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T H U R S D A Y M O R N I N G E X T R E M E M A R K E T S
A complimentary service from INO.com ( http://www.ino.com/ ) CDCD FREE: NetFutures' exclusive eStarter Kit CD-ROM CDCD http://www.ino.com/specials/netfutures/ Andrew, KEY EVENTS TO WATCH FOR: 8:30 AM ET. State unemployment claims for week ended Saturday (Previous: +8,000 at 419,000; Forecast: 411,000) 10:00 AM ET. April wholesale trade (March: inventories +0.1%, sales -1.2%) 2:30 PM ET. Treasury announces size of 13- and 26-week bills. 3:00 PM ET. April consumer credit (March: +$6.2 billion; Forecast: +$8.5 billion) 4:30 PM ET. Money supply statistics. KEY HEADLINES: Sterling plunges to fresh 15-year low against the Dollar. Cendant near $3-billion deal to acquire Galileo, says report. Jury orders Philip Morris to pay $3 billion to lifelong smoker. President Bush announces resumption of US-North Korea talks. Chateau to buy Security Cap Group's CWS unit for $570 million. Costco Wholesale May same-store sales up 6%. HP sees IT slowdown spreading; cautious on revenue outlook. Wells Fargo sees second quarter $1.13 billion non-cash charge. IRAQ: Iraqi Press: US to modify proposal for "smart" sanctions. Japan's trade minister regrets US probe into steel imports. German May unemployment up 18,000; sharply above forecasts. US says no deadline for troop withdrawal from Balkans. The STOCK INDEXES & MARKETS The NASDAQ and S&P 500 were steady to lower overnight due to light profit taking as investors used cautious comments from Hewlett- Packard and J.P. Morgan as an excuse to take some money off the table after a four-day run on Wednesday. Both the Nasdaq and Sept. S&P remain range bound and will need to close above May's high or below last week's lows to clear up near-term direction in the markets. Meanwhile, the Dow posted an inside day with a lower close on Wednesday as it consolidated some of its gains off last Friday's low. However, momentum indicators have turned neutral to bullish signaling that additional gains during June are possible. If there are no major surprises in this morning's unemployment report, I am looking for the Dow to trade steady to higher today. European markets were mixed in overnight trading as German unemployment for May was well above expectations that led to a modest setback in the DAX-30. The UK FTSE-100 was up 17.00 points at 5918.50 while the German DAX-30 was down 12.06 points at 6180.38 as of 11:00 BST. The Nikkei closed higher overnight as investors were encouraged by better-than-expected April machinery orders data. Overnight gains led to the posting of an upside reversal as the Nikkei consolidates above the 50% retracement level crossing at 12,995. Additional gains on Friday are needed to confirm today's bullish reversal pattern, which would increase the odds that a short-term bottom may be in place. Momentum indicators are oversold and turning neutral to bullish hinting that a short-term bottom might be in or near. The Nikkei closed up 103 points to 13,278. INTEREST RATES September bonds were lower overnight and are working on a possible inside day due to light profit taking. Trading was rather subdued as most market participants stayed on the sidelines to wait for the London session's open amidst a lack of fresh news. If the rebound off last week's low continues, the 38% retracement level of this spring's decline crossing at 101-15 then the 50% retracement level crossing at 102-16 are potential targets later this month. Momentum indicators remain bullish signaling that additional short-term gains are possible. The German bond market or Bunds were lower overnight in thin trading as they are due to expire on Friday. Trading was subdued as traders await news from today's European Central Bank conference at 12:30 GMT. The June Bunds were last down 0.01 at 106.81. Sept. Bunds started the day down 0.02 at 95.835, will be the front contract next week. Japanese government bonds closed slightly higher overnight in narrow trading. The bond market took its cue from the Nikkei's movements and was supported by Japan's unchanged bearish economic outlook. The lead June 10-year JGB futures closed at 140.55 yen, up 0.05 as of 1510 JT. The ENERGY MARKETS were lower in overnight trading following the release of this week's DOE data report that showed that crude oil and distillate supplies rose last week. In other news, OPEC Secretary General, Ali Rodriguez indicated that he though a small increase in output would be likely in the third quarter of this year. July crude oil was lower overnight following this week's bearish inventory data, which showed an increase in stocks compared with expectations for a decline in stocks by the trade. Wednesday's key reversal down fell short of testing this year's uptrend line, which crosses near 27.10. However, overnight losses have set the stage for a possible test of this support level by the end of the week. Momentum indicators are bearish but nearing their respective oversold zones warning traders to use caution as a short-term bottom might be near. July heating oil was lower overnight following Wednesday's key reversal down. July gapped lower on the night session's open and extended losses throughout the overnight. Closes below Wednesday's low would set the stage for a test of May's reaction low crossing at 74.55. Momentum indicators are bearish signaling that sideways to lower prices during the first half of June are possible. July unleaded gas was lower overnight following Wednesday's trendline breakout and close below the 50% retracement level of this year's rally crossing at 88.93. Additional weakness during the day session could lead to a test of the 62% retracement level crossing at 85.62 later this month. Momentum indicators are bearish signaling that sideways to lower prices near-term are still possible. July Henry Hub natural gas was lower overnight following this week's bearish AGA inventory data report that showed U.S. natural gas inventory rose by 117 billion cubic feet last week. This report eased fears of rising energy demand due to warmer temps across the south. Momentum indicators are turning bearish once again hinting that a test of last week's low is possible. Closes below this support level would renew this year's decline while opening the door for a possible test of the 62% retracement level of the 1999/2001 rally crossing at 3.64 later this month. CURRENCIES The September Euro is working on a possible inside day but was slightly lower overnight following Wednesday's key reversal down. Closes below 84.16 would renew this spring's decline during June. Momentum indicators are oversold but neutral to bearish thereby leaving the door open for additional weakness. The September British Pound plunged to a new 15-year low overnight following Wednesday's trading range breakout. Overnight losses led to a close below weekly chart support that crosses at 139.52. If the decline continues, the February 1986 low at 136 is the Pound's next target later this spring. Momentum indicators are bearish signaling sideways to lower prices are possible near-term. The September Swiss Franc was lower overnight as it extended Wednesday's key reversal down. A lower close during the day session is needed to confirm yesterday's bearish chart pattern, as the Franc is poised to renew this spring's decline. Closes into new lows would set the stage for a possible test of weekly chart support crossing at .5508 later this year. The ADX (a trend-following indicator) is turning sideways to higher signaling that additional weakness is still possible. The September Canadian Dollar gapped up and traded higher overnight as it extended this week's gains. Closes above Wednesday's high crossing at .6558 would confirm Wednesday's trading range breakout and confirm the resumption of this spring's rally. If September's rally continues, the 62% retracement level of this year's decline crossing at .6573 is September's next upside target. Momentum indicators are bullish signaling that sideways to higher prices during the first half of June are possible. The September Japanese Yen was higher overnight due to light short covering. This week's decline, which filled the gap at .8425 thereby increasing the odds that a short-term top has been posted. Stochastics and RSI are turning bearish following a test of their respective overbought zones warning trader's to use caution as additional weakness is possible. PRECIOUS METALS August comex gold was lower in overnight trading as it continues to consolidate around the 75% retracement level of the decline off May's high, which crosses at 267.20. Closes above 269.60 are needed to temper the near-term bearish outlook in August gold. If the decline resumes, the reaction low crossing at 263.20 is August's next target. Stochastics and RSI are bearish but becoming oversold warning bears not to press their hand as a low may be near. July silver was lower overnight and remains poised to test trading range support crossing at 4.31 in the near future. Closes below this support level crossing at 4.31 would open the door for a possible test of weekly support crossing at 4.15 later this month. Momentum indicators are bearish signaling that additional weakness near-term is possible. July copper was lower overnight due to spillover selling following Wednesday's downside reversal. A lower close during the day session would increase the odds that this week's bounce has come to an end. Closes below Monday's low would open the door for additional weakness and could lead to a test of weekly support crossing at 74.10 later this spring. It will take closes above 77.20 to temper the near-term bearish outlook in the market. Momentum indicators are neutral to bearish signaling that sideways to lower prices into early-June appears are still possible. GRAINS July corn was higher overnight due to hot/dry conditions in eastern China's key crop producing region are gaining increased attention from the market. Yield reductions of some crops have already taking place. Rain is needed soon over the dry areas to avoid additional crop losses. Producers in the US remained concern over the cool/wet conditions across the Midwest, which have slowed early development of this year's corn crop. However, traders have indicated that these conditions are of little concern at this point in the growing season. This morning's export sales report will provide near-term direction for the market. Pre-report estimates range from 850,000 to 1 million metric tonnes. Wednesday's upside reversal hinted that the pause above broken trendline resistance might be coming to an end. A higher close on Thursday would set the stage for a possible of May's high crossing at 2.11 1/2 later this month. Early calls are for July corn to open 1 to 1 1/4 cents higher this morning. July wheat was higher in overnight trading due to hot/dry conditions across China, which has lead to some yield reduction of their hard red winter wheat crop. Overnight gains were limited as the wheat harvest has moved into southern Oklahoma and is accelerating. Early yield results are fair however, protein levels are coming in better than expected. The trade will be closely watching this morning's export sales report for near-term direction. Pre-report estimates range from 300,000 to 500,000 metric tonnes. Early calls are for July wheat to open steady to 1 cent higher this morning. SOYBEAN COMPEX July soybeans were steady in overnight trading following Wednesday's close into new highs for the month. Extended weather forecasts are calling for warmer temps however, additional rain is also in the forecast, which will continue to delay the last of this year's soybean crop to be planted. Traders will also be watching this morning's export sales report for near-term direction. Pre-report estimates range from 200,000 to 400,000 metric tonnes. Export sales continue to run at or just above the pace needed to reach the latest USDA projection. Some traders believe that the USDA will actually raise their export projection of soybeans for this year in the upcoming June supply/demand report. Wednesday's new high close for the month keeps the uptrend off April's low intact with March's high at 4.77 1/2 marking a potential target later this year. Momentum indicators are bullish signaling that sideways to higher prices are possible. Early calls for July soybeans to open steady this morning. July soybean meal was higher overnight as it is challenging the 62% retracement level of this winter's decline crossing at 169.40. Multiple closes above this resistance level could lead to an eventual test of the 75% retracement level crossing at 175.40 later this month. Traders will be closely watching this morning's export sales report for confirmation that foreign demand remains strong. Pre-report estimates range from 100,000 to 175,000 metric tonnes. Momentum indicators have renewed their bullish modes signaling that sideways to higher prices near-term are possible. Early calls are for July soybean meal to open 10 to 30-cents higher this morning. LIVESTOCK August hogs closed unchanged as a short covering bounce ahead of the close erased early losses. If the rally resumes, April's high crossing at 65.95 is August's next target. Closes below last week's gap at 64.00 would strongly suggest that a short-term top has been posted. Momentum indicators remain bullish but are entering their respective overbought zones warning bulls to use caution as a short-term top might be near. August cattle closed lower on Wednesday and in doing so turned a number of momentum indicators bearish from overbought levels signaling that a broad double top with January's high might be in place. Today's sell off was triggered by a growing sentiment that a seasonal break is underway. Talk of sagging boxed beef and cash markets also weighed on prices. Some traders suggested that packers would either have to cut kills or hold off buying large numbers of cattle in the cash market to make up for recent profit margin reductions. FOOD & FIBER July coffee closed lower on Wednesday due in large part to a lack of short covering buying and forecasts calling for mild weather in Brazil's coffee growing region this weekend. Momentum indicators are oversold hinting that a short-term low is in place or near. Closes above 60.80 are needed to temper the near-term bearish outlook in the market. July cocoa posted a quiet inside day with a lower close as it consolidated some of this week's short covering gains. July remains below broken trading range support crossing at 955 leaving the door open for sideways to lower trading if Monday's low is exceeded. However, momentum indicators are becoming oversold warning bears to use caution when pressing the short side of the market. July sugar posted a key reversal down on Wednesday hinting that the short covering bounce off last week's double bottom might have come to an end. Additional weakness on Thursday is needed to confirm today's bearish reversal pattern. Momentum indicators are bearish signaling that a resumption of May's decline is possible. If the decline resumes, fib support crossing at 832 then 808 are targets. July cotton closed higher on Wednesday keeping the short covering bounce off last week's low alive for the time being. However, July needs to close above this year's downtrend line crossing near 43.95 to confirm that a bottom and trend change has taken place. Momentum indicators are neutral to bullish signaling that sideways to higher prices near-term are possible. _____________________________________________________________________ Re: The Golden Secret Of Price, Time And Market Symmetry http://store.ino.com/private/1A433/TWPD-GOLDEN Dear Andrew: See How One Trader Averages A Documented . . . $42,704 PROFIT PER MONTH . . . For 3 Straight Years! You can know when and where price will turn in every market. Short-term and intra-day moves and turning points can be pinpointed - absolutely! Discover the price and time forces which propel and even drive the market each trading day. These forces are nothing less than amazing. 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