 (the March Canadian dollar has made lower weekly highs and lower weekly lows for four out of the last five weeks) and the 18-day Moving Average it has not closed above since late November. If the market breaks a previous week's high and closes back above the 18-day Moving Average look for it to make a run for the current weekly Fibonacci .382 retracement at .8750 (as measured between the 2006 weekly all-time high of .9152 and the current January low of .8501) or the monthly December high of .8798 (the "looney" has only broken a previous month's high once since the all-time high was established last May). Further resistance is at the current weekly Fibonacci .618 retracement at .8903 (as measured between the 2006 weekly all-time high of .9152 and the current January low of .8501). Open Interest is high. The %R overbought/oversold indicator shows that the Canadian dollar is oversold on the daily and weekly charts. Seasonally, the Canadian dollar should trade lower in January. Commercial interests are holding the biggest net long position on record. Large traders covered a small amount of their record net short position. Small traders are holding the smallest net long position since June.

The Australian Dollar finds major technical resistance between last week's high of .7964, the 2005 high of .7992, and the 2004 high of .7980. If this price barrier is conquered the Aussie could be catapulted to the 1996 high of .8210. Near term support is at the weekly December low of .7752. Further support is at a weekly Fibonacci .382 retracement at .7598 (as measured between the weekly 2006 low of .7006 and last week's high of .7964). If the Aussie does not stabilize here it could slip to the weekly October correction low of .7404 followed closely by the weekly Fibonacci .618 retracement at .7372 (as measured between the weekly 2006 low of .7006 and last week's high of .7964). Open Interest is flat. Seasonally, the Australian dollar has a tendency to trade in a choppy range in January. Commercials are holding a record size net short position. Large traders (hedge funds) are holding a record size net long position. Small traders are holding a huge net long position.

The September Canadian dollar/Australian dollar continued to plunge as it hit the lowest level since August. Near term support is at the daily January low of .0645 (about six and a half cents) premium Canadian dollar. Further support is at the major weekly Fibonacci .618 retracement at .0454 (about four and a half cents) premium Canadian dollar. If the spread sinks right below this retracement it could hit the weekly 2005 low of .0162 (just over one and a half cent). Near term resistance is at 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 for three months straight). If the 9-day Moving Average closes back above the 18-day Moving Average the spread could rebound to the current major daily Fibonacci .382 retracement at .1010 (just over ten cents) premium Canadian dollar (as measured between the daily September high of .1600 and the current daily January low of .0645 premium Canadian dollar). Further resistance is at the current major daily Fibonacci .618 retracement at .1235 (about twelve and a third of a cent) premium Canadian dollar (as measured between the daily September high of .1600 and the current daily January low of .0645 premium Canadian dollar) in confluence with the daily November high of .1244 (about twelve and half cents) premium Canadian dollar .

The British Pound made an outside reversal down on the weekly chart when it rallied to a two week high and then collapsed and broke a five week low. Near term support is at last week's low of 1.9267. A clean break below it could cause a decline to an intermediate weekly Fibonacci .618 retracement at 1.8784 (as measured between the weekly June correction low of 1.8124 and the 2006 weekly high of 1.9853) in confluence with the major weekly Fibonacci .382 retracement at 1.8781 (as measured between the weekly 2005 low of 1.7046 and the 2006 weekly high of 1.9853). If sterling fails to recover from this level it could drop to the weekly June correction low of 1.8124 in confluence with the major weekly Fibonacci .618 retracement at 1.8118 (as measured between the weekly 2005 low of 1.7046 and the 2006 weekly high of 1.9853). Near term resistance is at the 2006 weekly high of 1.9853. Further resistance is at the 1992 high of 2.0088. A strong breakout above it could allow cable to run back up to a major monthly Fibonacci .786 retracement at 2.1459 (as measured between the 1980 all-time high of 2.4485 and the 1985 all-time low of 1.0345). Open Interest is flat. The pound has a seasonal tendency to decline in January. Commercials are holding a record size net short position. Large traders (hedge funds) are holding a record size net long position. Small traders are holding a big net long position.

The March Swiss Franc made an outside reversal down on the weekly chart when it rallied above a two week high and then dropped below a five week low. Near term support is at last week's low of .8118 followed closely by an intermediate weekly Fibonacci .618 retracement at .8089 (as measured between the weekly October low of .7879 and the weekly December high of .8428). Further support is at the weekly October low of .7879. If this low is broken the Swissie might be inclined to visit the weekly double bottom between the 2005 low of .7548 and the 2006 low of .7560. Near term resistance is at last week's high of .8325 (the Swiss franc has only broken a previous week's high once in the last four weeks) and the 18-day Moving Average it has not closed above for nearly a month. If the market breaks a previous week's high and closes back above the 18-day Moving Average look for it to challenge the weekly December high of .8428. Further resistance is at the daily contract high of .8497. If the March Swiss franc exceeds this high it could run to the psychological 86 cent mark. Open Interest is very low right now. The %R overbought/oversold indicator shows that the Swissie is nearing oversold on the daily chart. The Seasonal index shows that the Swiss franc usually moves sharply lower in January. Commercial interests are holding the smallest net long position since July. Large traders are holding the smallest net short position in three months. Small traders are holding their largest net long position since the end of May.

The Euro Currency rallied above a three week high and then dropped below a five week low. This created an outside reversal down on the weekly chart. Near term support is at an intermediate weekly Fibonacci .618 retracement at 1.3041 (as measured between the weekly July low of 1.2503 and the weekly December high of 1.3373) in confluence with last week's low of 1.3023. Further support is at a double bottom between the weekly October low of 1.2526 and the weekly July low of 1.2503 in confluence with the monthly 18-bar Moving Average that it has not closed below since March. If the Euro does not rebound off these lows it could lose another two cents and decline to the major weekly Fibonacci .618 retracement at 1.2315 (as measured between the weekly 2005 low of 1.1661 and the weekly December high of 1.3373). Near term resistance is at the weekly December high of 1.3373. Further resistance is at the 2004 all-time high of 1.3687. If the Euro hits a new high it could test the psychological 1.40 area. Open Interest is at the lowest level since mid-November. Seasonally, the Euro should drop sharply in January. Commercial interests are holding a huge net short position. Large traders are holding a near record size net long position. Small traders are holding a sizable net long position.

The March Euro currency/Swiss franc spread closed below the 18-day Moving Average for the first time since late October. It also made an overbalancing of price when it made the biggest correction off of a high since July. This could be a clue that the trend is changing. Also, in six out of the last eight years this spread made it's high or low for the year between the last trading week of December and the first two trading weeks of January. So the recent price action should be monitored carefully. Near term support is at the daily December low of .4883 premium Euro (the spread has not broken a previous month's low on the daily chart since September). More important support is at the weekly 18-bar Moving Average that it has not closed below in over a year. A close below this weekly 18-bar Moving Average could send the spread down to the weekly October low of .4654 in confluence with the current major weekly Fibonacci .382 retracement at .4638 (as measured between the weekly 2005 low of .4081 and the weekly December high of .4982). Near term resistance is at the current all-time high of .5027 on the daily chart. A breakout to new highs again could take this spread anywhere since it would enter uncharted territory once again.

The Japanese Yen finds near term support at the new contract low of .008439 followed by the weekly October low of .008414. If the market does not stabilize here it could hit the 2005 low of .008252. Further support is at the psychological .008000 mark. Near term resistance is at last week's high of .008555 (the March yen has made lower weekly highs for three out of the last four weeks and lower weekly lows for five consecutive weeks) and the 18-day Moving Average it has not closed above for nearly a month. If the market breaks a previous week's high and closes back above the 18-day Moving Average it could rally to the current daily Fibonacci .618 retracement at .008699 (as measured between the daily December high of .008860 and the current contract low of .008439). Further resistance is at the daily December high of .008860. Open Interest is pretty high. The %R overbought/oversold indicator shows that the yen is near oversold on the daily, weekly, and monthly charts. The yen has a seasonal tendency to decline in January. Commercial interests are holding the smallest net long position since July. Large traders are holding the smallest net short position since then. Small traders are neutral on the yen.

Metals - February Gold was annihilated last week when it went from trading above a three week high to collapsing below a nine week low. Near term support is at last week's low of $603.00 in confluence with the current major daily Fibonacci .618 retracement at $601.40 (as measured between the October low of $568.00 and the December high of $655.50). Further support is at the monthly 18-bar Moving Average (gold has closed above the monthly 18-bar Moving Average every single month since August of 2001) followed closely by the daily October low of $568.00 (all-sessions). After that gold could hit the monthly June reaction low of $555.00 (all-sessions) followed closely by the major monthly Fibonacci .618 retracement at $548.80 (as measured between the 1999 mutli-decade low of $252.50 and the 2006 mutli-decade high of $732.00). Near term resistance is at last week's high of $647.30 (all-sessions) followed closely by the daily December high of $655.50. If these highs are exceeded February gold could surge to the current daily Fibonacci .618 retracement at $683.60 (as measured between the contract high of $755.00 and the contract low of $568.00) or even the daily July reaction high of $690.00 (all-sessions). Open Interest is at a six week high. The %R overbought/oversold indicator shows that gold is oversold on the daily chart. The Seasonal index shows that gold should rally for most of January. Commercials are holding the biggest net short position in three months. Large traders (hedge funds) are holding the largest net long position since September. Small traders are holding the largest net long position since the end of July.

March Silver rallied above a two week high and then reversed sharply to break below a nine week low. Near term support is at last week's low of $12.10. Further support is at a weekly Fibonacci .618 retracement at $11.255 (as measured between the weekly June correction low of $9.45 and the weekly December high of $14.18). If the market does not stabilize at this level it could hit the weekly September low of $10.415. Near term resistance is at last week's high of $13.285 (all-sessions). A strong close above last week's high could cause a run back up to the weekly December high of $14.18 or the daily December high of $14.37. Further resistance is at last year's weekly high of $14.97 (all-sessions). A strong close above fifteen bucks could send silver soaring to the psychological twenty dollar mark. Open Interest is at the lowest level since early October. The %R overbought/oversold indicator shows that silver is oversold on the daily chart. Seasonally, silver should move higher in January. Commercials are holding the biggest net short position since late April. Large traders (hedge funds) are holding the largest net long position since then. Small traders are neutral on silver.

March Copper has been in a severe decline over the last few weeks. Near term support is at last week's low of 252.00 (all-sessions). Further support is at the 2006 low of 200.25 followed by the major monthly Fibonacci .618 retracement at 196.20 (as measured between the 2001 low of 60.35 on the all-session monthly chart and the 2006 all-time high of 416.00 on the all-session monthly chart). Near term resistance is at last week's high of 287.10 (March copper have made lower weekly highs for four consecutive weeks) and the 18-day Moving Average it has not closed above for over a month. If the market breaks a previous week's high and closes back above the 18-day Moving Average look for it to challenge the current daily Fibonacci .382 retracement at 293.70 (as measured between the contract high of 361.20 and the current contract low of 252.00). Further resistance is at the current daily Fibonacci .618 retracement at 319.50 (as measured between the contract high of 361.20 and the current contract low of 252.00). Open Interest is still sitting flat at the lowest level since July of 2004. The %R overbought/oversold indicator shows that copper is oversold on the daily and weekly charts. Copper has a seasonal tendency to move slightly higher in January. Commercials are holding a record size net long position. Large traders (hedge funds) are holding their large net short copper position in over four years. Small traders are holding the large net short position since April of 1989!

Energies - February Crude Oil finds near term support clustered between the contract low of $54.90 (all-sessions), the weekly November low of $54.86 (all-sessions), and a major monthly Fibonacci .382 retracement at $54.83 (as measured between the 2001 low of $16.70 on the all-session monthly continuous chart and the current all-time high of $78.40 on the all-session monthly continuous chart). Further support is at the psychological fifty dollar mark. If the market does not stabilize here it could plunge to a major monthly Fibonacci .618 retracement at $40.27 (as measured between the 2001 low of $16.70 on the all-session monthly continuous chart and the current all-time high of $78.40 on the all-session monthly continuous chart), the December 2004 correction low of $40.25 (all-sessions), and the 2003 high of $39.99 (old resistance). Near term resistance is at a minor daily Fibonacci .382 retracement at $61.39 (as measured between the daily December high of $65.40 and the current contract low of $54.90) in confluence with last week's high of $61.55. Further resistance is at the current major weekly Fibonacci .382 retracement at $63.85 (as measured between the all-time weekly high of $78.40 and the weekly October low of $54.86) and the weekly December high of $64.15. If the market makes a strong breakout above this resistance barrier expect a run to the current major weekly Fibonacci .618 retracement at $69.41 (as measured between the all-time weekly high of $78.40 and the weekly October low of $54.86). Open Interest is at a new all-time high. The %R overbought/oversold indicator shows that crude oil is oversold on the daily and weekly charts. The Seasonal index shows that crude oil should rally in the first half of January then move sideways for the second half of the month. Commercial interests are neutral on crude oil. Large traders are holding a small net long position. Small traders are neutral.

February Heating Oil finds near term support at last week's new contract low of 153.34. Further support is at the major monthly Fibonacci .382 retracement at 147.73 (as measured between the monthly 1999 low of 29.20 and the 2005 all-time high of 221.00). If heating oil can't establish support in this area it may be headed to the May 2005 correction low of 133.40. Near term resistance is at last week's high of 166.10 (February heating oil has made lower weekly highs for five consecutive weeks) and the 18-day Moving Average it has not closed above for over a month. If the market breaks a previous week's high and closes back above the 18-day Moving Average look for it to challenge a minor daily Fibonacci .618 retracement at 175.75 (as measured between the daily November high of 189.60 and the current contract low of 153.34). Further resistance is at the weekly December high of 186.11. Open Interest is still near an all-time high. The %R overbought/oversold indicator shows that heating oil is oversold on the daily and weekly charts. Seasonally, heating oil should decline in January. Commercial interests are holding the largest net long position in months. Large traders are holding the biggest net short position in a year. Small traders are neutral on heating oil.

February Natural Gas finds near term support at the current contract low of 6.000 in confluence with a major weekly Fibonacci .618 retracement at 5.960 (as measured between the 2006 weekly low of 4.050 and the weekly November high of 9.050). A break to new lows should take the market down to the psychological 5.000 mark. If natural gas does not stabilize here look for a drop to the 2006 weekly low of 4.050. Near term resistance is at last week's high of 6.450 (February natural gas has made lower weekly highs for seven out of the last eight 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 for nearly a month). If this market can take out a previous week's high and the 9-day Moving Average closes back above the 18-day Moving Average look for a run to the current minor daily Fibonacci .382 retracement at 7.169 (as measured between the daily November high of 9.060 and the current contract low of 6.000). Further resistance is at the current minor daily Fibonacci .618 retracement at 7.891 (as measured between the daily November high of 9.060 and the current contract low of 6.000). Open Interest is sitting flat. The %R overbought/oversold indicator shows that natural gas is oversold on the daily chart. Natural gas has a seasonal tendency to drop sharply in January. Commercial interests are still holding a record size net short position. Large traders are holding a new record size net long position. Small traders are holding their smallest net long position since February of 2003.

Meats - February Live Cattle finds near term resistance at last week's new contract high of 93.45. Further resistance is at the weekly September high of 94.80. If this his is taken out February cattle could run up to the weekly 2005 high of 97.12. Near term support is at last week's low of 91.50 (February cattle has made higher weekly lows for four weeks straight). Further support is found between the November and December lows of 87.77 and 88.00. If these lows are violated cattle could drop to the major daily Fibonacci .618 retracement at 86.72 (as measured between the contract low of 82.60 and the contract high of 93.45). A break below this support level could allow the market to decline to the current major weekly Fibonacci .618 retracement at 81.60 (as measured between this the 2006 weekly low of 73.45 and the weekly September high of 94.80). Open Interest hit a seven month high. The %R overbought/oversold indicator shows that cattle is near overbought on the daily and weekly charts. The Seasonal index shows that cattle should rally in January. Commercial interests are holding the biggest net long position since mid-June. Large traders are holding their smallest net long position since then. Small traders are still holding a sizable net short position.

March Feeders finds near term resistance at last week's high of 99.80. A strong close above it could allow the market to make a run for the current major daily Fibonacci .618 retracement at 103.85 (as measured between the contract high of 111.70 and the contract low of 91.15). Further resistance is at the contract high of 111.70. Near term support is at a daily Fibonacci .618 retracement at 94.45 in confluence with the daily December low of 94.35. Further support is clustered between the major monthly Fibonacci .382 retracement at 91.62 (as measured between the 1996 low of 46.15 and the 2005 all-time high of 119.75), the daily contract low of 91.15, and an intermediate monthly Fibonacci .618 retracement at 90.55 (as measured between the 2002 low of 72.52 and the 2005 all-time high of 119.75). If March feeders break down below this support area they could plummet to the psychological 80 area. Open Interest is at the highest level since September. The %R overbought/oversold indicator shows that feeders are near oversold on the weekly chart. Seasonally, feeders should move higher in the first week of January and then trade sideways for the rest of the month. Commercials are holding the biggest net long position on record. Large traders (hedge funds) are holding the biggest net short position in nearly three years. Small traders are holding the biggest net short position since early September.

February Lean Hogs find near term support between last week's low of 59.10 and the weekly October low of 58.35. If these lows are broken hogs could drop to the weekly 2006 low of 53.55. Further support is at a monthly Fibonacci .618 retracement at 49.75 (as measured between the 2002 low of 29.40 and the 2004 high of 82.70). Near term resistance is at last week's high of 61.35 (February hogs have made lower weekly highs for five out of the last six 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 for nearly two months). If this market can take out a previous week's high and the 9-day Moving Average closes back above the 18-day Moving Average look for a run to the current daily Fibonacci .618 retracement at 65.07 (as measured between the contract high of 68.75 and the current January low of 59.10). Further resistance is at the current daily Fibonacci .786 retracement at 66.67 (as measured between the contract high of 68.75 and the current January low of 59.10). Open Interest is at a two month low. The %R overbought/oversold indicator shows that hogs are oversold on the daily and weekly charts. Hogs have a seasonal tendency to move slightly higher in January. Commercials are holding a very large net short position. Large traders (hedge funds) sold off some of their huge net long position but they are still very bullish on hogs. Small traders are holding the smallest net short position since February.

Grains - March Soybeans find near term resistance at last week's high of $6.97 (all-sessions). Further resistance is at the contract high of $7.09 (all-sessions). A break out to new highs could send beans on up to the 2005 high of $7.574 on the weekly continuous chart. Further resistance is at the psychological eight dollar mark. Near term support is at the daily December low of $6.572. If the market breaks last month's low it could plummet to the current major daily Fibonacci .618 retracement at $6.186 (as measured between the contract low of $5.63 and the current contract high of $7.09) in confluence with the weekly May high of $6.17 (old resistance). Further support is at the contract low of $5.63. Open Interest is still very high. The %R overbought/oversold indicator shows that beans are near overbought on the weekly chart. The Seasonal index shows that soybeans should move lower in January. Commercial interests are holding the largest net short position since September 2005. Large traders are holding the biggest net long position since June 2005. Small traders are holding the largest net short position since July.

March Soy Meal finds near term resistance at last week's high of $198.40 (all-sessions) in confluence with the daily Fibonacci .618 retracement at $198.70. Further resistance is at the contract high of $206.00 (all-sessions) in confluence with the intermediate weekly Fibonacci .618 retracement at $206.60 (as measured between the weekly 2005 high of $238.00 and the weekly 2006 low of $155.80). A break out to new highs could send this market soaring to the weekly 2005 high of $238.00. Near term support is at the daily December low of $187.00. Further support is at the current major daily Fibonacci .618 retracement at $179.10 (as measured between the contract low of $162.50 and the October high of $206.00). Failure to establish support in this area could result in a drop to the contract low of $162.50 (all-sessions). Open Interest is at the lowest level since July. Seasonally, soy meal should move lower in January. Commercials are holding the largest net short position since June 2005. Large traders (hedge funds) are holding the biggest net long position since then. Small traders are holding the biggest net long position since May of 2004.

March Bean Oil finds near term resistance at last week's high of 29.84 (all-sessions). Further resistance is at the contract high of 30.25 (all-sessions). A break out to new highs could send March bean oil to a major weekly Fibonacci .786 retracement at 31.68 (as measured between the weekly 2004 high of 35.18 and the weekly 2005 low of 18.82). Near term support is at the daily December low of 28.04 in confluence with the current major daily Fibonacci .382 retracement at 27.97 (as measured between the contract low of 24.29 and the current contract high of 30.25). If the market does not stabilize here expect a decline to the current major daily Fibonacci .618 retracement at 26.57 (as measured between the contract low of 24.29 and the current contract high of 30.25). Further support is at the major weekly Fibonacci .382 retracement at 25.36 (as measured between the weekly 2005 low of 1882 and the weekly 2006 high of 29.40). Open Interest is at a two month low. The %R overbought/oversold indicator shows that bean oil is near overbought on the weekly chart. Bean oil has a seasonal tendency to move sideways in January. Commercial interests are holding the biggest net short position in four months. Large traders are holding the largest net long position since August. Small traders are holding the largest net long position since July 2005.

March Corn finds near term resistance at a double top between the December 28th high of $3.92 and the November 27th high of $3.934. Further resistance is at the major weekly Fibonacci .618 retracement at $4.092 (as measured between the 1996 high of $5.544 and the 2000 low of $1.74). If the market can make it past this level it may be destined to challenge the psychological five dollar mark. Near term support is at last week's low of $3.59. A break below it could cause a decline to the current major daily Fibonacci .382 retracement at $3.376 (as measured between the contract low of $2.48 and the contract high of $3.934) or the daily November low of $3.344. Further support is at the current major daily Fibonacci .618 retracement at $3.034 (as measured between the contract low of $2.48 and the contract high of $3.934). Open Interest is sitting flat near the all-time high. The %R overbought/oversold indicator shows that corn is near overbought on the weekly and monthly charts. The Seasonal index shows that corn should move sideways in January. Commercial interests are holding the largest net short position on record. Large traders are holding the biggest net long position in history. Small traders are holding a sizable net short position.

March Rice finds near term resistance between the December high of 10.520 (all-sessions) and the contract high of 10.580 (all-sessions). A break out to new contract highs could send rice to the 2004 weekly high of 11.320. Further resistance is at the psychological twelve cent mark. Near term support is at last week's low of 10.350 (March rice has only broken a previous week's low once in the last nine weeks). A break below a previous week's low could allow the market to test the December low of 10.040 (March rice has only broken a previous month's low once in the last four months). If the December low is violated March rice could be headed to the daily October low of 9.830 followed closely by the major daily Fibonacci .618 retracement at 9.790 (as measured between the August low of 9.300 and the contract high of 10.580). Open Interest is at an all-time high. The %R overbought/oversold indicator shows that rice is overbought on the daily and weekly charts. Seasonally, rice should establish a major seasonal high in late January. Commercial interests are holding the biggest net short position in three months. Large traders (hedge funds) are holding a modest size net long position. Small traders are holding the biggest net long position in four months.

March Oats find near term support at the December low of $2.554 (March oats have made higher monthly lows for eight out of the last nine months) followed closely by the current major daily Fibonacci .382 retracement at $2.514 (as measured between the August low of $1.896 and the contract high of $2.896). Further support is at the current major daily Fibonacci .618 retracement at $2.28 (as measured between the August low of $1.896 and the contract high of $2.896) in confluence with the daily October 23rd reaction low of $2.274. Near term resistance is at the December high of $2.8806. Further resistance is at the contract high of $2.896. After that March oats should challenge the weekly 1996 high of $2.96. If March oats can take out this high it could surge to the 1988 drought high of $3.93. Open Interest is at the highest level since mid-November. The %R overbought/oversold indicator shows that oats are still near overbought territory on the monthly chart. Oats have a seasonal tendency to decline in January. Commercials are holding the smallest net short position since the beginning of September. Large traders (hedge funds) are holding the smallest net long position in seven months. Small traders are holding the biggest net long position since the beginning of July.

March Wheat finds near term support between last week's three month low of $4.62 (all sessions) and the current daily Fibonacci .618 retracement at $4.58 (as measured between the August low of $3.95 and the contract high of $5.60). Further support is at the weekly May high of $4.33 (old resistance). If wheat does not stabilize here it could plummet to the August low of $3.95 followed closely by the major weekly Fibonacci .618 retracement at $3.87 (as measured between the 2004 low of $2.824 and last year's high of $5.56). Near term resistance is at last week's high of $4.992 in confluence with the current major daily Fibonacci .382 retracement at $4.994. Further resistance is at the December 26th reaction high of $5.214 in confluence with the current major daily Fibonacci .618 retracement at $5.226. If the rally does not end here March wheat could challenge the contract high of $5.600. Open Interest is at a two month high. The %R overbought/oversold indicator shows that wheat is oversold on the daily chart. The Seasonal index shows that wheat should move decline in January. Commercial interests are holding the smallest net long position since March of 2005. Large traders are holding the largest net long position in six months. Small traders are holding the smallest net short position since March.

Softs - March Coffee finds near term support at last week's low of 119.60 in confluence with the current major daily Fibonacci .382 retracement at 119.25 (as measured between the contract low of 101.85 and the contract high of 130.00) and followed closely by the December low of 118.50 on the monthly continuous chart (coffee has not broken a previous month's low on the monthly continuous chart since July). Further support is at the current major daily Fibonacci .618 retracement at 112.60 (as measured between the contract low of 101.85 and the contract high of 130.00) in confluence with the weekly 18-bar Moving Average that it has only closed below once since late July. Near term resistance is at the contract high of 130.00. Further resistance is at the 2005 high of 137.00 on the weekly continuous chart. If coffee clears the 2005 high it could hit the 1999 high of 145.00 very quickly. Open Interest is at a new all-time high. Seasonally, coffee should move sideways in January. Commercials are holding the biggest net short coffee position since February. Large traders (hedge funds) are holding the largest net long position since then. Small traders are still neutral on the coffee market.

March Cocoa finds near term resistance at last week's multi-month high of $1,696. Further resistance is located at the major monthly Fibonacci .382 retracement at $1,727 (as measured between the 2003 high of $2,420 and the 2004 low of $1,299) in confluence with the weekly July high of $1,732. If the rally does not end here March cocoa may hit the daily contract high of $1,792. Near term support is at last week's low the daily November low of $1,585. Further support is at the major daily Fibonacci .618 retracement at $1,533 (as measured between the contract low of $1,433 and last week's high of $1,696). If the decline does not end here March cocoa may hit the contract low of $1,433. If March cocoa hits a new contract low it could hit the August low of $1,380 on the weekly continuous chart. Open Interest is at a two month high. Cocoa has a seasonal tendency to trade in a choppy range in January. Commercials are holding a moderate size net short position. Large traders are holding a small net long position. Small traders are neutral on cocoa at the moment.

March Sugar finds near term resistance support at last week's low of 11 cents. Further support is at the contract low of 10.66. A break to new contract lows could send March sugar spiraling down to match the weekly September low of 9.70. Near term resistance is located at the December high of 12.45 (March sugar has made lower monthly lows for eight out of the last nine months and lower monthly highs for seven out of the last eight months). Further resistance is at the daily September high of 13.40 followed by the major daily Fibonacci .382 retracement at 13.67 (as measured between the contract high of 18.54 and the contract low of 10.66). If the market does not stop here it could rally to the daily August high of 15.43 followed closely by the major daily Fibonacci .618 retracement at 15.53 (as measured between the contract high of 18.54 and the contract low of 10.66). Open Interest hit a new all-time high again. The %R overbought/oversold indicator shows that sugar is oversold on the daily chart. The Seasonal index shows that sugar should decline sharply in the first week of January and then move slightly higher for the rest of the month. Commercials are still holding the smallest net short position since June of 2005. Large traders (hedge funds) have continued to hold the smallest net long position since then. Small traders are neutral.

March Orange Juice finds near term support at the daily December low of 194.40 (March OJ has only broken a previous month's low once in the last eleven months). Further support is at the current daily Fibonacci .618 retracement at 180.00 (as measured between the daily October correction low of 163.50 and the current contract high of 206.75). Failure to stabilize here could send the market down to the daily October correction low of 163.50. If the decline does not end here OJ could test the monthly 18-bar Moving Average around 152.60 (OJ has not closed below the monthly 18-bar Moving Average since July of 2004). Near term resistance is at the contract high of 206.75. A breakout past this barrier could launch the market to the psychological 2.25 mark in a short amount of time. Open Interest is at a multi-month low. The %R overbought/oversold indicator shows that OJ is still overbought on the weekly and monthly charts. Seasonally, OJ should rally from early January to early February. Commercials are holding the smallest net short position since April. Large traders are holding their smallest net long position since July. Small traders are neutral to bullish on OJ.

March Cotton finds near term support at last week's low of 53.82. Further support is at the current daily Fibonacci .618 retracement at 53.19. If March cotton does not stabilize in this area it could decline all the way back to the contract low of 50.81. Further support is at the weekly November low of 46.50. Near term resistance is found between the December high of 57.05 and the current daily Fibonacci .618 retracement at 57.51 (as measured between the daily June high of 61.65 and the contract low of 50.81). Further resistance is at a major weekly Fibonacci .382 retracement at 58.35 (as measured between the weekly 2003 high of 84.80 and the weekly 2004 double bottom low of 42 cents). If the market does not slow down here it could challenge the weekly 2005 high of 60.50. Open Interest is now back up to the highest level since mid-November. Cotton has a seasonal tendency to trade in a sideways choppy range in January. Commercials are holding a large net long position in cotton. Large traders (hedge funds) covered just a fraction of their huge net short position. Small traders remain 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.

© 2007 Pearce Financial, LLC
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