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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. Revised first quarter productivity (Q1 preliminary: - 01%, unit labor costs +5.2%; Forecast: -0.7%, unit labor cost +5.9%) 9:00 AM ET. Redbook weekly survey of US retail sales (Previous week: +0.6%) 10:00 AM ET. April factory orders (March: +1.4%, Forecast: -2.7%) 10:00 AM ET. May NAPM non-manufacturing index. KEY HEADLINES: Fed.'s Kelley to resign after one of two vacant board seats were filled. US May layoff's at 80,140, down 52% from April, Challenger said. Argentina concludes mega debt swap for record $29.5 billion. Chicago Fed.'s auto symposium participant's see 2001 GDP growth at 2.0%. US oil refiners raise second-quarter earnings estimates. Crude oil prices rise as Iraq halts exports. Peru's Toledo to name Cabinet and economic team soon. The STOCK INDEXES & MARKETS The NASDAQ and S&P 500 were mixed overnight in thin trade amidst a lack of any real economic or corporate news. Nevertheless, a number of short-term momentum indicators are beginning to turn neutral to bullish hinting that the setback from May's highs might be coming to an end. Meanwhile, the Dow confirmed last Friday's key reversal up thereby increasing the odds that the setback from May's high might be ending. Monday's rally was enough to turn a number of momentum indicators neutral to bullish. A higher weekly close for the Dow would increase the odds that this spring's rally is resuming. If the decline off May's high resumes, May's reaction low crossing at 10,774.10 is the Dow's next target. European markets were lower in overnight trading while trading volume was light. The UK FTSE-100 was down 6.90 points at 5849.60 while the German DAX-30 was down 13.24 points at 6164.50 as of 11:00 BST. The Nikkei was lower overnight and briefly traded below the 13,000 level for the first time since April 11 before a short covering bounce tempered some of its losses. High-technology stocks continued to lead the decline due to earnings concerns. Losses were tempered due to mild strength in banking stocks. The Nikkei extended its decline off May's high as it tested the 50% retracement level crossing at 12,995. Momentum indicators are bearish but becoming oversold hinting that a short-term bottom might be in or near. The Nikkei closed down 130 points to 13,182 overnight. INTEREST RATES September bonds were lower overnight on light position adjustment however, market flow was very thin due to a lack of fresh news to trade off of. Momentum indicators have turned bullish signaling that sideways to higher prices into early-June are possible. I am looking for a steady to lower close on Tuesday as September bonds consolidate some of its recent gains and trendline breakout. A setback to test broken fib support crossing at 99-31 is a possible target today. The German bond market or Bunds were higher overnight driven by speculation that central banks might step into the foreign exchange market to support the euro. The June Bunds were last up 0.12 at 106.58. Japanese government bonds rallied ahead of the lead June contract's expiry date on June 11. The lead June 10-year JGB futures closed at 140.78 yen, up 0.25 as of 1520 JT. The ENERGY MARKETS were mixed in overnight trading. Gains in crude oil were limited following OPEC's minister's assurances that the cartel would make up any shortfall in output following Iraq's decision to halt oil exports due to a tiff with the UN over the oil-for- food program. Trading could be subdued ahead of this week's API data. Pre-report estimates indicate the trade is looking for crude oil supplies to drop 1 to 3 million barrels last week. Gasoline stocks are expected to rise 1.8 to 2.3 million barrels and distillate stocks are expected to rise 0.7 to 2 million barrels. July crude oil was slightly lower overnight as it is working on a potential inside day. Overnight losses led to a move below the 38% retracement level of this year's rally crossing at 28.26. Closes below last week's low at 27.55 could lead to a test of April's reaction low crossing at 27.25 later this month. 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 higher overnight due to light short covering following Monday's downside reversal. July continues to consolidate below broken trendline support thereby leaving the door open for a test of May's reaction low crossing at 74.55 later this month. Momentum indicators are bearish but becoming oversold warning bears to use caution as a low might be near. July unleaded gas was higher overnight due to light short covering as it consolidated some of Monday's sharp loss. Additional weakness during the day session is needed to confirm Monday's key reversal down. Closes below last Thursday's low crossing at 90.30 would signal the resumption of the decline off May's high. Momentum indicators remain bearish signaling that sideways to lower prices near-term are still possible. July Henry Hub natural gas was higher overnight as it extends its short covering rally off last week's low. Short-term momentum indicators have turned neutral to bullish signaling that additional short covering during the first half of June is possible. If the rebound continues, trendline resistance crossing near 4.20 then May's high at 4.765 are potential targets. CURRENCIES The September Euro was lower overnight despite rumors of central bank intervention to support the currency. A short covering bounce in late overnight trade tempered some of the euro's losses, which could lead to sideways trading during the day session. It will take closes above last week's high crossing at 85.70 to temper the near-term bearish outlook in the market. If the decline continues, a test of last October's lows crossing at 83.77 is possible later this month. The September British Pound was sharply lower overnight as it posted a new contract low. Multiple closes below last fall's low crossing at 1.4072 would confirm the breakout thereby signaling the resumption of this year's decline. Momentum indicators have turned bearish with this week's decline signaling lower prices during the first half of June are possible. The September Swiss Franc was slightly higher overnight as it is working on an inside day as it continues to rebound off last week's contract lows. It would take closes above last Wednesday's high of .5644 to temper the bearish outlook in the market. Until then, the door is open for a test of weekly support crossing at .5488 later this month following last week's breakout below last October's low crossing at .5643. The ADX (a trend-following indicator) is bearish signaling that additional weakness is possible. The September Canadian Dollar was higher overnight following Monday's inside day with a lower close. September remains poised to test of May's high crossing at .6541. Closes above .6541 are needed to confirm an upside breakout of May's trading range thereby renewing this spring's rally. Momentum indicators are bullish signaling that sideways to higher prices during the first half of June are possible. The September Japanese Yen was lower overnight and is working on a potential key reversal down due to profit taking. If last week's gap crossing at .8425 is filled, it would temper the bullish outlook in the yen. Closes above last week's high crossing at .8533 are needed to keep bulls in control of the market. Stochastics and RSI are bullish but nearing their respective overbought zones warning trader's to use caution as a short-term top might be near. PRECIOUS METALS August comex gold is working on a possible upside reversal in overnight trading. August continues to consolidate around the 75% retracement level of the decline off May's high, which crosses at 267.20. If the decline continues, 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 higher overnight due to light short covering following Monday's sell off. However, the door remains open for a test of trading range support crossing at 4.31. Momentum indicators are bearish signaling that additional weakness near-term is possible. Multiple closes below the lower boundary of this spring's trading range crossing at 4.31 would open the door for a possible test of weekly support crossing at 4.15 later this month. July copper was slightly higher overnight due to short covering following Monday's spike below May's low crossing at 74.75. 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. Momentum indicators are bearish signaling that sideways to lower prices into early-June appears are possible. GRAINS July corn was higher overnight following Monday's crop conditions report that showed a drop in the ratings over last week. While traders continue to downplay the cool/wet conditions especially across the western Corn Belt, they could not deny Monday's ratings decline. This week's weather forecast shows only modest improvement in weather conditions leading some traders to speculate that next week's crop ratings report will show another decline as well. Gains were limited due to weather forecasts calling for increased chances for precip across portions of China, which have been on the dry side. The ongoing rally in the US Dollar is also keeping a tight lid on grain prices as it continues to make US grain exports unattractive on the world markets. Nevertheless, last week's breakout above May's downtrend line signaled that a short-term bottom has been posted. A steady to higher close on Tuesday would help 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 steady in overnight trading following Monday's crop conditions reports in both winter and spring wheat. Both reports showed declines in crop ratings from the previous week. Nevertheless, forecast for improving weather conditions across the plains will continue to keep July wheat on the defensive for the time being. I would not be surprised to see a short covering bounce on Tuesday as July may try and consolidate some of Monday's losses. Early calls are for July wheat to open steady this morning. SOYBEAN COMPEX July soybeans were higher in overnight trading following Monday's crop conditions report that showed a decline in the crop ratings. The decline was expected due to the lingering cool/wet conditions across the Midwest. Overnight gains set the stage for a test of last week's high crossing at 4.60 1/2. Closes above this high would open the door for a possible test of March's high crossing at 4.77 3/4 later this month. Momentum indicators are bullish signaling that sideways to higher prices near-term are possible. Early calls are for July soybeans to open 3 to 4 cents higher this morning. July soybean meal was higher overnight following Monday's upside reversal and spillover strength from soybeans. This week's friendly crop conditions report along with continued strong demand could lead to a test of May's high crossing at 168. Multiple closes above this resistance level would renew this spring's rally. Momentum indicators are still bearish warning bulls that closes into new highs for this spring are needed to renew the rally off March's low. Early calls are for July soybean meal to open 50 to 70-cents higher this morning. LIVESTOCK August hogs posted an inside day with a lower close on Monday due to light profit taking as it consolidated some of last week's gains. Nevertheless, the door remains open for a test of April's high crossing at 65.95 later this month. Much of today's pressure was due to spillover selling from the limit-down close in bellies. Losses were limited due to the steady to 75-cent higher cash bids. Momentum indicators are bullish signaling that sideways to higher prices into early-June are possible. August cattle closed lower on Monday on ideas that cash and boxed beef markets may be topping. The relatively low volume of cash sales last week indicates that there might be a larger showlist this week. Momentum indicators are bullish but have become overbought warning traders to use caution as a top may be near. While the door is still open for a possible test of this year's high crossing at 75.00, additional weakness on Tuesday could trigger a round of long-liquidation. FOOD & FIBER July coffee closed higher on Monday as it posted a key reversal up due to short covering. Today's rally was triggered by talk of possible cold weather moving into Brazil's coffee growing regions later this week. Additional support came from the latest commitments of trader's report, which showed that funds had significantly reduced their long positions. Additional strength on Tuesday is needed to confirm today's bullish reversal pattern. July cocoa closed lower on Monday as it extended last week's breakout below trading range support crossing at 955. Momentum indicators remain bearish signaling that additional weakness is possible. If the decline continues, the 75% retracement level at 862 is July's next target. July sugar closed higher on Monday as it extended last Friday's short covering bounce off the 38% retracement level of this spring's rally crossing at 857. While another day or two of consolidation is possible, momentum indicators remain bearish signaling that sideways to lower prices are still possible. If the decline continues, fib support crossing at 832 then 808 are targets. July cotton posted a key reversal down on Monday but remains above psychological support crossing at 40-cents. Early support came from news of increasing crop losses across west Texas cotton due to flooding. However, early strength failed to trigger follow-through buying, which triggered a technical sell off into the close. Additional weakness on Tuesday is needed to confirm today's bearish reversal pattern, which could lead to a resumption of this spring's decline later this month. _____________________________________________________________________ TOMORROW'S MARKET PRICES TODAY _____________________________________________________________________ Armed with such information, such power, you could easily make a fortune! Do you suspect that the markets follow some pattern? That somehow there is some order and reason to market movements? Then you'll be both intrigued and thrilled at this tremendous discovery. CALL MARKET TOPS AND BOTTOMS WITH PINPOINT ACCURACY . . . It makes no difference what market, stocks, futures, anything. These techniques forecast both intraday price moves and the 2-3 day short-term price swings. If you can construct a bar chart, you can forecast market moves. 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