You would then want to risk to new lows after entry. Be prepared to manage your risk in such a way as to be able to take a few swings at the market since it sometimes takes a few tries to catch the reversal low. Also, if the market closes below the monthly 18-bar Moving Average, assume we are in a bear market and trade from the short side. This market looks really vulnerable right here as it is now trading below an important up trend line on the monthly chart (as drawn across the 2003 low of 788.50 and the 2006 low of 1219.00). This trend line offered strong support to the market when it tagged the trend line last August during the sub-prime crisis and once again in November. This time, the market did NOT bounce off the trend line.

It crashed right thru it! Traders should be on high alert. Near term support is at last week's low of 1418.00 (all-sessions). Further support is at the weekly November low of 1406.30. A break below this level could cause a decline to the weekly August low of 1375.00 (all-sessions) followed closely by last year's weekly low of 1364.00 (all-sessions). If last year's low is taken out the market is vulnerable to a bigger drop to the monthly Fibonacci .382 retracement at 1273.60 (as measured between the 2002 bear market low of 767.50 and last year's high of 1586.50). If the S&P 500 were to trade at this level it would be nearly 20% off of this year's high and most likely in the midst of a “crash”-type environment. This would put the market in extremely oversold territory where it could turn on a dime and establish an ideal buying low, or at least a substantial bear market rally.

Near term resistance is located between the current major daily Fibonacci
.618 retracement at 1528.00 (as measured between the contract high of 1597.10 and the daily November low of 1416.20) and the daily December high of 1536.50 (all-sessions). A breakout above it could allow the market to challenge the all-time weekly high of 1586.50 followed by the contract high of 1597.10 (all-sessions). A strong close above 1600 could keep the momentum going and take it up toward the 1700 level. Open Interest is at a five and a half year low. Seasonally, the S&P 500 should move sideways to slightly higher in January. Commercials are holding the biggest net short position since April. Large traders (hedge funds) are holding the smallest net short position in six months. Small traders are holding the biggest net long position since September.

The March NASDAQ 100 finds near term support clustered between the weekly November low of 1983.00 (all-sessions), the minor weekly Fibonacci .618 retracement at 1982.30 (as measured between the weekly August correction low of 1813.00 and the weekly 2007 high of 2256.25), and last week's low of 1976.00 (all-sessions). If this support zone is broken the NASDAQ 100 could drop to the weekly August correction low of 1813.00 (all-sessions). A break below the August lows could send the NASDAQ 100 plummeting to last year's low of 1704.75. Near term resistance is at the weekly December reaction high of 2165.00 (all-sessions). A breakout above it could easily allow the market to test the weekly 2007 high of 2256.25 (all-sessions). A breakout above last year's high could send the market soaring to the major monthly Fibonacci .382 retracement at 2357.50 (as measured between the 2000 all-time high of 4882.00 and the 2002 low of 797.00). Further resistance is at the psychological 3000 mark. Open Interest is at a seven year low. The NASDAQ 100 should rally in January. Commercial interests are holding the smallest net long position since March. Large traders (hedge funds) are holding a pretty small net short position. Small traders are holding a their biggest net long position since June.

Interest rates - March T-bonds March Treasury bonds find near term resistance at last week's high of 118-18 (all-sessions). Further resistance is located between the contract high of 119-14 and the 2005 high of 119-30. If bonds break thru this barrier there will nothing to stand in it's way from challenging the 2003 all-time high of 124-10. Near term support is found between the current major weekly Fibonacci .382 retracement at 113-28 (as measured between the 2007 weekly low of 104-31 and the 2007 weekly high of 119-12) and the December reaction low of 113-13 (T-bonds have made higher monthly lows for six consecutive months). A break below last month's low could pressure bonds back down to the major weekly Fibonacci .618 retracement at
110-15 (as measured between the 2007 weekly low of 104-31 and the 2007 weekly high of 119-12) followed closely by the October reaction low of 110-02. Open Interest is at moderate levels. The %R overbought/oversold indicator shows that bonds are nearing overbought territory on the weekly and monthly charts. T-bonds have a seasonal tendency to move sideways in January. Commercial interests are holding their biggest net long position since mid-October. Large traders are holding their biggest net short positions since then. Small traders are holding a small net short position.

March T-Notes find near term resistance at last week's multi-year high of 115-07.5 (all-sessions). Further resistance is at the 2004 high of
117-31 (all-sessions). If this high is exceeded the market could test the
2003 all-time high of 121-03 (all-sessions). Near term support is found at the December reaction low of 111-16 (T-notes have made higher monthly lows for five out of the last six months) and the weekly 18-bar Moving Average (T-notes have not closed below the weekly 18-bar Moving Average since July).
If this support level is breached, the market could pull back to the current major weekly Fibonacci .618 retracement at 108-11.5 (as measured between the
2007 weekly low of 104-04 and the 2007 weekly high of 115-07.5) followed closely by the October reaction low of 108-06.5 (all-sessions). Open Interest is at the lowest level since the summer of 2006. The %R overbought/oversold indicator shows that T-notes are overbought on the daily, weekly and monthly charts. T-notes have a seasonal tendency to rally in the first half of January and then decline in the second half of the month. Commercials are holding their smallest net short position in months.
Large traders (hedge funds) are holding their smallest net long position since June. Small traders are holding their smallest net short position since late March.

International Bonds - March Canadian 10-year Bonds find near term resistance at last week's high of 116.06. Further resistance is at the weekly 2007 high of 116.69. A trade above last year's high could keep the market moving toward the 2005 all-time high of 117.78. Near term support is located between the weekly 18-bar Moving Average (CGBs have only closed below the weekly 18-bar Moving Average one time since July), the December reaction low of 113.90 (CGBs have made higher monthly lows and higher monthly highs for five out of the last six months), and the current major weekly Fibonacci .382 retracement at 113.69 (as measured between the 2007 weekly low of 108.83 and the 2007 weekly high of 116.69). If support is not established in this area it could case a decline to current major weekly Fibonacci .618 retracement at 111.83 (as measured between the 2007 weekly low of 108.83 and the 2007 weekly high of 116.69).

March Euro Bunds find near term resistance at last week's nearly one month high of 115.01 (all-sessions). Further resistance is at the contract high of 116.33 (all-sessions). A strong breakout to new contract highs could allow bunds to launch an assault on the late 2006 weekly reaction high of 118.88
(all-sessions) in confluence with the major weekly Fibonacci .618 retracement at 118.89 (as measured between the 2005 weekly high of 124.60 and the weekly 2007 low of 109.66). Near term support is at the December reaction low of 112.60 (all-sessions). A break below last month's low could cost bunds another full point and send them to the weekly October reaction low of 111.54 (all-sessions). Further support may not be found again until the weekly 2007 low of 109.66.

March long gilts find near term resistance at the major weekly Fibonacci .618 retracement at 111.05 (as measured between the weekly 2006 high of 116.08 and the weekly 2007 low of 102.90) in confluence with last week's one and a half year high of 111.11 (all-sessions). Further resistance is at the major weekly Fibonacci .786 retracement at 113.26 (as measured between the weekly 2006 high of 116.08 and the weekly 2007 low of 102.90). Near term support is at last week's low of 109.81 (gilts have made higher weekly lows and higher weekly highs for three consecutive weeks). Further support is at the December reaction low of 107.99 (all-sessions) in confluence with the current major weekly Fibonacci .382 retracement at 107.97 (as measured between the 2007 weekly low of 102.90 and last week's high of 111.11). If gilts do not stabilize in this area they could decline to the October reaction low of 106.04 (all-sessions) in confluence with the current major weekly Fibonacci .618 retracement at 106.04 (as measured between the 2007 weekly low of 102.90 and last week's high of 111.11).

March Australian 10-year Bonds signaled a trend change last week when it broke a previous week's high for the first time since late November and close above the 18-day Moving Average for the first time in a month. If the market can clear last week's high of 94.005 it could race back up to the weekly November reaction high of 94.23. A breakout above this high could send the market to last year's weekly high of 94.405. Near term support is at the contract low of 93.58. A break to new lows could pressure Aussie bonds down to the 2002 low of 93.40. After that there no prior lows to offer support until the 2000 low of 92.63.

March JGB's March JGBs (Japanese gov't. bonds) find near term resistance at last week's high of 137.39. A strong close above it could allow the market to test last year's weekly high of 137.90. If last year's high is exceeded, JGBs could run to the major monthly Fibonacci .618 retracement at 139.57 (as measured between the 2003 all-time high of 145.04 and the 2006 and 2007 double bottom low of 130.71). Near term support is located between the weekly 18-bar Moving Average (JGBs have not closed below the weekly 18-bar Moving Average since July) and the weekly December reaction low of 135.90 (JGBs have made higher monthly lows for five out of the last six months). A break below this support could cause a decline to the current weekly Fibonacci .382 retracement at 135.17 (as measured between last year’s weekly low of 130.76 and the weekly 2007 high of 137.90). After that JGBs could try to drift down to the weekly October reaction low of 134.15.

Currencies - The US Dollar Index finds important support at the current contract low of 74.80. Further support is at last year's all-time low of 74.50 on the weekly chart. If the greenback breaks down to new lows again it may erode to the psychological 70 cent level. Near term resistance is at the weekly 18-bar Moving Average (the US dollar index has only closed above the weekly 18-bar Moving Average one time during the second half of
2007) and the weekly December reaction high of 77.86. If the greenback can take out this resistance area it could explode to the intermediate weekly Fibonacci .618 retracement at 81.14 (as measured between the 2007 weekly high of 85.25 and the weekly 2007 low of 74.50) and the major weekly Fibonacci .382 retracement at 81.39 (as measured between the 2005 weekly high of 92.53 and the weekly 2007 low of 74.50). Open Interest has been hanging around at roughly the same level since September. The %R overbought/oversold indicator shows that the greenback is oversold on the weekly and monthly charts. The Seasonal index shows that the dollar should be in a choppy range with an upward bias in January. Commercial interests are holding the largest net short position in eleven months. Large traders are holding the largest net short position since last February. Small traders are the most bullish on the greenback that they've been since October of 2006.

The Canadian Dollar finds near term resistance at the current major daily Fibonacci .382 retracement at 1.0245 (as measured between the contract high of 1.1037 and the daily December low of .9755) in confluence with the daily December high of 1.0259 (all-sessions). If the "looney" can make it past this barrier it could fly to the current major daily Fibonacci .618 retracement at 1.0547 (as measured between the contract high of 1.1037 and the daily December low of .9755). Further resistance may not be found again until the contract high of 1.1037 (all-sessions). Near term support is at the daily December low of .9755 (all-sessions). A break below it could send the market down to the intermediate weekly Fibonacci .618 retracement at
.9426 (as measured between the weekly 2007 low of .8427 and the weekly 2007 high of 1.1043). If the "looney" cannot recover from this level it ma be on it's way back to the psychological 90 cent area or the 1991 high of .8906 (old resistance). Open Interest is at the lowest level since the summer of 2006. Seasonally, the Canadian dollar should decline in January.
Commercial interests are holding their smallest net short position since May. Large traders are holding their smallest net long position since then.
Small traders are holding a moderate size net long position.

The Australian Dollar finds near term resistance between last week's high of .8807 (all-sessions), the current major daily Fibonacci .382 retracement at .8815 (as measured between the contract high of .9311 and the daily December low of .8508), and the daily December high of .8862 (all-sessions). Further resistance is at the current major daily Fibonacci
.618 retracement at .9004 (as measured between the contract high of .9311 and the daily December low of .8508). A strong close above 90 cents could send the Aussie soaring to the contract high of .9311 (all-sessions). Near term support is at the daily December low of .8508 (all-sessions). A break below last month's low could cause a further sell off to the intermediate weekly Fibonacci .618 retracement at .8321 (as measured between the weekly August low of .7665 and last year's weekly high of .9382). Further support is at the psychological 80 cent mark. Open Interest is at a three and a half month low. Seasonally, the Australian dollar has a tendency to trade in a choppy fashion in January. Commercials are holding their smallest net short position since August. Large traders (hedge funds) are holding their smallest net long position since then. Small traders are holding a very small net long position and have remained neutral for months.

The British Pound near term support between last week's low of
1.9634 (all-sessions) and the major weekly Fibonacci .382 retracement at
1.9575 (as measured between the weekly 2005 low of 1.7046 and last year's weekly high of 2.1138). Further support is at last year's weekly low of
1.9183 (all-sessions) in confluence with the weekly August 2006 high of
1.9161 (old resistance). If last year's low is broken the market may decline to the major weekly Fibonacci .618 retracement at 1.8609 (as measured between the weekly 2005 low of 1.7046 and last year's weekly high of 2.1138). Near term resistance is at last week's high of 2.0061 (the March British pound has only broken a previous week's high once in the last five weeks) and the 18-day Moving Average (sterling has closed above the 18-day Moving Average only one time in nearly two months). If the market can break above a previous week's high and close above the 18-day Moving Average it may snap out of the down trend and immediately rally up to the current major daily Fibonacci .382 retracement at 2.0178 (as measured between the contract high of 2.1058 and the current low of 1.9634). If the market does not stop here look for a rally to the current major daily Fibonacci .618 retracement at 2.0514 (as measured between the contract high of 2.1058 and the current low of 1.9634). Open Interest is at the lowest level since June of 2006. The %R overbought/oversold indicator shows that sterling is oversold on the daily and weekly charts. The pound has a seasonal tendency to decline in January. Commercials are holding a net long position for the first time since the Spring of 2006. Large traders (hedge
funds) are net short for the first time since then. Small traders are holding the largest net short position since April of 2006.

The Swiss Franc challenged the daily Fibonacci .618 resistance level last week. A breakout above last week’s high of .9109 (all-sessions) could allow the market to test the contract high of .9229 (all-sessions). If the March Swiss franc can breakout to new contract highs it could rally up to the psychological 95 cent area. Near term support is at the weekly 18-bar Moving Average (the Swissie has not closed below the weekly 18-bar Moving Average since mid-June) followed by the December reaction low of .8641 (all-sessions). A break below last month's low could cause a decline to the
2006 weekly old double top between .8421 and .8428 (old resistance level).
Open Interest is at the lowest level since mid-September. The %R overbought/oversold indicator shows that the Swissie is overbought on the weekly and monthly charts. The Seasonal index shows that the Swiss franc usually erodes in January. Commercial interests are the most bullish on the Swissie that they have been in three months. Large traders are holding a relatively small net short position. Small traders are holding a moderate size net long position.

The Euro Currency near term resistance at last week’s high of 1.4830 (all-sessions). Further resistance is at the all-time high of 1.4980 (all-sessions). A strong close above the psychologically important 1.50 mark could cause the Euro to gain another 5-10 cents rather quickly. Near term support is at the weekly 18-bar Moving Average (the Euro has closed below the weekly 18-bar Moving Average only one time since the beginning of
June) followed by the December reaction low of 1.4323 (all-sessions).
Further support is at a minor weekly Fibonacci .618 retracement at 1.3984 (as measured between the weekly August reaction low of 1.3370 and last year's weekly all-time high of 1.4977). Open Interest is at a one year low.
The %R overbought/oversold indicator shows that the Euro is overbought on the daily, weekly and monthly charts. Seasonally, the Euro should be headed lower in January. Commercial interests are holding the smallest net short position since October of 2006. Large traders are holding the smallest net long position since then. Small traders are also holding the smallest net long position since then.

The Japanese Yen finds near term resistance at last week’s high of
.009337 (all-sessions) followed closely by last years weekly high of .009350 (all-sessions). Further resistance is found between the contract high of
.009444 (all-sessions) and the psychological .009500 area. If the yen breaks thru this price zone it could be headed toward the 2005 monthly high of .009864 (all-sessions). Near term support is at the current minor daily Fibonacci .618 retracement at .009000 (as measured between the December low of .008792 and last week’s high of .009337). Further support is at the daily December low of .008792 (all-sessions). A break below last month's low could hammer the yen down to the current major weekly Fibonacci .618 retracement at .008569 (as measured between the 2007 weekly low of .008087 and the 2007 weekly high of .009350). Open Interest is at the lowest level since mid-September. The %R overbought/oversold indicator shows that the yen is overbought on the weekly chart. The yen has a seasonal tendency to move lower in January. Commercial interests are holding the smallest net short position in two months. Large traders are holding the smallest net long position in two months. Small traders are holding a small net long position.

Metals - Gold near term resistance at the new nearly twenty-eight year high of $872.90 (all-sessions). Further resistance is at the psychological $900 level. If the rally does not end here gold just might be bent on tagging the $1,000 mark. Near term support is at last week's low of $833.00 (February gold has made higher weekly lows for three out of the last four weeks). Further support is at the December low of $783.00 (gold has only broken a previous month's low once in the last six months). After that gold may not find technical support until the current major daily Fibonacci .618 retracement at $742.30 (as measured between the contract low of $661.50 and the current contract high of $872.90). Open Interest is at a new all-time high. The %R overbought/oversold indicator shows that gold is overbought on the daily, weekly and monthly charts. The Seasonal index shows that gold should move higher thru most of January and establish a major seasonal high at the end of the month. Commercials are holding a near record size net short position. Large traders (hedge funds) are holding a record size net long position. Small traders are holding a neutral net long position.

Silver near term resistance at last week’s multi-week high of
$15.57 (all-sessions). Further resistance is at the contract high of
$16.445 (all-sessions). A breakout to new contract highs could catapult March silver up to the psychological twenty dollar level. Near term support is at the current minor daily Fibonacci .618 retracement at $14.375 (as measured between the December low of $13.64 and last week’s high of $15.57).
Further support is at the daily December low of $13.64 (all-sessions) followed closely by the monthly 18-bar Moving Average near $13.42 (silver has only closed below the monthly 18-bar Moving Average a few times in the last four and a half years). If silver does not establish support in this area it may plunge to the major daily Fibonacci .786 retracement at $12.56 (as measured between the contract low of $11.50 and the contract high of $16.445). Open Interest is at a new all-time high. The %R overbought/oversold indicator shows that silver is overbought on the daily, weekly and monthly charts. Seasonally, silver should move sharply higher in January. Commercials are holding the largest net short position since April. Large traders (hedge funds) are holding the biggest net long position since then. Small traders are neutral on silver.

Copper near term resistance between the current major daily Fibonacci .382 retracement at 319.60 (as measured between the contract high of 375.00 and the contract low of 285.30) and last week’s multi-week high of 323.50 (all-sessions). Further resistance is at the current major daily Fibonacci .618 retracement at 340.75 (as measured between the contract high of 375.00 and the contract low of 285.30). If March copper can make it past this hurdle it might be able to challenge a big technical price barrier between the contract high of 375.00 (all-sessions), the weekly October high of 378.00 (all-sessions), the weekly July high of 378.70 (all-sessions), and the weekly May high of 379.50 (all-sessions). Near term support is at the contract low of 285.30 (all-sessions). A break to new lows could send the market spiraling down to the 2007 low of 238.50. Further support may not be found until the psychological two dollar mark. Open Interest is sitting flat at the lowest level since September. Copper has a seasonal tendency to trade sideways in January. Commercials are holding the biggest net long position since August. Large traders (hedge funds) are holding the biggest net short position since July. Small traders are holding a small net short position.

Energies - Crude Oil near term resistance at last week's new all-time high of $100.09 (all-sessions). Further resistance is at the psychological $110 mark. Near term support is at last week's low of $94.73 (February crude oil has made higher weekly lows for four consecutive weeks).
Further support is at the current daily Fibonacci .382 retracement at $87.85 (as measured between the August low of $68.05 and the current contract high of $100.09). If this retracement does not support the market it may decline to the current daily Fibonacci .618 retracement at $80.29 (as measured between the August low of $68.05 and the current contract high of $100.09) or even the monthly 2006 high of $78.40 (old resistance). Open Interest is at the lowest level since April. The %R overbought/oversold indicator shows that crude oil is overbought on the daily, weekly and monthly charts. The Seasonal index shows that crude oil should tread water in January.
Commercial interests are holding the biggest net short position since last Summer. Large traders are holding the biggest net long position in two months. Small traders have remained neutral on crude oil.

Heating Oil  near term resistance at last week's new all-time high of 274.75 (all-sessions). Further resistance is at the psychological 300 level. If the market does not slow down here it may even set it's sights on the psychological 400 level. Near term support is at last week's low of 262.24 (February heating oil has made higher weekly lows for four consecutive weeks). Further support is at the current daily Fibonacci .382 retracement at 246.38 (as measured between the August low of 200.48 and the current contract high of 274.75) followed by the daily December low of
244.05 (all-sessions). If the market does not stabilize in this area it could slip to the current daily Fibonacci .618 retracement at 228.85 (as measured between the August low of 200.48 and the current contract high of 274.75). Open Interest is at the lowest level since Memorial Day. The %R overbought/oversold indicator shows that heating oil is overbought on the daily, weekly and monthly charts. Seasonally, heating oil should decline in January. Commercial interests are holding a substantial net short position.
Large traders are holding a near record net long position. Small traders are holding the smallest net long position since May.

Natural Gas finds near term resistance at last week's high of 7.980 (all-sessions). Further resistance is at the current intermediate daily Fibonacci .618 retracement at 8.262 (as measured between the daily November reaction high of 9.073 and the contract low of 6.951). If the market can get past this retracement it may be inclined to test last year's weekly high of 8.712 (all-sessions). Further resistance is at the November 2006 weekly high of 9.049 (all-sessions). Near term support is at the contract low of
6.951 (all-sessions). A break to new lows could pull February natural gas down to the psychological 6.000 area. Further support is at last year’s weekly low of 5.192 (all-sessions). Open Interest is at the highest level in nearly a year. Natural gas has a seasonal tendency to trade lower in January. Commercial interests have increased the size of their record size net long position. Large traders have increased the size of their record size net short position. Small traders are holding the smallest net long position since the end of 2006.

Meats - Live Cattle finds near term resistance at last week's high of 96.92 (February cattle has only broken a previous week's high once in the last six weeks). Further resistance is at the December high of 97.90 (February cattle has made lower monthly highs and lower monthly lows for three consecutive months). After that the market might test the current major daily Fibonacci .618 retracement at 99.20 (as measured between the contract high of 102.10 and the current contract low of 94.50). If the rally does not end here it could be on it's way to challenge the contract high of 102.10. Near term support is at the current contract low of 94.50.
A break to new lows could cause a decline to the weekly December low of
90.75 or even the intermediate weekly Fibonacci .618 retracement at 90.12 (as measured between the weekly 2007 low of 85.05 and the weekly September high of 98.35). Further support is located between last year's weekly low of 85.05 and the major weekly Fibonacci .618 retracement at 84.70 (as measured between the weekly 2006 low of 73.45 and this year’s weekly high of 102.92). Open Interest is flat. The %R overbought/oversold indicator shows that cattle is oversold on the daily chart. The Seasonal index shows that cattle should rally in January. Commercial interests are holding the biggest net long position since April of 2006. Large traders are holding the smallest net long position since May of 2006. Small traders are holding a large net short position.

Feeders near term support at last week's new contract low of 102.75. Further support is located at the psychological one dollar mark.
If the market does not recover from this level it could decline to last year's weekly low of 92.10. Near term resistance is at last week's high of 107.70 (March feeders have only broken a previous week's high once in the last five weeks) and the 18-day Moving Average. A close above the 18-day Moving Average and a previous week's high could allow the market to run up to the current major daily Fibonacci .618 retracement at 110.15 (as measured between the contract high of 114.70 and the daily December low of 102.75).
A strong close above this retracement could result in a run to the contract high of 114.70. Open Interest is at a nine month high. The %R overbought/oversold indicator shows that feeders are oversold on the daily and weekly charts. Seasonally, feeders should trade sideways in January.
Commercials are holding the smallest net long position since September of 2006. Large traders (hedge funds) are holding the largest net long position in two years. Small traders are holding the biggest net short position since March of 2006.

Lean Hogs near term support at last week’s new contract low of 56.02. Further support is at the 2007 weekly low of 50.65 followed close by a major monthly Fibonacci .618 retracement at 49.75 (as measured between the
2002 monthly low of 29.40 and the 2004 monthly high of 82.70). A break below last year's low could do enough damage to send it down to the psychological 40-cent level. Near term resistance is at last week's high of 58.05. Further resistance is at the daily December high of 63.95. A breakout above last month's high could allow hogs to rally to the current major daily Fibonacci .618 retracement at 66.82 (as measured between the contract high of 73.50 and last week’s low of 56.02). If the rally doe not end here December hogs may launch an assault on the contract high of 73.50.
Open Interest reached a new all-time high. The %R overbought/oversold indicator shows that hogs are oversold on the daily chart. Hogs have a seasonal tendency to stay flat in January. Commercials are holding the biggest net long position since July. Large traders (hedge funds) are holding the biggest net short position since then. Small traders are still holding a very large net short position.

Grains - Soybeans near term resistance at the last week's new all-time high of $12.78 (all-sessions). Finally, it looks like the grain bulls mantra of "beans in the teens!" could become a reality. Here in uncharted territory, it would not be too hard for beans to set it's sights on psychological targets such as $13.00, $14.00, $15.00, etc. Near term support is at last week's low of $11.97 (March soybeans has made higher weekly lows for nine out of the last ten 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 over a month). If the market breaks a previous week's low and the 9-day Moving Average closes back below the 18-day Moving Average it could cause a trend reversal and send the market down to the current major daily Fibonacci .382 retracement at $11.7
1/4 (as measured between the August low of $8.31 1/2 and last week's new all-time high of $12.78) followed closely by the daily December low of
$10.85 3/4 (beans have only broken a previous month's low once in the last eight months). If this support level is breached beans could give back another dollar and drop to the current major daily Fibonacci .618 retracement at $10.02 (as measured between the August low of $8.31 1/2 and last week's new all-time high of $12.78) in confluence with the daily November low of $9.95 (all-sessions). Open Interest is at the lowest level in over three months. The %R overbought/oversold indicator shows that beans are overbought on the daily, weekly, and monthly charts. The Seasonal index shows that soybeans should edge slightly lower in January. Commercial interests are holding the largest net short position since mid-July. Large traders are holding a record size net long position. Small traders are holding the smallest net long position since September.

Soy Meal  near term resistance at last week's new contract high of $354.40 (all-sessions). Further resistance is at the weekly 2004 high of $378.50. A breakout to new all-time highs could lead this market right into the $400's. Near term support is at last week's low of $327.80 (March meal has made higher weekly lows for eight out of the last ten 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 two months). If the market breaks a previous week's low and the 9-day Moving Average closes back below the 18-day Moving Average it could cause a trend reversal and send the market down to the current intermediate daily Fibonacci .382 retracement at $305.70 (as measured between the August low of $227.00 and the current contract high of $354.40). Further support is at the December low of $285.00 (soy meal has only broken a previous month's low once in the last eight months). If meal doesn't recover from this level it could decline to the daily December low of $276.50 followed closely by the current intermediate daily Fibonacci .618 retracement at $275.70 (as measured between the August low of $227.00 and the current contract high of $354.40). Open Interest is at a two month low. The %R overbought/oversold indicator shows that meal is overbought on the daily, weekly, and weekly charts. Seasonally, soy meal should drop in January.
Commercials are holding a near-record size net short position. Large traders (hedge funds) are holding a near-record size net long position.
Small traders are also holding a near-record size net long position.

Bean Oil near term resistance at last week's new all-time high of 51.45 (all-sessions). Since the market is in un-charted territory, it could easily trade to the psychological sixty-cent mark or even the seventy-cent level. Near term support is at last week's low of 49.16 (March bean oil has made higher weekly lows for twelve out of the last thirteen
weeks) and the 18-day Moving Average. If the market breaks last week's low and closes below the 18-day Moving Average it could cause a swift correction and pull it down to the daily December low of 45.25 (bean oil has only broken a previous month's low once in the last nine months) in confluence with the current major daily Fibonacci .382 retracement at 45.28 (as measured between the August low of 35.30 and the current contract high of 51.45). Further support is at the current major daily Fibonacci .618 retracement at 41.47 (as measured between the August low of 35.30 and the current contract high of 51.45). Open Interest is at a two month low. The %R overbought/oversold indicator shows that bean oil is overbought on the daily, weekly and monthly charts. Bean oil tends to move sideways in January. Commercial interests are holding their biggest net short position since mid-July. Large traders are holding a huge net long position. Small traders have been holding the same size net long position for over four months.

Corn near term resistance at last week's new contract high of
$4.69 1/2 (all-sessions). Further resistance is at the psychological five dollar level. If the market keeps right on going after trading to five bucks, it could run to the 1988 drought high of $5.54 1/2. Near term support is at is at last week's low of $4.47 3/4 (March corn has made higher weekly lows for twelve consecutive 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 since mid-October). If the market breaks a previous week's low and the 9-day Moving Average closes back below the 18-day Moving Average it could cause a trend reversal and send the market down to the current major daily Fibonacci .382 retracement at $4.20 (as measured between the contract low of $3.40 and last week's new contract high of $4.69 1/2). Further support is at the current major daily Fibonacci
.618 retracement at $3.89 1/2 (as measured between the contract low of $3.40 and last week's new contract high of $4.69 1/2). Open Interest is at the highest level since April. The %R overbought/oversold indicator shows that corn is overbought on the daily, weekly and monthly charts. The Seasonal index shows that corn should trade sideways in January. Commercial interests are holding the biggest net short position since March. Large traders are holding the biggest net long position since then. Small traders are holding a sizable net short position.

Oats near term resistance at last week's new contract high of
$3.32 (all-sessions). Further resistance is at the psychological $3.50 mark. If the market does not slow down at that level it may challenge the
1988 drought high of $3.93. Near term support is at the current major daily Fibonacci .382 retracement at $3.00 1/2 (as measured between the July low of
$2.49 3/4 and the current contract high of $3.32) in confluence with last week's low of $2.99 1/4 (March oats made higher weekly lows for three out of the last four weeks). Last week was also an "outside bar" on the weekly chart, so a break below last week's low could cause a pull back to the current major daily Fibonacci .618 retracement at $2.81 (as measured between the July low of $2.49 3/4 and the current contract high of $3.32) or even the daily December low of $2.75 (all-sessions). If March oats cannot rebound from this retracement level they could slip down to the contract low of $2.49 3/4 (all-sessions). Open Interest is starting to rebound from a one year low. The %R overbought/oversold indicator shows that oats are overbought on the daily, weekly and monthly charts. Oats have a seasonal tendency to trade lower in January. Commercials are holding their biggest net short position since September. Large traders (hedge funds) are holding the smallest net long position since October of 2005. Small traders are holding the largest net long position since July.

Wheat near term resistance at the contract high of $10.09 1/2 (all-sessions). Further resistance is at the psychological eleven dollar level. A strong close above eleven bucks could even inspire a run to the psychological twelve dollar mark. Near term support is at last week's low of $8.77 1/4 in confluence with the weekly 18-bar Moving Average that it has only closed below once since last April. Further support is at the daily November low of $7.60 (all-sessions) in confluence with the 1996 spike high of $7.50 (old resistance). If wheat does not stabilize here it could plummet to the 2006 reaction high of $5.56 (old resistance). Open Interest is at the highest level since early August. The %R overbought/oversold indicator shows that wheat is overbought on the weekly and monthly charts.
The Seasonal index shows that wheat should be headed lower in January.
Commercial interests are holding the smallest net long wheat position in three months. Large traders are holding a small net long position. Small traders are holding the smallest net short position since November of 2006.

Softs - Coffee near term resistance at last week’s two and a half month high of 136.95. Further resistance is at last year's weekly high of 140.80. A breakout above this high could send coffee right on up to further price resistance located between the contract high of 144.60, the
1999 high of 145.00, and the major monthly Fibonacci .618 retracement at
147.15 (as measured between the 1997 all-time high of 318.00 and the 2001 multi-decade low of 41.50). Near term support is at last week's low of 130.20 (March coffee has made higher weekly lows for seven out of the last nine 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 since mid-November). Further support is at the current major daily Fibonacci .618 retracement at 127.85 (as measured between the November low of 122.25 and last week’s high of 136.95). If the market does not stabilize here it could drop to the November low of 122.25. Open Interest is at a two month high. The %R overbought/oversold indicator shows that coffee is nearing overbought on the daily, weekly, and weekly charts.
Seasonally, coffee should trade sideways to lower in January. Commercials are holding their biggest net short coffee position in several years. Large traders (hedge funds) are holding a near record size net long position.
Small traders are holding the largest net long position since the Summer of 2004.

Cocoa near term resistance at the December high of $2,147 (all-sessions). Further resistance is at the contract high of $2,174. A breakout to new contract highs could spike March cocoa up to last year's weekly high of $2,277. If this high is breached it could allow the market to challenge the 2003 high of $2,420 (all-sessions). Near term support is at last week's low of $2,026 (March cocoa has made higher weekly lows and higher weekly highs for six out of the last seven weeks). Further support is clustered between the current major daily Fibonacci .382 retracement at
$2,004 (as measured between the contract low of $1,772 and the December high of $2,147), the daily November high of $1,999 (old resistance), the daily October high of $1,999 (old resistance), and the monthly December low of
$1,995 (cocoa has not broken a previous month's low since August). If cocoa does not establish support in this area look for a decline to the major daily Fibonacci .618 retracement at $1,915 (as measured between the contract low of $1,772 and the December high of $2,147) or even the daily November low of $1,898. Open Interest is at a ten month high. The %R overbought/oversold indicator shows that cocoa is nearing overbought on the daily and monthly charts. Cocoa has a seasonal tendency to trade in a choppy range in January. Commercials are holding a near record size net short position. Large traders are holding a near record size net long position. Small traders are mildly bullish on cocoa.

Sugar near term support between the current major daily Fibonacci .618 retracement at 10.64 (as measured between the August low of
9.35 and last week's high of 11.44), last week's low of 10.62 (March sugar has made higher weekly lows for four 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 above the 18-day Moving Average every day for nearly a month). If the market breaks a previous week's low and the 9-day Moving Average closes back below the 18-day Moving Average it could send the market down to the current major daily Fibonacci .618 retracement at 10.15 (as measured between the August low of 9.35 and last week's high of 11.44).
A close below 10 cents could pressure the market down to the August low of
9.35 (all-sessions) or even the contract low of 9.22. A break to new lows could cause a decline to last year’s weekly low of 8.36 (all-sessions).
Near term resistance is at last week's high of 11.44 (all-sessions).
Further resistance is at the psychological 12 cent mark. If March sugar clears twelve cents, it may be able to run to the major weekly Fibonacci
.382 retracement at 12.70 (as measured between the 2006 weekly high of 19.73 and the 2007 weekly low of 8.36). Open Interest reached a new all-time high. The %R overbought/oversold indicator shows that sugar overbought on the daily and weekly charts. The Seasonal index shows that sugar should move lower in the first half of January and then go sideways for the remainder of the month. Commercials are holding a record net short position. Large traders (hedge funds) holding a record size net short position. Small traders are holding the biggest net long position in several years.

Orange Juice signaled a trend change last week when it broke the previous week's low and the 9-day Moving Average closed back below the 18-day Moving Average for the first time since late November. After taking out the previous week's high, the market reversed and took out the previous week's low. This is bearish price action as it created an outside reversal down on the weekly chart. Near term support is at last week's low of 135.65. If the market breaks last week's low it could trade down to the daily November low of 130.50 (all-sessions) in confluence with the current major daily Fibonacci .618 retracement at 130.25 (as measured between the contract low of 113.55 and the daily October high of 157.25). If this support level is broken look for a swift decline to the 2007 weekly low of 117.50. Near term resistance is at the daily December high of 153.25 (all-sessions). Further resistance is at the daily October high of 157.25 (all-sessions). If this high is exceeded March OJ may rally to the major weekly Fibonacci .618 retracement at 174.30 (as measured between the 2006 weekly high of 209.40 and the 2007 weekly low of 117.50). Open Interest is at a one year low. Seasonally, OJ should trade higher in the first half of January and then trade sideways for the rest of the month. Commercials are holding a sizable net short position. Large traders are holding a very large net long position. Small traders are neutral at the moment.

Cotton near term resistance at last week's one month high of
69.03 (all-sessions). Further resistance is at the September high of 70.50.
If this high is exceeded March cotton could test the contract high of 71.50 (all-sessions). If March cotton breaks out to new contract highs momentum could carry it toward the psychological 80 cent mark. Near term support is at last week's low of 67.35 (March cotton has made higher weekly lows and higher weekly highs for four consecutive weeks) and the 18-day Moving Average. If the market breaks a previous week's low and closes below the 18-day Moving Average it could cause a decline to the current minor daily Fibonacci .618 retracement at 65.24 (as measured between the December low of 62.90 and last week's high of 69.03). Further support is at the December low of 62.90 (all-sessions). A break below last month's low could send the market down to the 2005 weekly high of 60.50 (old resistance) in confluence with the current major weekly Fibonacci .382 retracement at 60.21 (as measured between last year's weekly low of 45.94 and last week's high of 69.03). Open Interest is at the highest level since early November. The %R overbought/oversold indicator shows that cotton is overbought levels on the daily, weekly, and weekly charts. Cotton has a seasonal tendency to move sideways in the first half of January and then go sideways for the remainder of the month. Commercials are holding a near-record size net short position. Large traders (hedge funds) are holding a near-record size net short position. Small traders are holding a moderate size net long position.

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.

© 2008 Pearce Financial, LLC
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