Thread: Market Talk Page

blueskys4ever wrote:

Because of this site, I was able to switch from equities to securities on the 3rd of January. I would have done it the previous week , but I did not know I had to have my trade in before 10 AM Central. My opps!


Thanks

I love Tucson what a nice area. Who's advice did you follow with the switch on the 3rd out of stocks? That was a great switch. Thank you!

I have no clue if this CPI data will weigh in. The market seems to event driven at the moment. The fact that it has been choppy in the US markets indicates that smart money is unsure even in the face of hard economic data.

I do believe that a correction is near-term for the US markets. Something more than the drop in the last few days.

I have to honest, that was 100 percent my call for the 3rd of January. I did this based on the upcoming Iraqi elections. The jumping back in part came from advice and I don't remember who it was. I don't really have a favorite per se. But I will say that I take stock in what Saraho offers. I find her comments are insightful and educated. Then again, I also like Technos matter of fact approach.

Show-me wrote:

How does everyone feel about the CPI/ Core CPI? What do ya think?Will a rise like theCore PPIfuel the “correction� that some are looking for?

When was the last time there was a 20% correction? It has been nearly three years. That seems like a long time to me.

The big talk this weekend is raising the cap on social security. Have you heard the whinning? No one cared last weekend with the talk of decreasing benefits. I believe the market may sell off due to the raising of the cap on social security debate. Why is there a cap on social security at all? Seems like a fair way would be your first $25,000 would be capped then any over that social security is taken out. Any thoughts? Without personal attacks, please.

blueskys4ever wrote:

Saraho,

So, U.S products will be highly marketable at this point. I like it. When do you think the Chinese government will take the bold step to untie their currency from the US dollar? What will this do to the I fund?

By the way, I own a Nissan Titan which is assembled in Canton, Mississippi.

It's unclear when this will happen or how.The USsupports a separatecurrencyto reduce the trade deficit. China is considering maintaining some form oftie to ensure continued stability of their currency. A compromise seems most likely.

It will strengthen the dollar to some extent, whichworks against the I fund. But most don't see theeffect as strong enuf to be ofmajor significance.

Worrying about inflation

Bigger-than-expected jump in PPI is worrisome, but may not change the Fed's thinking -- yet.
February 18, 2005: 11:49 AM EST
By Paul R. La Monica, CNN/Money senior writer

NEW YORK (CNN/Money) - Investors hoping the Federal Reserve might slow the rate of its interest rate hikes soon got an unwelcome shock Friday: prices at the wholesale level showed a surprising jump in January.

Fed Chairman Alan Greenspan and other inflation watchers have more reason to worry now after a bigger-than-expected increase in the government's producer price index (PPI) last month.

What's even more worrisome was that the so-called core PPI, which excludes often volatile energy and food prices, jumped 0.8 percent, much higher than economists' forecasts and the biggest increase in just over six years.

For quite some time, many investors and analysts have been able to discount fears of inflation by saying that the only real inflationary pressures were coming from rising oil prices. But Friday's PPI report seemed to debunk that notion.

"This number clearly is going to be upsetting to the Fed. If it repeats itself next month, they may have to change their stance. The disturbing thing is that it's in the core," said Craig Coats, co-head of fixed income at Keefe, Bruyette & Woods.

But will this report spark the Fed into a more aggressive stance? The central bank raised the target for its key short-term interest rate for the sixth consecutive time earlier this month but maintained that it could keep a "measured" pace, since inflation still appeared to be relatively benign -- a comment that Greenspan echoed in his testimony to Congress this week.

One month doesn't make a trend...
Steven Wieting, senior economist with Citigroup Global Markets, said the report is not too alarming since some of the bigger factors behind the spike in wholesale prices were big jumps in tobacco, alcohol and auto prices. Those are unlikely to be repeated, he said, noting that as such the Fed won't put too much credence in them.

"This is not entirely comforting but you'd need a lot more information than one month's PPI at the turn of the year to worry about inflation," Wieting said.

Still, there was more to the unexpected rise in the "core" PPI than just cigarettes, booze and cars. Communications and related equipment prices rose 0.5 percent while construction machinery and equipment costs jumped 0.9 percent.

So there is a case to be made that the steady increase in energy costs may finally be having a broader impact on overall prices.

"It was a matter of time before the core rate started feeling the effects of increased energy and commodity prices," said Barry Ritholtz, chief market strategist with Maxim Group. "Maybe it's aberrational but maybe it's the start of something more significant."

As a result of the PPI reading, investors are likely to focus even more intently on next week's consumer price index (CPI) report for January. Economists are forecasting that overall CPI and core CPI each rose 0.2 percent.

Greenspan has long maintained that he and other members of the Fed look more closely at what's happening with consumer prices when judging inflation, as opposed to the PPI, which measures prices paid by producers and wholesalers.

And in his semiannual report to Congress this week, Greenspan reiterated that he's not overly concerned about inflation at the consumer level.

"Despite the combination of somewhat slower growth of productivity in recent quarters, higher energy prices, and a decline in the exchange rate for the dollar, core measures of consumer prices have registered only modest increases," Greenspan said in his testimony to Congress.

...but don't expect the Fed to pause soon
But the unexpected jump in wholesale prices could mean that consumer prices for January will be higher than forecast as well. And if that trend continues, this could lead to a more aggressive Fed.

"There is a good chance that CPI will be higher than expected. But the question is not only will the CPI reflect the increase in wholesale inflation but whether it will be carried into subsequent months," said Ashraf Laidi, chief currency analyst with MG Financial Group.

Still, when push comes to shove, there are other things for the Fed to worry about. So even if inflation starts to pick up, it's highly unlikely that the central bank will abandon its measured stance of rate hikes, some analysts said.

"The Fed doesn't have to jack up rates really quickly since other economic indicators are softening," said Maxim's Ritholtz. "Capital expenditures are modest and employment figures are anemic, so the biggest danger the Fed faces is smothering the recovery."

To that end, Jeffrey Saut, chief market strategist with Raymond James, agreed that it's tough to justify bigger rate hikes until there is a sustained improvement in the job market. Only then, he argues, would inflation become a major worry.

"The big concern is future inflation and the Fed is viewing that through the labor market. Wage growth continues to be muted," said Saut.

Most market observers expect another quarter-point hike in the fed funds fate in March and quarter-point boosts by Fed policy-makers in May and June as well.

If that happens, the fed funds rate would be at 3.25 percent, closer to the so-called "neutral" rate, believed to be between 3.5 percent and 4 percent, that should discourage inflation while still stimulating economic growth.

But given the heightened inflation fears, it's looking less likely that the Fed will pause in the summer, as some were hoping it would.

"People had thought the Fed could go to 3.25 percent in June and hold but increased inflation pressures would change their thinking," said Keefe, Bruyette & Woods' Coats.

http://www.amateur-investors.com/Weekend_Market_Analysis_Feb_19_05.htm



http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bu lletin&content_idx=40659



MONDAY, FEBRUARY 21, 2005

World of Worry

Problems abound around the globe, but Stratfor thinks we fret over the wrong ones

By JONATHAN R. LAING

INVESTORS HAVE A WORLD OF WORRY to fret about these days, from the Middle East to Korea. But they're mostly worrying about the wrong things, contends George Friedman, who heads the private intelligence-service Stratfor. The Austin, Texas firm has prospered since we first publicized it just weeks after the

Sept. 11 attacks. Collecting real-time information from the Internet and from informants around the world, Stratfor forecasts and geopolitical analyses have become staples in stories on the war on terror. Likewise, Friedman's commentary is sought by news shows and Fortune 500 clients -- including some of the largest financial institutions. His views are frequently provocative and idiosyncratic, but always stimulating.

His forecast for 2005, conveyed via telephone, proved to be no exception. Our talk spanned the globe, building from progress in the Middle East -- despite new violence in Lebanon -- through North Korea's rumblings, on to why investors should be cautious on China and Russia.


Mapping Danger: From nukes to new separatist movements: Headed by George Friedman, Stratfor produces geopolitical analyses valued by investors and leaders across the planet.


As a political scientist and admirer of realpolitik, Friedman feels that the U.S.'s aggressive action and military presence in Iraq has inestimably helped the war on terror by, among other things, motivating reluctant allies like Saudi Arabia, Egypt and Pakistan and erstwhile enemies like Syria and Iran to help the U.S. by cutting off their support of al Qaeda and serving up better intelligence to Western governments.

"I call it the coalition of the coerced, but the tempo of timely arrests of al Qaeda operatives around the world, and the fact that the U.S. suffered no terrorist attacks running up to last year's election, can in good part be attributed to better intelligence from the Islamic world," Friedman avers. "Our victory in Afghanistan was insufficient. We had to show the Islamic world that we meant business by putting large numbers of troops into the Mideast, into harm's way, rather than cutting and running such as the U.S. had done previously in its rapid pull-out from Beirut in the 1980s and Somalia in the '1990s."

In this context, Friedman sees Syria's and Iran's recent announcement of their united front and the assassination of former Lebanese leader Rafik Hariri as an attempt by the two nations to strengthen their bargaining position with the U.S. He claims that the bombing that killed Hariri was likely contracted out to Syria's and Iran's favorite terrorist organization, Hezbollah. He adds, "Syrian intelligence doesn't do suicide bombings like we think the Hariri assassination was, but Hezbollah most certainly does. The two countries, by killing someone the U.S. really likes, seem to be sending a message that if pushed too hard by the U.S., they will react."


China's economic and social horizons are brimming with trouble.


While Friedman cautions against excessive euphoria over the recent elections in Iraq, he contends that the situation there is beginning to stabilize. Moreover, he expects that the war will begin to recede from the headlines. The virulence of the Iraq insurgency took Stratfor somewhat by surprise. But, he adds, the violence has been largely confined to the Sunni Triangle. (See "Winning in Iraq" in the June 14, 2004 Barron's on the strategic reasons Friedman supported invading Iraq.)

Moreover, the training of the Iraqi security force is starting to bear fruit, particularly since the number of Sunni recruits has been cut back, due to their dubious loyalties [Saddam is Sunni]. Friedman also expects to see more involvement by Iranian-trained Shiite militia units in patrolling some of the hot combat zones now that the Ayatollah Ali al-Sistani slate appears to have won a victory. He expects U.S. casualties and troop levels to start trending lower in the months ahead; among other things, U.S. forces will likely be shifted to larger, well-protected bases more remote from Sunni cities.

As for Iran, Friedman is not as concerned as many other observers about its nuclear-weapons program. Iran has actually been quietly helpful to the U.S. both in the war on terror and in Iraq, and has a major stake in creating a dependable ally on its western border in the form of a Shiite-dominated united Iraq.

Iran is largely using its nuclear ambitions as a bargaining ploy with both the U.S. and the European Union. Negotiators from Germany, France and Great Britain are attempting to play the good cop with Iran, while the U.S. remains the bad cop. In the latter role, according to Friedman, the Bush Administration may well have covertly planted the exposé in the New Yorker last fall by Seymour Hersh -- which claimed that U.S. and Israeli special-operations teams operating inside Iran had already catalogued numerous special nuclear facilities for eventual attack. "Iran's nuclear program isn't really all that viable, and the country has to know that if she continues to enrich uranium in defiance of Western desires, then the U.S., or perhaps Israel, will hit them with the big stick," he insists. "Iran isn't that stupid."


Iran has helped in the war on terror, although Pres. Mohammed Khatami may not brag about it.


Likewise, Friedman contends that the North Korean nuclear standoff has been much overhyped by the world media. "It's merely a beautiful bargaining strategy on the part of a country with the economic importance of Chad to make itself into a centerpiece of world diplomacy," he observes. "None of the weapons are usable, since North Korea would be turned into glass within minutes should the country lob a missile at somebody."

The bizarre economic policies of Kim Jong Il have, in fact, bolstered rather than threatened the survival of his regime, despite the existence of widespread malnutrition and grinding totalitarian mind-control in North Korea. Neither China nor South Korea is particularly anxious to assume the economic burden of this failed state, Friedman believes. Kim is hoping to use the nuclear wild card to win a peace treaty (only an armistice was signed between the U.S. and North Korea after the Korean War) and full diplomatic relations with the U.S.

Then, he continues, North Korea might be able to attract more foreign investment and economic aid, all while keeping the zany Kim dynasty in power.

Friedman sees more peril in 2005 from developments in quarters of the globe that have received less media attention. China, for example, this year could see significant deceleration in its torrid economic growth rate and may well be on the cusp of a meltdown, he says. Moreover, Friedman contends that China is likely to become more bellicose and nationalistic as its economic malaise swells, because foreign aggression has been a tried and true method for deflecting people's attention from problems on the home front.

To be sure, Friedman's pessimism about China's prospects places him at odds with the conventional wisdom pushed by virtually every U.S. corporate chieftain and by scores of news commentators.


Dear Leader as paper tiger: North Korea would be "turned into glass" if Kim acts out.


"Today's China boom can only be compared to the dot-com frenzy of the late '90s in the hype and conviction that China will somehow defy all the rules of normal economic cycles," he avers. Yet many observers are still agog over China's low labor costs, the gleaming office buildings of Shanghai, the state-of-the art plants rimming its eastern cities, huge currency reserves and surging trade surpluses.

Friedman sees growing imbalances, seething social discontent and a rotting financial structure. In fact, to Friedman, the current China exhibits unsettling similarities to Japan in the late '80s, just before the sun set on the latter economy.

China, like Japan of yore, is experiencing an insensate real-estate boom and looming overcapacity in its industrial base.

The financial structures of both countries suffer from the rot of loan misallocation, a shaky banking system and a huge overhang of bad debts, Friedman notes. Likewise, much of today's economic growth in China is profitless, due to both the weight of moribund state-owned enterprises in the economy and a mania for market-share growth at the expense of economic returns.

Finally, Friedman claims that many China enthusiasts are ignoring the demographic time bomb of an aging population as a result of China's one-child-per-family crackdown. The more rapidly advanced graying of Japan has already put a damper on Japan's consumer spending.

Signs of trouble in China are beginning to accumulate just below the surface of glossy economic growth, Friedman asserts. The economy continues highballing along, despite all government attempts to rein in growth by a small interest-rate hike and restraints on lending to some key industrial sectors. China can't afford too much monetary restraint; any large increase in interest rates could trigger a cascade of loan defaults and pop the credit bubble.

Stratfor has also noted a dramatic jump in riots, strikes, bombings and the like throughout China that have largely gone unnoted or unreported by the bedazzled world news media. Social tensions only figure to grow as a result of increasing layoffs at the state-owned enterprises and yawning disparities in wealth between China's populous agrarian hinterlands and the thriving coastal cities.


U.S. troop casualties in Iraq should drop this year as soldiers move to better-protected bases.


He claims that paranoia on the part of party authorities seems to be growing apace, as evidenced by their increasing resort to security sweeps against dissidents. The government's fear of riots following the recent death of Zhao Ziyang, the disgraced former general secretary of the Communist party and a hero of the democratic movement, was just one example of this new attitude, says Friedman.

Friedman also expects Chinese authorities to increasingly fan nationalistic fervor in an attempt to defuse growing tensions at home. The recent spate of saber-rattling with Taiwan is just one example. China's dispute with Japan over exclusive economic control of a large swath of ocean waters south of Japan must be seen in the same light. "The Japanese are widely disliked in China, so the Chinese authorities can always use Japan as a potent symbol of why the Chinese people must remain unified," Friedman claims.

At present, capital inflows into China remain enormous from the nation's positive trade balance, foreign direct investment chasing the Chinese dream and currency speculators betting on a revaluation of the yuan. But Friedman points out that capital flows can turn on a dime -- as witness the capital flight suffered by other East Asian nations in 1997 and 1998.

In recent months, Chinese companies and other entities have begun to make substantial investments in overseas natural resources, land and tech companies. Most observers see this as an indication of China's growing economic might. Still, Friedman wonders if this foreign direct investment might be an incipient sign of capital flight by Chinese businessmen looking for a safer and more profitable home for their money.

"Just like the controversial Japanese acquisitions of Pebble Beach and Rockefeller Center in the late '80s, might the recent deal Chinese computer maker Lenovo reached to buy IBM's personal-computer business be a sign of trouble at home rather than self-assertion of a growing economic powerhouse?" he asks.


Watch Putin's actions against Russian companies -- not his lips.


Likewise, Friedman thinks Vladimir Putin's Russia may be a growing problem for the West -- after more than a decade of grudging Russian acquiescence to U.S. great-power supremacy and fumbled attempts to "Westernize" its economy and political systems. Russian authorities today see market capitalism as something of sham that brought riches mostly to the oligarchs and Western financial interests.

Even worse for Putin, Western political influence is growing in states that made up much of the former Soviet Union. The Baltic States of Latvia, Estonia and Lithuania recently joined both NATO and the EU. Pro-Western governments are in place in the former Soviet republics of Georgia and, most ominously from Russia's standpoint, Ukraine. Elections this year could push other former Soviet states Moldova, Armenia and Kyrgyzstan into the Western camp. Meanwhile, Americans now are stationed in former Russian bases in Central Asia as a result of the U.S. war in Afghanistan.

Putin has fought back by increasing centralized control of the Russian economy -- the recent state expropriation of key assets of Yukos must be seen in this light -- and re-establishing Kremlin control of regional governments. But Putin may not be able to keep the centrifugal forces at work inside Russia at bay, Friedman claims.

Stratfor has picked up indications from Russian intelligence sources that Chechen separatists may be planning to take over a strategic missile base or nuclear power plant to force a Russian withdrawal from Chechnya. Other Muslim areas in the Russian federation are becoming more defiant, says Friedman.

Facing a desperate, disintegrating situation, the Kremlin will, at a minimum, try to overthrow the Georgian government and block the Ukraine from joining NATO, Friedman says. He also expects Putin to try to re-establish state control over such corporations as Unified Energy Systems (Russia's power monopoly); Transneft (the oil transport monopoly); and private oil companies Sibneft and Surgutneftegaz. In addition, Putin has defied the U.S. by threatening to sell various strategic weapons systems to Syria and China, Friedman claims.

Let it never be said that we don't live in interesting times.

Good tips-

http://biz.yahoo.com/special/mistakes04.html

Next week. Hmm. Now I have an idea and it scares me. It scared me in January and it scares me again. How will the minutes of the Fed affect the market? Jaunuary was the first time it had been released in advance. This will be the second time it will be released in advance of the old time line. It is suppose to be released 3 weeks after they had their meeting. I would think that we would then have a couple more weeks before it is released. I read that it will be released this week. Ohh not good. The minutes are a little more blunt and scarry if you ask me. If you check, I believe you will discover that the minutes were released in January when the market took a hit. I could be wrong and will have to check on it. I intend to be all out a day or two before any release of the minutes on the short term. Until things turn around I do not believe the minutes being released is a good thing. I like the old system. Just a friendly heads up. An idea nothing more. Take no action on what I have said. Just something to think about. What do I know, I'm learning:P

[align=center]Sand Spring Advisors LLC[/align]

[align=center]Hanging into Presidents' Weekend[/align]

[align=center]February 16, 2005


[align=center]by, Barclay T. Leib[/align]



[align=left][/align]


[/align]
On the hourly S&P 500 chart above we have drawn Fibonacci bands between the Jan 3rd top and the Jan 24th low, as well as a second set of "stretched" Fibonacci bands down to approximately 1157 -- a potential "natural attractor" target low that yields another nice "fit" to the recent S&P price action.

Overall, the market has recently rallied back a bit beyond the 1200 level that we previously suggested was possible to see on a snap-back, but the S&P still has ample chance to stop right around current levels and leave the Dec 31, 2004-Jan. 3, 2005 high unbroken. This is indeed our prefered call. More specifically, it would not be surprising to see prices hover motionless for two more days into the Presidents' Day weekend, but then collapse on the other side of the long weekend.

If the Jan 3 high is surpassed, we will be generally confused, and worried that a last vault to 1260 may be under way. This is possible, but not a path we really expect. We believe that the Dec 31, 2004 cycle date was simply too important for such.

In addition, while the S&P has experienced quite a kick higher in early Feb., the Interactive Week Internet Index has barely been able to gain any ground, and remains a clear "Three Peaks & Domed House" topping formation in the process of completing itself.

Weekly Market Watch
The Future is in Futures
by Pearce Financial, LLC
February 22 - February 25, 2005
[align=center]Based on last week's trading activity & reports,
the following markets are setting up for potential trading opportunities.[/align]
[align=center][/align]
[align=center]All US markets are closed on Monday, February 21st for President's Day. [/align]
Stock indices[/b] - The March S&P 500 finds near term resistance between last week's one and a half month high of 1213.40 and the contract high of 1220.50. A break out to new highs should take the market to the major monthly Fibonacci .618 retracement at 1265.90. Further resistance is at the psychological 1300 area. Near term support is at last week's low of 1197.60. (The S&P 500 has made higher weekly highs and higher weekly lows for three consecutive weeks). A drop below it could allow the market to test the current intermediate daily Fibonacci .618 retracement at 1183.20 in confluence with the current February low of 1181.30. Further support is located between the January low of 1164.50 and the major daily Fibonacci .382 retracement at 1160.10. If the market does not recover from this level it may drop to the major daily Fibonacci .618 retracement at 1122.80 in confluence with the monthly 18-bar Moving Average at 1122.80. This would be an ideal level to look for buy set ups. The S&P 500 has not closed below the monthly 18-bar Moving Average in nearly two years. Open Interest is flat. The %R overbought/oversold indicator shows that the S&P 500 is overbought on the monthly chart. Seasonally, the S&P 500 should move sideways for the first half of February and decline in the second half of the month. Commercials are holding the smallest net short position in three months. Large traders (hedge funds) are still holding the biggest net short position since mid-August. Small traders are still holding a large net long position.

The March NASDAQ 100 find near term resistance at last week's nearly one month high of 1565.00. Further resistance is at the daily Fibonacci .618 retracement at 1583.50. After this level the market could make it to the contract high of 1645.00. A break out to new contract highs could send the NASDAQ 100 right to the December 2001 high of 1738.00. Near term support is found between the current February low of 1499.00 and the January low of 1484.00. This price zone is closely followed by the monthly 18-bar Moving Average at 1466.00. (The NASDAQ 100 has not closed below the monthly 18-bar Moving Average since April of 2003). Further support is at the major daily Fibonacci .618 retracement at 1441.40. If the market does not stabilize here it could plunge to the major weekly Fibonacci .382 retracement at 1318.80 or even last year's low of 1302.00. Open Interest is at a two month high. The NASDAQ 100 should move lower in February. Commercial interests are holding the biggest net short position in nearly seventeen months. Large traders are holding the biggest net short position in five months. Small traders are holding a record size net long position.Interest rates - March T-bonds signaled a trend change last week when they broke below a previous week's low for the first time this year 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 113-19 could initiate a sell off to the major weekly Fibonacci .382 retracement at 111-29. Further support is at the major weekly Fibonacci .618 retracement at 108-17. Near term resistance is currently located between the contract high of 117-12 and last year's weekly high of 117-26. Further resistance is at the major weekly Fibonacci .786 retracement at 119-24. The March NOB spread (T-notes vs. T-bonds) finds near term resistance at the all-time high of 3-29 premium T-bonds. Further resistance is at the psychological 5-00 mark. Near term daily support is at the current major daily Fibonacci .382 retracement at 1-00 premium T-bonds. Further support is at the November low of 27/32nds premium T-notes in confluence with the daily December low of 25/32nds premium T-notes and the current major daily Fibonacci .618 retracement at 25/32nds premium T-notes. Open Interest is near the record high. The %R overbought/oversold indicator shows that T-bonds are overbought on the weekly chart. T-bonds have a seasonal tendency to move lower in February. Commercial interests covered some of their large net short position . Large traders covered some of their large net long position. Small traders are the least bearish in three months.March T-notes announced that the bull run is over when it closed below the 18-day Moving Average for the first time in nearly a month and broke a two week low. If the market takes out last week's low of 111-13 it should have no problem tagging the intermediate weekly Fibonacci .618 retracement at 110-10 in confluence with the December low of 110-085. A break below this area should allow for a quick drop to the intermediate weekly Fibonacci .786 retracement at 109-065. Further support is at the major daily Fibonacci .618 retracement at 107-20. Near term resistance is located between the current February high of 113-125 and the contract high of 113-165. Further resistance is at the weekly September high of 114-12. If the market can clear this high look for a rally to the intermediate weekly Fibonacci .786 retracement at 115-255 or the major weekly Fibonacci .618 retracement at 116-005. Open Interest hit a new all-time high again. T-notes have a seasonal tendency to decline in February. Commercials now hold only about half of the record net long position that they had just two weeks ago. Large traders (hedge funds) are now holding the biggest long short position in six weeks. Small traders are holding a near record net short position.

International bonds - March Canadian 10-year bonds may be starting a significant bull market correction. The market cracked a previous week's low and also dipped back below the 18-day Moving Average. If Canadian bonds take out last week's low of 112.51 expect an acceleration to the January low near 111.40 (Canadian bonds have made higher monthly highs and higher monthly lows for seven consecutive months) or the late December reaction low of 111.20. Further support is at the December low of 110.60. Near term resistance at the contract high of 113.78. Further resistance is at the 114 mark. March Euro bunds finally signaled a trend reversal after a multi-week rally that carried it to new historic highs. The market broke a two week low and closed below the 18-day Moving Average that it has closed below only once in the last month and a half. A break below last week's one and a half month low of 118.75 could slam the market to the late December low of 118.11. Near term resistance is at the all-time high of 120.98. A rally above it should allow it to hit the 122 mark. March London long gilts are in serious trouble. The market made an outside reversal down on the monthly chart when it took out the January high and then reversed to break a previous month's low for the first time since July. A break below last week's one and a half month low of 110.15 should send gilts right to the December spike low of 109.71 or even the daily November low of 109.37. Further support is at the major daily Fibonacci .618 retracement at 108.48 in confluence with the daily October low of 108.45. Near term resistance is located between the current February high of 112.48 and the contract high of 112.65. A break out to new contract highs could send launch gilts to the psychological 115 mark. March Australian 10-year bonds find near term support at last week's one and a half month low of 94.525. Further support is at the January low of 94.46 in confluence with the November low of 94.445. A break below these lows could smash this market down to the major weekly Fibonacci .618 retracement at 94.25. Near term resistance is at the current February high of 94.75. Further resistance is at the January high of 94.805. After that look for the market to hit the contract high of 94.875 in confluence with the weekly 2004 high at 94.89. Further resistance is at the major weekly Fibonacci .786 retracement near 95.09. March JGB's (Japanese gov't. bonds) find near term support between last week's one and a half month low of 138.25 and the late December reaction low of 138.21. Further support is at the major weekly Fibonacci .382 retracement at 137.36. Near term resistance is at last week's high of 138.87. A rally above it could allow the market to test the contract high of 139.96. Further resistance is at the weekly 2004 high near 140.50.Currencies - The US dollar index finds near term support at last week's low of 83.37. Further support is at the daily Fibonacci .618 retracement at 82.38 or the January 12th reaction low of 82.05. Failure to stabilize here may slam the buck to an important technical support zone between the contract low of 80.48 and the 1995 low of 80.14. Near term resistance at the major daily Fibonacci .382 retracement at 85.40 in confluence with the current February high of 85.46. Further resistance is clustered between the monthly 18-bar Moving Average at 87.61 (the US dollar index has not closed above the monthly 18-bar Moving Average in nearly three years), the intermediate weekly Fibonacci .618 retracement at 87.91 (as measured between last year's weekly high of 92.50 and last year's weekly low of 80.48) and the major daily Fibonacci .618 retracement at 88.43. Open Interest is at a five month low. The %R overbought/oversold indicator shows that the greenback is oversold on the monthly chart. The Seasonal index shows that the dollar should move sideways to slightly higher in February. Commercial interests are holding the biggest net short position since Memorial Day. Large traders are the least bearish since late June. Small traders are the most bullish since early May.

The March Canadian dollar signaled a short-term trend change last week when it took out a two week high. The market also closed above the 18-day Moving Average for the first time in a month. Near term resistance is found between last week's high of .8159 and the current daily Fibonacci .382 retracement at .8167. Further resistance is at the current daily Fibonacci .618 retracement at .8304 or even the January high of .8370. Near term support is at the current February low of .7945. A break below it could cause the "looney" to dive to the major daily Fibonacci .618 retracement at .7656. Open Interest is at a two month high. Seasonally, the Canadian dollar has a tendency to rally in the first couple of trading days in February and then decline sharply for the rest of the month. Commercial interests are the least bearish since the end of June. Large traders are net short for the first time since then. Small traders are still neutral.

The March Australian dollar finds near term resistance at last week's new contract high of .7884. Further resistance is at the weekly November high of .7938 or even the weekly 2004 high of .7980. A strong break out above 80 cents could allow the market to make a run for the 1996 high of .8210. Near term support is at last week's low of .7770 (the March Australian dollar has made higher weekly lows for three out of the last four weeks) and the 18-day Moving Average that it has closed below only once in the last month. A break below this near term support could temporarily signal the end of the bull run and take the market down to the current February low of .7591 in confluence with the current intermediate daily Fibonacci .618 retracement at .7577. A break below this price level could knock another penny off of the Aussie and take it to last month's low of .7475. (The Aussie dollar has only broken a previous monthly low once in the last seven months). If this low is broken the market could quickly visit the major daily Fibonacci .382 retracement at .7396 in confluence with the December low of .7388. Open Interest is at a two month high. The %R overbought/oversold indicator shows that the Aussie is overbought on the daily, weekly, and monthly charts Commercials are holding a new record size net short position. Large traders (hedge funds) are holding a new record size net long position. Small traders are holding a new record size net long position as well!

The March Canadian dollar/Australian dollar spread finds near term support at the current February low of .0236 (about two and a third cents) premium Canadian dollar. Further support is at the major weekly Fibonacci .618 retracement at .0148 (about one and a half cents). Near term resistance is at the current major daily Fibonacci .382 retracement at .0522 (about five and a quarter cents) premium Canadian dollar. Further resistance is found at the January high of .0694 (about seven cents) premium Canadian dollar in confluence with the current major daily Fibonacci .618 retracement at .0699 (about seven cents) premium Canadian dollar. If the rally does not end here the spread could make it to the current major daily Fibonacci .786 retracement at .0825 (about eight and a quarter cents) premium Canadian dollar or even the November high of .0878 (about eight and three-quarter cents) premium Canadian dollar.

The March British pound finds near term resistance at last week's one and a half month high of 1.8949. Further resistance is at the daily Fibonacci .618 retracement at 1.9071. A break out above this barrier could send sterling running for the contract high of 1.9446 or the weekly December high of 1.9500. Near term support is found at the current February low of 1.8456. Further support is at the monthly 18-bar Moving Average at 1.8106 (sterling has not closed below the monthly 18-bar Moving Average in nearly three years) followed by the major daily Fibonacci .618 retracement at 1.8020. Open Interest is flat. The %R overbought/oversold indicator shows that sterling is near overbought on the monthly chart. The pound has a seasonal tendency to drop in February. Commercials are bearish. Large traders (hedge funds) are bullish but not at an extreme. Small traders are neutral to bullish.

The March Swiss franc signaled a trend change last week when it rallied above a previous week's high for the first time this year and also closed above the 18-day Moving Average for the first time since January 3rd. Near term resistance is at last week's high of .8480. Further resistance is found at the current daily Fibonacci .618 retracement at .8616 in confluence with the January 12th reaction high of .8627. If the rally does not end here the Swissie may test the current daily Fibonacci .786 retracement at .8737. Near term support is located between the current February low of .8169 and the major daily Fibonacci .618 retracement at .8131. A break below this price zone could take the Swissie right to the psychological 80 cent mark. Open Interest is flat. The Seasonal index shows that the Swiss franc usually moves sideways for most of February and then declines in the last week of the month. Commercial interests are holding the biggest net long position since September of 2003. Large traders are holding the biggest net short position since then. Small traders are holding the biggest net short position since May.

The March Euro currency ended it's bearish descent last week when it made a clean break above a previous week's high and closed above the 18-day Moving Average for the first time in over a month. Near term resistance is located at last week's high of 1.3094 in confluence with the current major daily Fibonacci .382 retracement at 1.3099. Further resistance is spotted at the January 12th reaction high of 1.3303 in confluence with the current major daily Fibonacci .618 retracement at 1.3323. A break out above this level should clear the path for the Euro to test the major daily Fibonacci .786 retracement at 1.3483. Near term support is clustered at the February 7th, 8th, 9th, and 10th lows of 1.2735, 1.2738, 1.2743, and 1.2742. A break below this support zone should take the Euro right down to the major daily Fibonacci .618 retracement at 1.2490 or even the monthly 18-bar Moving Average at 1.2419. (The Euro has not closed below the monthly 18-bar Moving Average since the summer of 2002). Open Interest is flat. Seasonally, the Euro should continue to drop substantially in February.

The March Japanese yen finds near term support at the current February low of .009375. Further support is at the major daily Fibonacci .618 retracement at .009254. If the yen does not stabilize here it could decline to the psychological .009000 mark. Near term resistance is at last week's high of .009610 (the yen has made lower weekly highs for five consecutive weeks) and the 18-day Moving Average that it has not closed above since late January. Further resistance is at the current major daily Fibonacci .618 retracement at .009690 in confluence with the current February high of .009703. A rally above it could allow the yen to challenge the January high of .009864 or the contract high of .009885. If the March yen hits a new contract high expect it to visit the 2000 weekly high of .009974 in confluence with the late 1999 high of .009990. Open Interest is flat. The %R overbought/oversold indicator shows that the yen is nearing oversold territory on the daily chart. The yen has a seasonal tendency to move sideways to lower in February. Commercial interests are holding their largest net long position in four and a half months. Large traders are holding the biggest net short position in eleven months. Small traders are the least bullish since early October.Metals - April gold finds near term resistance at last week's high of $429.80 in confluence with the major daily Fibonacci .382 retracement at $430.20. Further resistance is at the major daily Fibonacci .618 retracement at $441.70. If the market can make it past this price level it should quickly test the late December high of $449.00 in confluence with the major daily Fibonacci .786 retracement at $449.90. Near term support is clustered between the current February low of $411.50, the major daily Fibonacci .618 retracement at $410.70, and the monthly 18-bar Moving Average at $409.40. (Gold has not closed below the monthly 18-bar Moving Average since July of 2001). A clean break below this support zone could hammer gold right down to the major monthly Fibonacci .382 retracement at $378.30 or even last year's monthly low of $372.00. Open Interest is low. The Seasonal index shows that gold should decline sharply until the end of March. Commercials are holding the smallest net short position since August of 2002. Large traders (hedge funds) are holding the smallest net long position since September of 2002. Small traders are neutral.

March silver finds near term resistance at last week's two month high of $7.455. Further resistance is at the daily Fibonacci .618 retracement at $7.515. After that look for silver to test the daily Fibonacci .786 retracement at $7.83 and fill the huge gap on the daily chart between $7.45 and $7.86. Near term support is at a daily chart gap between $7.04 and $6.98 in confluence with the current major daily Fibonacci .382 retracement at $7.03. Further support is at the current February low of $6.49 in confluence with the monthly 18-bar Moving Average at $6.48. (Silver has not closed below the monthly 18-bar Moving Average since June 2003). A break below this support zone could pressure the market to visit the intermediate weekly Fibonacci .786 retracement at $6.085 in confluence with the weekly September low of $6.065. Open Interest is sitting flat at a low level. The %R overbought/oversold indicator shows that silver is overbought on the daily chart. Seasonally, silver should rally at the beginning of February and then decline sharply from mid-February until early April. Commercials are the least bearish since June. Large traders (hedge funds) are the least bullish since late September. Small traders are neutral.

March copper finds near term resistance at last week's new contract high 150.00. If copper can clear this high it may explode to the 1988 multi-decade high of 160.65. Near term support is at last week's low of 142.50. (Copper has only broken a previous week's low once in the last six weeks). A drop below it could take the market to the current February low of 135.60. Further support is at the January low of 132.35 in confluence with the intermediate daily Fibonacci .618 retracement at 131.75. (March copper has not broken a previous month's low for the last eight months). If copper does not stabilize here it could plunge to the October low of 120.50. Open Interest is at a one and a half month high. The %R overbought/oversold indicator shows that copper is overbought on the daily and monthly charts. Copper has a seasonal tendency to move sharply higher in February. Commercials are neutral. Large traders (hedge funds) are neutral. Small traders remain neutral.Energies[/b] - March crude oil finds near term support at the current February low of $44.60 in confluence with the intermediate daily Fibonacci .618 retracement at $44.44. A break below it could send the market down to the weekly December low of $40.25 and the 2003 weekly high of $39.99 (old resistance). Near term resistance is at the January high of $49.75 in confluence with the major weekly Fibonacci .618 retracement at $49.77. This is closely followed by the November 30th reaction high of $50.40. If the market can take out this barrier look for a quick run to the contract high of $54.00. Open Interest is near the all-time high. The %R overbought/oversold indicator shows that crude oil is nearing overbought on the daily chart. The Seasonal index shows that crude oil should move sideways to lower in February. Commercial interests are neutral to bearish on crude oil. Large traders are holding the biggest net long position since October. Small traders are bearish.

March Unleaded Gas finds near term support at the current February low of 120.50 in confluence with the intermediate daily Fibonacci .618 retracement at 120.23. A break below the 120 mark could cause gasoline to spill to the daily December low of 109.00. Failure to stabilize here could pressure the market down to the weekly December low of 103.50. Near term resistance is at last week's high of 129.90. (Gasoline has made lower weekly highs for three consecutive weeks). A rally above it could allow the market to test the January high of 138.40. Further resistance is at the weekly October high of 144.50. If this high is exceeded gasoline could quickly hit last year's all-time high of 147.00. Open Interest is at a one month low. Seasonally, gasoline should decline in February. Commercials interests are holding the biggest net short position since late October. Large traders are holding the biggest net long position since early October. Small traders are neutral.

March natural gas finds near term resistance at last week's high of 6.195. (March natural gas has made lower weekly highs for the last four weeks). If this high is exceeded the market may test the January high of 6.72. (March natural gas has made lower monthly highs and lower monthly lows for three consecutive months). A rally above last month's high send the market to the current daily Fibonacci .382 retracement at 7.19. Further resistance is at the daily December high of 7.67. Near term support is at last week's low of 5.85. Further support is at the contract low of 5.77. A break to new contract lows could send March natural gas to the psychological 5.00 mark. Open Interest is at a two year high. The %R overbought/oversold indicator shows that natural gas is nearing oversold on the daily chart. Natural gas has a seasonal tendency to move sideways to lower until mid-February and then rally sharply in the second half of the month. Commercial interests are now the most bearish in two months. Large traders are now the least bearish in two months. Small traders remain neutral to bullish.Meats - April live cattle finds near term support at last week's one and a half month low of 85.35. A break below it could send the market to the December low of 83.45. Further support is at the November low of 82.00. Near term resistance is at last week's high of 88.05. A rally above may allow the market to make a run to the current February high of 89.62. Further resistance is at the contract high of 90.30. If April cattle hits a new contract high it could run to the weekly January high of 92.75 in confluence with the weekly December high at 92.95. Open Interest is near the all-time high. The Seasonal index shows that cattle should rally in a choppy fashion in February. Commercials are bearish. Large traders (hedge funds) are holding a large net long position. Small traders are holding the biggest net short position in over four years.

March feeders finds near term support at last week's one and a half month low of 98.30 in confluence with the major daily Fibonacci .618 retracement at 98.15. Further support is staggered between the January low of 96.25 (March feeders have only broken a previous month's low once in the last four months), the December low of 95.70, and the November low of 95.00. Near term resistance is at the current February high of 101.30 in confluence with the current intermediate daily Fibonacci .618 retracement at 101.35. A rally above it should take the market back up to the January high of 103.25. If this high is exceeded look for the market to test the contract high of 105.30. If March feeders break out to new contract highs look for a run to the major weekly Fibonacci .618 retracement at 111.32. Open Interest is now at a five year high. The %R overbought/oversold indicator shows that feeders are oversold on the weekly chart. Seasonally, feeders should move sideways to slightly lower in February. Commercial interests are getting bullish again. Large traders are holding the biggest net long position since late June. Small traders are holding the biggest net short position since October of 2003.

April lean hogs find near term support at the current February low of 71.65. Further support may not be found again until the major daily Fibonacci .382 retracement at 68.97 in confluence with the December low of 68.70. Near term resistance is at last week's high of 74.55 (April lean hogs have made lower weekly highs for the last four weeks) and the 18-day Moving Average that it has not closed above for a month. A rally above it could indicate that the down trend has been terminated and send the market up to the current daily Fibonacci .618 retracement at 75.95. If the rally does not end here April hogs may visit the contract high of 78.60. A break out to new contract highs could send April hogs right to the 2004 weekly high of 82.70. Open Interest is at a three month low. The %R overbought/oversold indicator shows that hogs are near overbought on the monthly chart. Hogs have a seasonal tendency to drop substantially in February. Commercials are holding their biggest net long position in just over a year. Large traders (hedge funds) are holding the smallest net long position in eleven months. Small traders are holding a very large short position.Grains - March soybeans find near term resistance clustered between last week's two month high of $5.61, the current intermediate daily Fibonacci .382 retracement at $5.61, and the November high of $5.65. If the rally does not end here look for March soybeans to test technical resistance clustered between the current intermediate daily Fibonacci .618 retracement at $5.994, the major daily Fibonacci .382 retracement at $6.086, and a daily chart gap between $6.06 and $6.23. Near term support is at the current February low of $4.984. A break below it could crush soybeans and send it the 2002 low of $4.154 or the 1999 multi-decade low of $4.014. Open Interest is almost at an eleven month high. The %R overbought/oversold indicator shows that beans are overbought on the daily chart and oversold on the weekly chart. The Seasonal index shows that soybeans usually establish an important bottom in mid-February and then rally into the summer. Commercial interests sold a fraction of their record size net long position. Large traders covered a small amount of their record size net short position. Small traders are the least bearish in six months.

March soy meal finds near term resistance at last week's multi-month high of $174.00. Further resistance is at a daily chart gap between $177.30 and $178.30. If the gap is filled soy meal could make it to the major daily Fibonacci .382 retracement at $185.30. Near term support is located between the contract low of $148.10 and the weekly 2002 low of $145.40. Further support may not be found again until the 1999 multi-year low of $120.30. Open Interest is starting to decline. The %R overbought/oversold indicator shows that meal is overbought on the daily chart and oversold on the weekly and monthly charts. Seasonally, soy meal should post an important seasonal low in mid-February. Commercials sold a little bit of their record net long position. Large traders (hedge funds) covered a small amount of their record net short position. Small traders remain very bearish.

March bean oil finds near term resistance between last week's one month high of 20.40 and the January high of 20.55. (March bean oil has made lower monthly highs for the last four months). If these highs are exceeded look for the market to hit the current intermediate daily Fibonacci .382 retracement at 21.41 or the December high of 21.63. Further resistance is found at the November high of 22.03 and the October high of 22.15. After that March bean oil could put on another penny and hit the current intermediate daily Fibonacci .618 retracement at 23.01. Near term support is at the contract low of 18.82 in confluence with the major weekly Fibonacci .786 retracement at 18.81. Further support is at the psychological 18 cent mark. Open Interest is starting to decline. The %R overbought/oversold indicator shows that bean oil is oversold on the weekly chart. Bean oil has a seasonal tendency to rally from February thru May. Commercial interests sold a fraction of their record net long position. Large traders covered some of their biggest net short position since the summer of 1999. Small traders are still the most bearish since October of 2001.

March corn finds near term resistance at last week's one month high of $2.016. Further resistance is at the January high of $2.096. (March corn has made lower monthly highs for eight consecutive months). If the market can clear last month's high expect it to test the current minor daily Fibonacci .382 retracement at $2.166 or the November high of $2.19. Further resistance is at the current minor daily Fibonacci .618 retracement at $2.31. Near term support is found between the contract low of $1.942 and the 2002 low of $1.914. Further support is at the 2001 low of $1.84. Open Interest is at a ten month high. The %R overbought/oversold indicator shows that corn is still oversold on the weekly and monthly charts. The Seasonal index shows that corn should move sideways for most of February and then establish an important seasonal low at the end of the month. Commercials sold a small amount of their record net long position. Large traders (hedge funds) are holding a near record size net short position. Small traders remain very bearish.

March rice finds near term support at the daily double bottom between last week's low of 6.49 and the contract low of 6.47 in confluence with the major weekly Fibonacci .618 retracement at 6.445. Further support is at the psychological 6.00 mark. Near term resistance is at last week's high of 6.90. A rally above it could allow the market to test the current major daily Fibonacci .382 retracement at 7.72 or the daily double top December high of 7.85. Further resistance is at the current major daily Fibonacci .618 retracement at 8.49. Open Interest is at the highest level since mid-October. The %R overbought/oversold indicator shows that rice is oversold on the daily and weekly charts. Seasonally, rice should decline from the start of February until early May. Commercial interests are the most bullish in three months. Large traders (hedge funds) are the most bearish since the end of November. Small traders are neutral to bullish.

March oats find near term support at last week's one and a half month low of $1.56. Further support is at the January low of $1.52 in confluence with the December low of $1.51. (March oats has made higher monthly lows for four out of the last five months). If these lows do not hold expect the market to hit the October low of $1.434. Near term resistance is at last week's high of $1.642. (March oats have only broken a previous week's high once in the last four weeks). A rally above it could allow the market to test the January high of $1.73. Further resistance is at the September high of $1.77. A break out above this high should send March oats right up to last year's weekly high of $1.85. Open Interest is at a one month low. Oats have a seasonal tendency to move sideways in the first week of February and then decline sharply for the rest of the month. Commercials bought back some of their biggest net short position since mid-May. Large traders (hedge funds) sold off some of their biggest net long position since early May. Small traders remain neutral.

March wheat finds near term resistance at last week's one month high of $3.022 in confluence with the weekly 18-bar Moving Average that it has not closed above since May. Further resistance is at the current minor daily Fibonacci .382 retracement at $3.116 in confluence with the January high of $3.12. A break out above this high could send the market up to the November high of $3.314 followed closely by the October high of $3.36. Near term support is found between the contract low of $2.87 and last year's weekly low of $2.824. Further support is at the monthly 2003 low of $2.73 followed by the major monthly Fibonacci .786 retracement at $2.676. Open Interest reached a new all-time high again. The Seasonal index shows that wheat should move sideways for the first half of February and then drop sharply for the rest of the month. Commercial interests sold a small amount of their record size net long position. Large traders covered some of their record net short position. Small traders are the least bullish since August.Softs[/b] - March coffee finds near term resistance at last week's five year high of 119.50. Further resistance is at the 2000 high of 126.00. If coffee tears thru this high look for a rally to the 1999 high of 145.00 in confluence with the major monthly Fibonacci .382 retracement at 147.10. Near term support is at last week's low of 111.80 (March coffee has made higher weekly lows and higher weekly highs for five consecutive weeks) and the 18-day Moving Average that it has not closed below for over a month. A break below this near term support could end the bull run in coffee and take it down to the current major daily Fibonacci .382 retracement at 101.10. Further support is at the January low of 95.10. (March coffee has made higher monthly lows for five consecutive months). A break below last month's low could cause a decline to the current major daily Fibonacci .618 retracement at 89.70 in confluence with the current major weekly Fibonacci .382 retracement at 89.70. Open Interest is still very high. The %R overbought/oversold indicator shows that coffee is overbought on the daily, weekly, and monthly charts. Seasonally, coffee should rally in February. Commercials are still holding a new record net short position. Large traders (hedge funds) are still holding a new record net long position. Small traders are neutral.

March cocoa finds near term resistance at last week's two month high of $1,633. Further resistance is at the major daily Fibonacci .618 retracement at $1,680. A rally past this price should take the market up to the December high of $1,723 or the daily Fibonacci .786 retracement at $1,736. Near term support is at last week's low of $1,552 (cocoa has made higher weekly lows for five consecutive weeks) and the 18-day Moving Average that it has closed above most of the time over the last month. Further support is close by at the current February low of $1,540 in confluence with the current daily Fibonacci .382 retracement at $1,534. If all of this near term support fails to hold cocoa up the market could quickly hit the January low of $1,472. Further support for May cocoa is at the October low of $1,423. Open Interest hit a four and a half month low last week. The %R overbought/oversold indicator shows that cocoa is overbought on the daily chart. Cocoa has a seasonal tendency to move sideways for the first half of February and then drop in the second half of the month. Commercial interests are holding the largest net short position in two and a half months. Large traders are holding the largest net long position in two months. Small traders also increased the size of their large net long position.

March sugar finds near term support at last week's low of 8.83. A break below it could take the market down to an intermediate daily Fibonacci .618 retracement at 8.72 in confluence with the current February low of 8.71. Further support is at the January low of 8.51 (March sugar has made higher monthly lows for ten out of the last eleven months) or the December low of 8.44. After that the market could drift down to the major daily Fibonacci .382 retracement at 8.13 in confluence with the daily August low of 8.13. Near term resistance is located between the January high of 9.33 and the contract high of 9.37. Further resistance is at the intermediate weekly Fibonacci .786 retracement at 10.02. A strong close above ten cents could send sugar soaring to the 2000 high of 11.40 in confluence with the major monthly Fibonacci .618 retracement at 11.45. Open Interest is starting to decline. The %R overbought/oversold indicator shows that sugar is overbought on the monthly chart. The Seasonal index shows that sugar should move higher for most of February and then decline sharply in the last week of the month. Commercials are holding a new record size net short position. Large traders (hedge funds) are holding a new record size net long position. Small traders are also holding a new record size net long position.

March orange juice finds near term resistance at the current February high of 86.75. Further resistance is at the December high of 89 cents. A break out above this high could send the market up to the contract high of 93.50. Near term support is at last week's low of 82.70. (March OJ has only broken a previous week's low once in the last six weeks). A break below it could cause a sell off to the January low of 77 cents in confluence with the December low of 76.90. (March OJ has made higher monthly lows for four out of the last five months). If these lows are broken OJ could go right to the major daily Fibonacci .618 retracement at 74.95. Further support is at the weekly November low of 69.20. Open Interest is dropping. Seasonally, OJ should drop sharply in February. Commercial are the least bearish since mid-June. Large traders are holding the smallest net long position since the beginning of July. Small traders are the least bullish since September of 2003.

[font=arial,helvetica,verdana][size=2]March cotton finds near term resistance at last week's high of 46.95. Further resistance is at the January high of 48.31. If this high is exceeded the market may rally to the