Replies to post #280923 on Zeev's Turnips Patch-No Politics (ZEEV)

[marketmaven]

BOP- You must be a very large bird with a bear suit - Pearce sees itself chasing its tail....Odd that large hedgies missed this melt.

Weekly Market Watch -The Future is in Futures
by Pearce Financial, LLC July 26 - July 30, 2004

Based on last week's trading activity & reports,
the following markets are setting up for potential trading opportunities.

Stock indices - The S&P 500 finds near term support at last week's two month low of 1082.20. Further support is at the May low of 1075.00 in confluence with a major daily Fibonacci .786 retracement at 1074.20. If the market does not stop here expect a decline to the major weekly Fibonacci .382 retracement at 1012.20. Near term resistance is at last week's high of 1116.00. (The S&P 500 has made lower weekly highs and lower weekly lows for the last four weeks). A rally above it could send the market up to the current minor daily Fibonacci .618 retracement at 1121.80. Further resistance is at the June high of 1146.20 in confluence with the April high of 1148.10. If the market does not stop here expect it to test the contract high of 1160.80. A break out to new highs could send the market right up to the weekly 2002 high of 1178.50. Open Interest is at a one month high. The %R overbought/oversold indicator shows that the S&P 500 is oversold on the daily chart. Seasonally, the S&P 500 should decline sharply in the second half of July. Commercials are still neutral. Large traders (hedge funds) are the least bearish in over ten months.

The NASDAQ 100 finds near term support between last week's four month low of 1371.50 and the weekly March low of 1369.00. Further support is at the September and October monthly lows of 1303.00 and 1306.00. If the NASDAQ 100 does not stabilize here expect a decline to the major weekly Fibonacci .382 retracement at 1268.80. Near term resistance is at the current daily Fibonacci .382 retracement at 1431.50 in confluence with last week's high of 1435.00 (the NASDAQ 100 has made lower weekly highs and lower weekly lows for three consecutive weeks). A rally above it could send the market up to the current daily Fibonacci .618 retracement at 1468.50 followed closely by a daily gap between 1476.00 and 1478.00. If the market can get thru this barrier it could test the June high of 1528.50. A break out above this high could take the market to the contract high of 1565.00 or the March 2002 reaction high of 1575.00. Open Interest is flat. The %R overbought/oversold indicator shows that the NASDAQ 100 is oversold on the daily and weekly charts. The NASDAQ 100 usually declines rapidly in the second half of July. Commercial interests are the least bullish since early March. Large traders are the most bullish in over five months.

Interest rates - T-bonds find near term resistance at last week's three and a half month high of 109-15. Further resistance is at the major daily Fibonacci .618 retracement at 109-28. If T-bonds can clear this retracement look for a rally to the major daily Fibonacci .786 retracement at 112-03 in confluence with an intermediate weekly Fibonacci .618 retracement at 112-06. Near term support is at the 18-day Moving Average that it has not closed below for a month and the July 13th reaction low of 107-14. A drop below it should take another point off of the market and send it to the current daily Fibonacci .382 retracement at 106-17. Further support is at the current daily Fibonacci .618 retracement at 104-24. If the market fails to stabilize here expect a drop to the daily June low of 102-28 or the contract low of 101-26. T-bonds find further support at the 2002 low of 97-16. The September NOB spread (T-notes vs. T-bonds) finds near term daily resistance at the daily Fibonacci .618 retracement at 2-01 premium T-notes in confluence with the current July high of 1-31 premium T-notes. Further resistance is at the daily Fibonacci .786 retracement at 1-12 premium T-notes. Near term daily support is at the current daily Fibonacci .382 retracement at 2-295 premium T-notes and the 18-day Moving Average that it has not closed below for a month. A break below it could pull the spread down to the current daily Fibonacci .618 retracement at 3-155 premium T-notes. Further support is at the June low of 4-01 premium T-notes followed by the spread contract low of 4-13 premium T-notes. Open Interest is flat. T-bonds have a seasonal tendency to decline until the end of July. Commercial interests are holding their smallest net long T-bond position in three and a half months. Large traders are still holding a large net short position.

T-notes find near term resistance at the current July high of 111-135. Further resistance is at the major daily Fibonacci .786 retracement at 112-175 followed by the major weekly Fibonacci .382 retracement at 112-28. Near term support is at last week's low of 110-015 and the 18-day Moving Average that it has not closed below for a month. A break below this short term support level could signal a short term trend change and send the market down to the current daily Fibonacci .382 retracement at 109-16. Further support is at the current daily Fibonacci .618 retracement at 108-10. If T-notes do not stabilize here expect a decline to the June low of 106-315 or the weekly chart objective of 106-16 (this price level would be achieved if the weekly T-note chart matches the eleven and a half point sell off that occurred from last summer's high to the low of the year) in confluence with the contract low of 106-13. After that the market could be headed for an intermediate monthly Fibonacci .618 retracement at 104-04 (as measured between the 2000 low of 93-215 and the all-time high of 121-01) or a major monthly Fibonacci .382 retracement at 103-225 (as measured between the 1987 crash low of 75-215 and the all-time high of 121-01). Open Interest is at a one month high. T-notes have a seasonal tendency to decline in July. Commercials are holding a record net long position. Large traders (hedge funds) are holding a record net short position.

International bonds - Canadian 10-year bonds find near term resistance at last week's new multi-month high of 109.06. (Canadian bonds have made higher weekly highs in five out of the last six weeks). Further resistance is at the weekly May high near 110.25. If the market does not stop here for it could be headed for the major weekly Fibonacci .618 retracement near the 110.80 level. Near term support is at last week's low of 107.99 (Canadian 10-year bonds have made higher weekly lows for four out of the last five weeks) and the 18-day Moving Average that it has not closed below for a month. A break below this short term support level could send the market down to the current major daily Fibonacci .618 retracement at 107.01. Further support is at the contract low of 105.74. Euro bunds rallied to a multi-month high and then reversed to drop below the previous week's low for the first time in five weeks. This created an outside reversal down on the weekly chart. The market also closed below the 18-day Moving Average for the first time since mid-June. This is very bearish for the bund market. Near term support at last week's low of 113.51. A break below this support level could pressure the market down to the major daily Fibonacci .618 retracement at 112.81. Further support is at the contract low of 111.81. Near term resistance is at last week's new multi-month high of 114.42. (Bunds have made higher weekly highs for six consecutive weeks). Further resistance is at the intermediate weekly Fibonacci .618 retracement near the 115.00 area. London gilts took out the previous week's high and then reversed and took out the previous week's low. This outside reversal down on the weekly chart is bearish for the market. The market also closed below the 18-day Moving Average for the first time in a month. All of these technical signs could indicate that the market is now beginning another leg down. Near term support at last week's new low for the month at 105.59. A break below is should send the market right down to the major daily Fibonacci .618 retracement at 105.26. If the market does not stabilize here expect a decline to the contract low of 104.43. Near term resistance is at a daily double top between last week's high of 106.59 and the current July high of 106.62. A break out above it could send gilts up to the weekly May high near 107.50. Australian 10-year bonds find near term resistance at last week's new multi-month high of 94.39. Further resistance is at the intermediate weekly Fibonacci .618 retracement at 94.44. If the market does not stop here it could run to this year's weekly high near 94.78. Near term support is at last week's low of 94.25 (Australian bonds have only broken a previous week's low once in the last five weeks) and the 18-day Moving Average that it has not closed below yet this month. Further support is at the current major daily Fibonacci .618 retracement at 94.105. If Aussie bonds do not stabilize here expect a decline to the contract low of 93.955. JGB's (Japanese gov't. bonds) closed below the 18-day Moving Average for the first time in nearly a month. If the market breaks below last week's low of 135.00 (JGB's have only broken a previous week's low once in the last five weeks) it could confirm a short term trend change and send the market down to the current major daily Fibonacci .618 retracement at 134.19. Further support is at the contract low of 133.16. Near term resistance is at a daily double top between last week's high of 135.81 and the current July high of 135.86. Further resistance is at the major daily Fibonacci .618 retracement around 136.85.

Currencies - The US dollar index dropped to a multi-month low and then reversed to take out a previous week's high for the first time in five weeks and test the current daily Fibonacci .382 retracement. This created an outside reversal up on the weekly chart. This is a bullish occurrence. Near term resistance is at last week's high of 89.52. Further resistance is at the current major daily Fibonacci .618 retracement at 90.67 followed closely by the daily June high of 90.77. After that the greenback could be headed for the daily May high of 92.81. Further resistance is at a weekly gap between 94.73 and 95.13. If the gap is filled the market may be headed to the major monthly Fibonacci .382 retracement at 98.72. Near term support is at last week's multi-month low of 87.20. Further support is at the major weekly Fibonacci .786 retracement at 86.42. A drop below it could take the market down to a support cluster between the contract low of 85.21, this year's weekly low of 84.77, or the 1996 low of 84.51. Open Interest is at a five month high. The Seasonal index shows that the dollar should have a downward bias in July. Commercial interests are holding the biggest net long position in five months. Large traders are holding the biggest net short position since the beginning of March.

The Canadian dollar finds near term resistance at the current July high of .7655 followed closely by the March high of .7669. After that look for the market to test the major weekly Fibonacci .786 retracement at .7707. Further resistance is at this year's weekly high of .7863. Near term support is at last week's low of .7527(the "looney" has only broken a previous week's low once in the last five weeks) and the 18-day Moving Average that it has not closed below for over a month. A break below this short term support level should cause a sell off to the current daily Fibonacci .382 retracement at .7451. Further support is at the current daily Fibonacci .786 retracement at .7234 in confluence with the June low of .7225. If the "looney" does not stabilize here look for a decline to the May low of .7120. Further support is at last summer's low of .7027. Open Interest is at a six week high. Seasonally, the Canadian dollar has a tendency to decline sharply for the rest of the month. Commercial interests are holding the biggest net short position in three and a half months. Large traders are holding the biggest net long position since the beginning of April.

The Australian dollar rallied to the highest level in nearly three months and then reversed to take out a previous week's low for the first time in five weeks and test the daily Fibonacci .382 retracement. This outside reversal down on the weekly chart is bearish for the Aussie. Near term resistance is at last week's high of .7304. A rally above it could keep this market on track for the major weekly Fibonacci .618 retracement at .7519 followed closely by the daily April high of .7550. Near term support is at last week's low of .7033. Further support is at the daily Fibonacci .618 retracement at .6945. If the market does not stabilize here look for a decline to the double bottom between the June low of .6730 and May low of .6723. A break below this double bottom could send the Aussie to the weekly September low of .6335. Open Interest is at a one month high. Commercials are holding the biggest net short position in three months. Large traders (hedge funds) are holding the biggest net long position in three months.

The Canadian dollar/Australian dollar finds near term resistance at the June high of .0588 (almost six cents) premium Canadian dollar. A break out above it could send the spread soaring to last year's weekly high of .0833 premium Canadian dollar in confluence with the major weekly Fibonacci .618 retracement at .0850 (eight and a half cents). This retracement was measured between the all- time weekly high of .1538 (just under fifteen and a half cents) premium Canadian dollar (established in 2001) and this year's low of .0262 (just over two and a half cents) premium Australian dollar (established in February). Near term support is found between the current major daily Fibonacci .382 retracement at .0275 (two and three quarter cents) and the May 27th reaction low of .0251 (about two and a half cents) premium Canadian dollar. Further support is at the current major daily Fibonacci .618 retracement at .0082 (just over three quarter cents) premium Canadian dollar.

The British pound took out the previous week's high and then reversed to take out the previous week's low. This outside reversal down on the weekly chart is bearish for sterling. Near term resistance is staggered between last week's multi-month high of 1.8683, the daily contract high of 1.8712, and the major weekly Fibonacci .786 retracement at 1.8745. If the market can conquer this gauntlet of resistance look for it to hit this year's high on the weekly chart at 1.9102. Near term support is at last week's low of 1.8216. A drop below it could allow the market to slip down to the current daily Fibonacci .382 retracement at 1.8155. Further support is at the June low of 1.7897 in confluence with the current daily Fibonacci .618 retracement at 1.7828. Further support is at the May low of 1.7300. If this low is broken sterling could get pounded to the monthly 18-bar Moving Average at 1.7107 (the pound has not closed below the monthly 18-bar Moving Average for two years) or the major weekly Fibonacci .382 retracement at 1.7020. Open Interest is at the highest level since mid-December. The pound has a seasonal tendency to rally sharply in July. Commercials are holding the biggest net short position since October of 1999. Large traders (hedge funds) are holding the biggest net long position since November of 1999.

The Swiss franc finds near term support at last week's one month low of .7894 in confluence with the June low of .7890. If the market does not stabilize here expect a decline to the current daily Fibonacci .618 retracement at .7827. Further support is at the monthly 18-bar Moving Average at .7680 (the Swissie has not closed below the monthly 18-bar Moving Average since January of 2002) or the monthly May low of .7634. Near term resistance is staggered between the current July high of .8209, the contract high of .8233, and the major monthly Fibonacci .786 retracement at .8278. If the Swissie can overcome this technical resistance barrier look for a run to the psychological 90 cent mark or the 1995 high of .9038. Open Interest is declining again. The %R overbought/oversold indicator shows that the Swissie is almost oversold on the daily chart. The Seasonal index shows that the Swiss franc usually rallies in July. Commercial interests are holding the biggest net short position in over a year. Large traders are still holding the biggest net long position since October of 1999.

The Euro currency broke a previous week's low for the first time in five weeks. If the market drops below last week's low of 1.2077 look for a decline to the current major daily Fibonacci .618 retracement at 1.2002 or the June low of 1.1936. Further support is at the monthly 18-bar Moving Average at 1.1767 (the Euro has not closed below the monthly 18-bar Moving Average for over two years), the May low of 1.1744, and the April low of 1.1726. If the Euro does not find support here expect it to make it's way down to the intermediate weekly Fibonacci .618 retracement at 1.1406 or the weekly November low of 1.1365. Near term resistance is at the current July high of 1.2449 in confluence with the major weekly Fibonacci .618 retracement at 1.2471. Further resistance is at the major weekly Fibonacci .786 retracement at 1.2668. A rally above it may take the Euro up to the contract high of 1.2800 or even the all-time high of 1.2919. Open Interest is at the highest level since mid-June. Seasonally, the Euro should rally sharply in July.

The Japanese yen finds near term resistance at the July 12th reaction high of .009322 followed closely by last month's high of .009378. Further resistance is at the daily Fibonacci .786 retracement at .009500. A rally above it should send the market up to the contract high of .009705. Near term support is at last week's one month low of .009080. A drop below it should send the yen down to the daily Fibonacci .618 retracement at .008987 or the June low of .008967. Further support is at the May low of .008746. If the yen does not stabilize here look for a decline to the psychological .008500 level. Further support is at last summer's low of .008296 in confluence with the major weekly Fibonacci .618 retracement at .008286. Open Interest is at a one month high. The yen has a seasonal tendency to trade sideways and choppy in July. Commercial interests are neutral. Large traders are neutral.

Metals - August gold broke an up trend line on the daily chart and dropped to the lowest level in five weeks. Near term support is at last week's low of $387.40 in confluence with the major daily Fibonacci .618 retracement at $386.70 and followed closely by the June low of $383.00. If this support is broken look for a decline to the May low of $372.50. Further support is at the major weekly Fibonacci .382 retracement at $364.40 in confluence with the intermediate weekly Fibonacci .618 retracement at $362.40. If gold does not stabilize here expect a sell off to the major weekly Fibonacci .618 retracement at $322.60 in confluence with last year's low of $319.40. Near term resistance is at the current July high of $409.60 in confluence with the daily Fibonacci .618 retracement at $409.90. A rally above it should allow the market to test a gap on the daily chart between $417.50 and $419.30 or the daily Fibonacci .786 retracement at $420.10. If August gold can clear this resistance barrier look for a rally to the contract high of $433.00. Open Interest is declining again. The Seasonal index shows that gold should move sideways in July. Commercials are the most bearish in three months. Large traders (hedge funds) are the most bullish in three months.

September silver took out the previous week's high and then reversed to take out the previous week's low and test the daily Fibonacci .382 retracement. This weekly outside reversal down is bearish. A break below last week's low of $6.24 could send the market down to the current daily Fibonacci .618 retracement at $5.995. If the market closes below six bucks expect a drop to the June low of $5.63 or the monthly 18-bar Moving Average at $5.515 in confluence with the May low of $5.50. Further support is at the major monthly Fibonacci .618 retracement at $5.34. Near term resistance is at last week's nearly three month high of $6.78. After that the market will have to rally all the way to $6.96 in order to fill a big gap on the daily chart. If September can make it thru the gap it could test the major daily Fibonacci .618 retracement at $7.235. Open Interest is at a two and a half month high. Seasonally, silver should move slightly higher in July. Commercials are the most bearish since the beginning of May. Large traders (hedge funds) are the most bullish since late April.

September copper broke below a previous week's low for the first time in six weeks. A drop below last week's low of 123.20 could cause a decline to this month's current low of 119.50 in confluence with the current minor daily Fibonacci .618 retracement at 119.30. Further support is at the double bottom between the May low of 112.10 and the June low of 112.50. A break below it should send the market down to the major weekly Fibonacci .382 retracement at 109.40 or the intermediate daily Fibonacci .618 retracement at 108.45. Further support is at the psychological one dollar area. Near term resistance is at the current July high of 131.50. Further resistance is at the April high of 134.70 or the contract high of 136.40. A break out to new highs should send copper up to the 1995 high of 146.10 or the psychological $1.50 area. Open Interest is at a one and a half month high. Copper has a seasonal tendency to rally in July. Commercials are the most bearish in nearly three months. Large traders (hedge funds) are the most bullish in three months.

Energies - Crude oil finds near term resistance between the current contract high of $41.90 and the all-time weekly high of $42.38. A break out to new highs could send the market to psychological price resistance levels such as $50, $60, $70, etc. Near term support is at last week's low of $40.25 (crude oil has made higher weekly highs and higher weekly lows for three consecutive weeks) and the 18-day Moving Average that it has not closed below yet this month. Further support is at the current minor daily Fibonacci .618 retracement at $38.07. A break below it could send September crude oil down to the June low of $35.70. If this low is broken look for the market to decline to technical support staggered between the major weekly Fibonacci .382 retracement at $32.57, this year's low on the weekly chart at $32.20, the major daily Fibonacci .618 retracement at $31.81, and the daily April low of $31.80. Further support is at the major monthly Fibonacci .382 retracement at $30.14. Open Interest is flat. 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 move sideways in July. Commercial interests were the least bearish since early November but they started to sell into last week's rally. Large traders are the most bullish since Memorial Day.

August unleaded gasoline finds near term resistance at the contract high of 136.50. Further resistance is at the all-time weekly high of 147.00. If gasoline hits a new all-time high on the weekly chart it should be headed for psychological price barriers at 150.00, 160.00, 170.00, etc. Near term support is at last week's low of 122.80. A break below it should take the market right down to the current intermediate daily Fibonacci .618 retracement at 121.05. Further support is at the double bottom at June 29th reaction low of 111.65 in confluence with the June 9th reaction low of 111.50. If this double bottom is broken look for the market to tank and hit the major monthly Fibonacci .382 retracement at 102.92. The August/September spread hit a new low. This is a bearish sign for gasoline. Open Interest is flat. Seasonally, gasoline should establish an important seasonal low at the end of July. Commercials are the most bearish in six weeks. Large traders (hedge funds) are the most bullish in six weeks.

August natural gas dropped to a multi-week low and then reversed to take out a previous week's high. This created an outside reversal up on the weekly chart. This is bullish! Near term resistance is at last week's high of 6.22. Further resistance is at the current daily Fibonacci .618 retracement at 6.425 followed closely by the July 6th reaction high of 6.46. If the market can clear this retracement it could rally to the contract high of 6.825. Near term support is found between last week's nearly two month low of 5.77 and the April low of 5.70. A drop below it could send the market down to the major daily Fibonacci .618 retracement at 5.435 and the daily March low of 5.41. Further support is at this year's low on the weekly chart at 5.06. The August/September natural gas spread is trading near it's low. This is bearish. Open Interest is at a two month high. Natural gas has a seasonal tendency to establish an important seasonal low at the end of July. Commercial interests are net long for the first time in five months. Large traders are the most bearish in almost five months.

Meats - August live cattle finds near term resistance staggered between last week's high of 88.15, this month's current high of 88.25, and the daily Fibonacci .618 retracement at 88.70 . A rally above it could send August cattle to the June 24th reaction high of 90.25. Further resistance is at the contract high of 92.70. A break out to new contract highs could push August live cattle up to the major weekly Fibonacci .786 retracement at 97.00. Near term support is at the current July low of 82.25. A drop below it could pressure the market down to the major daily Fibonacci .618 retracement at 77.45. Open Interest picked up slightly. The Seasonal index shows that cattle should rally sharply in July. Commercials are the least bearish in three months. Large traders (hedge funds) are the least bullish in three and a half months.

August feeders find near term resistance at last week's new all-time high of 114.80. A break out above it should carry the market to psychological price levels at 115, 120, 125, etc. Near term support is at the July 16th reaction low of 107.70 in confluence with the July 1st reaction low of 107.50. A drop below it should take the market right down to the June 14th reaction low of 106.77. Further support is at last month's low of 104.57. If the June low is broken look for a drop to the major daily Fibonacci .382 retracement at 102.05. Open Interest is at a nine month high. The %R overbought/oversold indicator shows that feeders are overbought on the daily, weekly, and monthly charts. Seasonally, feeders should rally sharply in July. Commercial interests are holding the biggest net long position in three and a half months. Large traders are the least bullish in about three months.

August lean hogs find near term support at the July 16th reaction low of 73.00. Further support is at the May low of 70.90. A break below it could send hogs down to the current major daily Fibonacci .382 retracement at 69.37. Near term resistance is at the current daily Fibonacci .618 retracement at 77.15. A rally above it could allow August hogs to test the contract high of 78.25. A break out to new highs could allow hogs to run to this year's weekly high of 82.70. If the market can score new highs on the weekly chart it may begin a long journey towards the 1996 high of 90.17 or the 1990 high of 91.15. Open Interest is flat. Hogs have a seasonal tendency to rally sharply in the second half of July. Commercials are the least bearish in nearly five months. Large traders (hedge funds) are the least bullish in four months.

Grains - August soybeans broke below the major weekly Fibonacci .618 retracement last week! Near term support is at last week's nine month low of $6.574. A break it could take the market to the psychological six dollar level. Further support is at the major monthly Fibonacci .786 retracement at $5.432 followed closely by last year's monthly low of $5.32. Near term resistance is at a gap on the daily chart between $7.38 and $7.50 in confluence with the current intermediate daily Fibonacci .382 retracement at $7.386. If beans fill the gap they could rally to the current major daily Fibonacci .382 retracement at $7.974. If the market does not stop here it may try to test the July 7th reaction high of $8.694 in confluence with the June high of $8.70. Further resistance is at the current daily Fibonacci .618 retracement at $8.84. The August/November collapsed hit another new multi-month low of 58 cents. Further support is at the major daily Fibonacci .786 retracement at 43.6 cents. Near term resistance is at the current daily Fibonacci .382 retracement at $1.224. A rally above it could send the spread up to the current daily Fibonacci .618 retracement at $1.622 or this month's current high of $1.674. Further resistance is at the current daily Fibonacci .786 retracement at $1.91 followed closely by the May high of $1.966. Open Interest is at the lowest level in over two years. The %R overbought/oversold indicator shows that soybeans are oversold on the daily and weekly charts. The Seasonal index shows that soybeans usually get smashed in the second half of July. Commercial interests are now holding the largest net long position since last August. Large traders are now holding their biggest net short position since then.

August soy meal plunged to the major monthly Fibonacci .618 retracement last week! Near term support is at last week's nearly seven month low of $217.00. A drop below it should keep this market on track for the psychological $200 mark. Near term resistance is at a gap on the daily chart between $270.80 and $275.00. If the gap is filled meal may attempt a run to the current daily Fibonacci .618 retracement at $284.40. Further resistance is at the July 7th reaction high of $314.70 or the May high of $316.50. A break out above these highs should send the market up to challenge the contract high of $326.00. The August/December meal finds near term support at last week's new multi-month low of $29.20. Near term resistance is at the current daily Fibonacci .382 retracement at $52.40 premium August. Further resistance is at the current daily Fibonacci .618 retracement at $66.80. Open Interest is at the lowest level in a year and a half. The %R overbought/oversold indicator shows that meal is oversold on the daily chart and nearly oversold on the daily and weekly charts. Seasonally, soy meal should decline sharply in the second half of July. Commercials are neutral. Large traders (hedge funds) are also neutral.

August bean oil finds near term support at last week's eight month low of 24.39. Further support is at the major weekly Fibonacci .618 retracement at 22.31. If August bean oil does not stabilize here expect a decline to last year's weekly low of 19.30 or the major weekly Fibonacci .786 retracement at 18.81. Near term resistance is at a gap on the daily chart between 26.90 and 27.17. Further resistance is found between the current July high of 29.15 and the June high of 29.50. If August bean oil can conquer this barrier look for a run to the current major daily Fibonacci .618 retracement at 30.65. Further resistance is at the daily Fibonacci .786 retracement at 32.35 or the April high of 32.95. The August/December bean oil spread dropped to the lowest level since Christmas. A break below last week's low of 2.26 should take the spread right to the daily Fibonacci .618 retracement at 1.91. Near term resistance is at the current July high of 4.64. Further resistance is at the spread high of 5.16. Open Interest is flat at multi-month lows. The %R overbought/oversold indicator shows that bean oil is oversold on the daily and weekly charts. Bean oil has a tendency to establish an important seasonal high in mid-July. Commercial interests are the least bearish in ten months. Large traders are the least bullish in ten months.

September corn finds near term support at last week's new contract low of $2.19. Further support is at last year's weekly low of $2.044. Near term resistance is at last week's high of $2.382 (corn has made lower weekly highs and lower weekly lows for seven consecutive weeks) and the 18-day Moving Average that it has not closed above for a month and a half. A rally above it could indicate that the down trend has lost momentum. This could cause a short-covering rally and send the market back up to the current major daily Fibonacci .382 retracement at $2.656 followed closely by a gap on the daily chart between $2.68 and $2.714. Further resistance is at the current daily Fibonacci .618 retracement at $2.944 followed by a daily gap between $3.036 and $3.076. The September/December corn spread is trading right at it's low of 8.22 cents. This is bearish confirmation. Open Interest is sitting flat at the lowest level since January. The %R overbought/oversold indicator shows that corn is oversold on the daily and weekly charts. The Seasonal index shows that corn should be choppy with a downward bias in July. Commercials are holding the biggest net long position in nine months. Large traders (hedge funds) are the least bullish since October.

September rice finds near term support at the contract low of 7.20. Further support is at the psychological 7 cent level. A break below it could send the market down to the major weekly Fibonacci .618 retracement at 6.445. Near term resistance is at last week's high of 7.85 and the 18-day Moving Average that it has not closed above for over a month. A rally above this short term resistance level could cause a counter-trend rally to the current daily Fibonacci .382 retracement at 8.10. Further resistance is at the current daily Fibonacci .618 retracement at 8.65. Major resistance for September rice is at the April, May, and June contract highs of 9.55, 9.55, and 9.54. Open Interest is flat. The %R overbought/oversold indicator shows that rice is oversold on the daily and weekly charts. Seasonally, rice should move sideways in July. Commercial interests are holding the biggest net long position since May of 2002. Large traders (hedge funds) are holding the smallest net long position in eight months.

September oats find near term support between last week's three year low of $1.232. A break below it should send the market down to the psychological one dollar mark. Near term resistance is at last week's high of $1.384 (oats have not been able to break a weekly high for the last seven weeks) and the 18-day Moving Average that it has not closed above for a month and a half. A break above this short term resistance level should send the market up to the current major daily Fibonacci .382 retracement at $1.486. Further resistance is at the current major daily Fibonacci .618 retracement at $1.644 in confluence with the June high of $1.674. Open Interest is at a four month low. The %R overbought/oversold indicator shows that oats are oversold on the daily, weekly, and monthly charts. Oats have a seasonal tendency to decline sharply in July. Commercials are the least bearish in six and a half months. Large traders (hedge funds) are the least bullish in five months.

September wheat finds near term support at last week's new contract low of $3.22. If the market does not stabilize here it could decline to the major monthly Fibonacci .618 retracement at $3.032 in confluence with the psychological three dollar mark. Near term resistance is found between last week's high of $3.374 (wheat has only broken a previous week's high once in the last seven weeks) and the 18-day Moving Average that it has not closed above for a month and a half. If wheat can clear this short term resistance level expect a short-covering rally to take it up to the current intermediate daily Fibonacci .382 retracement at $3.514 in confluence with the current July high of $3.514. Further resistance is found at the current major daily Fibonacci .382 retracement at $3.642. If September wheat does not stop here look for a rally to the current major daily Fibonacci .618 retracement at $3.902 or even the June high of $3.99. The September/December wheat spread is still very low but it is stabilizing. Open Interest is sitting flat at a three month high. The %R overbought/oversold indicator shows that wheat is oversold on the daily and weekly charts. The Seasonal index shows that wheat should rally in July. Commercial interests are now holding the biggest net long position since Memorial Day of 2002. Large traders are holding the biggest net short position since then.

Softs - September coffee signaled a trend change last week when it broke a two week high and also closed above the 18-day Moving Average for the first time in over a month. Then coffee got creamed and plunged to a new low for the year. This is bearish price action. Near term support is at last week's new low of 69.50. Further support is at the contract low of 65.55 or this year's low on the weekly chart at 64 cents. After that coffee could drop to the psychological 60 cent level. A rally above last week's high of 74.30 could get the market back on track and send it to the current major daily Fibonacci .382 retracement at 76.85. Further resistance is at the current major daily Fibonacci .618 retracement at 81.40. The September/December coffee spread hit a new low. This is bearish. Open Interest is flat. The %R overbought/oversold indicator shows that coffee is oversold on the daily chart. Seasonally, coffee should decline sharply until mid-August. Commercials are the least bearish since New Year's. Large traders (hedge funds) are the most bearish since then.

September cocoa penetrated the major daily Fibonacci .618 retracement last week. Near term resistance is at last week's six month high of $1,639 in confluence with the major daily Fibonacci .786 retracement at $1,645. Further resistance is at this year's high on the weekly chart at $1,698. If the market does not stop here it could test the weekly December high of $1,800. Near term support is at last week's low of $1,530. (Cocoa has made higher weekly highs and higher weekly lows for three consecutive weeks). A drop below it could send the market down to the current daily Fibonacci .618 retracement at $1,428. Further support is at the contract low of $1,298. A break to new lows could smash the market to the major weekly Fibonacci .786 retracement at $1,048 or the psychological $1,000 level. Open Interest is flat. The %R overbought/oversold indicator shows that cocoa is overbought on the daily chart. Cocoa has a seasonal tendency to rally sharply in July. Commercial interests are holding their biggest net short position in ten months. Large traders are holding the biggest net long position since September.

October sugar signaled a trend change last week when it broke a two week low and also closed below the 18-day Moving Average for the first time in over a month. A break below last week's low of 7.79 could send the market to the current major daily Fibonacci .382 retracement at 7.41. Further support is at the current major daily Fibonacci .618 retracement at 6.81. Near term resistance is at the contract high of 8.38. A break out to new highs should take the market right up to the major monthly Fibonacci .382 retracement at 8.91 in confluence with the major weekly Fibonacci .618 retracement at 8.94 or even last year's weekly high at 9.13. Open Interest is near an all-time high. The %R overbought/oversold indicator shows that sugar is almost overbought on the weekly chart. The Seasonal index shows that sugar usually rallies in July. Commercials are holding their largest net short position in sixteen months. Large traders (hedge funds) are holding one of their largest net long positions since March 2003.

September orange juice finds near term resistance at last week's new multi-month high of 71.50. A rally above it should send the market right up to the daily February high of 73 cents in confluence with the major daily Fibonacci .618 retracement at 73.20 followed closely by the major weekly Fibonacci .382 retracement at 74 cents in confluence with the weekly November reaction high of 74 cents. If the market does not stop here it could be headed for the psychological 80 cent mark. Near term support is at last week's low of 68.50 (OJ has only broken a previous week's low once in the last nine weeks) and the 18-day Moving Average that it has not closed below for over a month. A break below it could send OJ down to the current daily Fibonacci .618 retracement at 62.30. Further support is at the contract low of 56.60, the multi-decade weekly low of 54.20, or even the psychological 50 cent level. The premium on the September/November OJ spread is now at the tightest price since the contracts started trading. Although this is still in a regular carry-charge market the shrinking premium is bullish. It would not be surprising at all to see OJ slip into backwardation (the front futures contract trading at a premium to the further out delivery contract). Open Interest is flat. The %R overbought/oversold indicator shows that OJ is overbought on the daily and weekly charts. Seasonally, OJ should move sideways to slightly higher in July. Commercial interests are holding the biggest net short OJ position since January of 1998! Large traders are holding the biggest net long position since December of 2000.

October cotton broke a previous week's high for the first time in five weeks. If the market can clear last week's high of 49.10 and close above the 18-day Moving Average for the first time in over two months look for a run to the current major daily Fibonacci .382 retracement at 55.18. Further resistance is at the current major daily Fibonacci .618 retracement at 61.17. Near term support is at the contract low of 45.50 followed by the current weekly July low of 44.20. Further support is at the October 2002 reaction low of 40.50 in confluence with the major monthly Fibonacci .786 retracement at 40.31. A break below forty cents could send the market down to the 2002 low of 31.47 or even the 2001 all-time low of 28.20. Open Interest is at a one month high. The %R overbought/oversold indicator shows that cotton is oversold on the daily and weekly charts. Cotton has a seasonal tendency to trade in a choppy range for the rest of July. Commercials are holding a record net long cotton position. Large traders (hedge funds) are holding one of the biggest net short position that they have had in several years.