Commodities Report

non sto seguendo le bistecche e cotolette, ho solo notato che c'è una coincidenza di segnale giornaliero e settimanale di vendita sul Live Hog (maiale) di febbraio Mi sembra uno short da put

I commenti sono giù

PB

il precedente PB ed ora LH che rompe un bel canale

Salve a tutti, riprendo il mio precedente post per segnalare la rottura on close sul grafico daily dell' Live Hog.....che, (speriamo bene), porterà finalmente giù il Pork Bellies, contratto molto più volatile e pesante! Anche sul grafico si PB è gia avvenuta la rottura al ribasso di un H%S ribassista! Personalmente ancora SHORT su PB! e lunedi in apertura se non pesante, SELL LH market. Mr. Zibordi che ne pensa?? p.s. x Giorgia: come si fà ad inserire nel portafoglio del forum il Sell già segnalatovi anche per email?

riprovo

grafico

Per completezza il frafico daily di PB che auspica rpttura della base. Sarebbe interessante un parere da parte di GZ che presumo sia LONG o abbia, da quanto capito, una prospettiva ancora lunga sul settore! saluti

grafico LH weekly in formazione un bel conteggio a 13 e se fate il daily ben visibile il canale che ha formato....

Volevo dare il mio contributo su alcune commodity che offrono, secondo me, ottimi spunti operativi tipo il PB - Pork Bellies, graficamente ai massimi storici, anche se con volumi assolutamente mediocri da molto tempo e con un bel 13 di countdown mensile. la cosa interessante sono i dati usciti a chiusura di mercato ieri che evidenziano come le scorte di carni rosse surgelate sono aumentate del 1% in più di un mese fa e del 9% in più rispetto a un anno fa. Le scorte invece di maiale congelato sono aumentate del 1% rispetto a un mese fa ma diminuite del 2% in relazione a un anno fa.tra queste gli stocks di Pork Bellies sono saliti del 113% relativi al mese scorso e di un 3% a confronto dell'anno scorso. personalmente sono short da un pò (soffrendo un pò nelle ultime settimane) ma il report di ieri potrebbe affondare lunedì il titolo che giè dimostrava la recente debolezza..percio SHORT PBG05 Starei attento anche ai maiali che fanno da trascinatori del PB e sui quali attendo la rottura del canale ben delineato ed allegato nella prossima .gif. Saluto tutti i partecipanti al forum, rinnovando i complimenti a GZ per la bontà dei suoi puntuali commenti.. ragazzi a tutti un Sereno Natale!!! Frank

mercoledì 07 maggio 2003 -- THE HIGHTOWER REPORT ENERGY MARKET COMMENT & STATS The energy complex saw a fresh wrinkle in the action Tuesday, as Russia indicated that they would be set to increase oil production in May by 10%. With a production of 8.23 million barrels per day, Russia continues to see their production total climb back toward the late 80's when they almost produced 12 million barrels per day. With the energy complex recently seeing evidence that Venezuelan production was rising to 3.2 million barrels per day, we are seeing plenty of signs of rising supply. However, until that supply begins to show up in the US, prices stand a chance of avoiding significant liquidation. There is the expectation that crude stocks will rise by 2.5 million barrels in the weekly inventory reading this morning. Given the persistent return to weak price patterns, we would not underestimate the impact of a bigger than expected crude stock build. In other words, traders still have to be fearful of a supply bulge. In the end, an overly short spec & fund position will not prevent a sharp slide in prices if there is evidence of "aggressive" supply rebuilding. We stand by our $26 fair value pricing projection, but periodic spikes down to $25 should not be ruled out. In conclusion, this market will not weather "overtly" negative API/DOE readings (a crude stock build in excess of 3 million barrels) without some weakness. It should also be noted in the last 24 hours the world has seen a downgrading of economic prospects and that could serve to accentuate price weakness if the inventory numbers feed the bear case today. NATURAL GAS: Part of the unjustified natural gas rally was extracted Tuesday. The anticipation of a big injection Thursday combines with the weaker regular energy complex price action to favor the bear camp in the coming sessions. However, the price spike early in the week sends a message that natural gas has better fundamentals than the crude oil market and still has some potential. However, we do not see the weather influencing prices significantly from a temperature basis, but traders need to watch for any developing Atlantic storm patterns. The weekly injection is expected to be 80 to 95 bcf, which is slightly bearish. Therefore, given the potential weakness in the regular energy complex, we see June natural gas falling toward chart support of $5.25 but with resistance seen up at $5.75 price volatility is certainly a possibility. ---------------------------------------------------------------------- mercoledì 07 maggio 2003 -- THE HIGHTOWER REPORT MORNING STOCK COMMENT CHANGE to 4:15 AM:S&P-330 DOW -26 NIKKEI +26 FTSE -3.0 Considering the recent action in the Bond market and the slide in the US Dollar, one has to be very impressed with the action in the stock market yesterday. Some might suggest that either bonds or stocks are in error, in their outlook on the economy, but one making that statement might be discounting the fact that stock prices might have been relatively undervalued coming into the month of April. In other words, stock prices prior to April were not factoring a recovery, they were factoring some pretty ugly future conditions. As an example of how things are better than what the market is giving credit for, we cite the CISCO earnings report reaction overnight. A year ago the trade was seeing all kinds of experts predict a multi year slump in the high tech sector. In some cases predictions were made that the backlog of chips might not be cleaned up until well into 2004 and that business spending would remain "bad" for several quarters. From our view, the CISCO earnings report suggests "tech" is recovering but the market was hoping for a big improvement. In other words, in less than a year, we have come from a view that the industry wasn't going to recover, to a condition in which the market is interjecting lofty expectations! Considering that Treasury market dialogue is extremely negative toward the economy and there is concern over the falling Dollar, it would seem like stock market is simply in a "better place". In other words, stock price gains look to continue but the bulls will have to fight a tide of cynicism. The war is over, energy prices are falling, a stimulus package might be coming and US exporters are benefiting from a lower Dollar. In conclusion, the stock market maintained gains in the face of a pretty negative FOMC result and that shows this market is in a bull market posture. We do concede that current price levels are technically overextended and therefore vulnerable. DOW: We see the biggest risk to the market today being a desire to bank profits. However, the sellers might not be able to gain control without some headline help, as long-term investors are slowly returning to the market. Critical support is seen today at 8,515, while another up side breakout takes place with a rise above 8,600. If the market were to climb today, without any "new news", that would go a long way toward convincing the doubters that we are in fact in a mini bull market. S&P 500: Until the June contract rises above the December high, we doubt that the general upward bias will be knocked out of position. In other words, unless some surprise negative surfaces, traders might not decide to bank profits, even if the market is technically over extended. Critical support comes in today at 928.10 but another breakout is seen with a any trade action above the 940 level. ---------------------------------------------------------------------- mercoledì 07 maggio 2003 -- THE HIGHTOWER REPORT MORNING METALS COMMENT OVERNIGHT: Minor setback as Asian buyers show slightly less long interest. GOLD: Despite a lack of clear-cut direction from the Dollar and the Asian gold market, the overnight gold futures appear to be prepared to rally. We have to think that the steep Dollar slide Tuesday is the type of action that solidifies long-term investment interest in gold, especially if the Euro manages to rally another 200 points before the issue of intervention surfaces. With the shares of a major gold producer possibly coming under pressure due to legal wrangling, (labor issues) it is possible that gold futures continue to be seen as an interesting investment alternative for those that think gold prices are headed higher. Since the April low, the gold market has seen a series of 3-5 day consolidations but has usually managed to forge an upside breakout following those formations. Again we don't expect the gold rally to be violent and there is certainly the potential to see $4-$5 corrections on any given day. With weaker economic stats coming from the Euro zone today it is possible that the pressure on the US Dollar temporarily abates and that could in turn mitigate the long interest in gold. Critical pivot point in the June gold today comes in at $342.4 but real solid support doesn't come in until $338.5. SILVER: Like gold, the silver bull trend will not be without some corrective action and therefore current support in silver doesn't come in until $4.74 and that would seem to allow for a moderate dip without injuring the up trend. While silver hasn't shown much correlation to physical demand issues, we have to think that recent macro economic revelations and the threat against the Asian economy is holding back silver. The US Fed reading on the US economy was bad, the EU numbers today are soft and we already know that Asian activity is being pinched by the SARS virus and that means that silver is maintaining its stellar April gains in the face of bearish fundamentals. Fresh longs have to wait for a correction to $4.72 in the July before entering long-term silver plays. PLATINUM: While the macro economic case hasn't been that favorable over the last 24 hours, the platinum market is apparently getting itself in a much better technical posture. While some might suggest that platinum is forging a rally in a bear market, a trade above $624.5 would see the market climbing above a critical down trend channel resistance line. The platinum would be back above a critical moving average line on a rally to $626 today. COPPER: The copper market is peaking out above recent chart resistance and that could be because the WHO (World Health Organization) is praising Hong Kong and Chinese efforts to control SARS. While the outbreak continues, there is the feeling that it is about to peak. In other words, there is hope but the numbers don't show an arrest of the disease. Apparently, less than stellar economic statements from the US Federal Reserve did not undermine Asian copper prices. Supposedly, the falling Dollar is making the US copper market more attractive on an arbitrage basis and that is certainly something that could carry prices in the near term. We still think that a containment of the SARS issue will result in a quick appreciation in July copper, to the top of the last month's consolidation up around 74.55. A major copper producer is apparently going to re-evaluate production cuts next month and that could become a major issue for copper prices. ---------------------------------------------------------------------- mercoledì 07 maggio 2003 -- THE HIGHTOWER REPORT MORNING FOREIGN EXCHANGE COMMENT DOLLAR: The fact that the Dollar can't rally on days in which the trade thinks the ECB is going to cut rates, while the US is apparently on hold WITH RATES, suggests that the interest rate differential isn't behind the slide in the Dollar. Furthermore, seeing the Dollar fail to rally on news this morning that German job losses continue to mount is a sign that the Dollar isn't capable of getting a lift off the economic differential. In short the Dollar wants to go down and the market is not looking for reasons to alter that trend. Even with some sources suggesting that some intervention might be ahead, to support the Dollar, it hangs near new contract lows. We are not sure what changes conditions and good traders will simply suggest that one should follow the trend. Next downside targeting in the June Dollar would seem to come off the monthly charts and the December 1998 consolidation low, which is another 240 points below the current market. EURO: The German labor office suggested that they have structural problems with the 44,000 loss in jobs in April. Furthermore, the market is now expecting the ECB to cut interest rates and that might be the reason why the Euro isn't taking profits off the recent rise. We are equally surprised that the Euro is showing only minor weakness today, with the German labor office suggesting that they don't see an improvement in the labor condition until 2004! In the end, the market really doesn't care about short-term economic developments, as it is sticking with the trend. YEN: Reports that Japanese auto imports fell for the first time in 5 months suggests that the Japanese economy remains soft and that a bigger rise in the Yen might be needed before any change in import patterns is documented. In fact, we would not be surprised to see the Yen rise all the way to the March highs, especially since the World Health Organization is hinting at a possible control of the SARS virus. SWISS: We see the slight weakness in the Euro zone economy as being a benefit to the Swiss, as some traders might want a play against the Dollar, but don't want to bet on the Euro zone economy. However, the Swiss is overbought and vulnerable to a correction. Near term support is seen down at 74.84. POUND: Traders are suggesting that a MPC rate cut Thursday, might be possible and that is supposedly sparking some buying of UK stocks. However, the Pound is overbought and slightly vulnerable in the near term. Correction support is seen down at 159.80. The trend is still up but it might see a pause today and Thursday. CANADIAN: The Canadian gapped higher overnight and soared aggressively but then fell sharply off the highs and that might mean that the market is indeed overextended and in need of a correction. Recent economic readings have been soft causing some longs to consider taking profits. We still see 75.00 as a target but given the blistering pace of the gains since mid April, traders should expect wild volatility ahead. ---------------------------------------------------------------------- mercoledì 07 maggio 2003 -- THE HIGHTOWER REPORT MORNING FINANCIAL COMMENT FINANCIALS:5/7 OVERNIGHT CHANGE to 4:15 AM :BONDS +12 One has to give credit to the bond bulls, as they have held onto their view that the world economy is still weak and they are getting confirmation from the headlines that is indeed the case. However, it would appear that the divergence between the stock market action and bond market action will continue and that bonds will even be able to rise in the face of significant declines in the US Dollar. In the end, the Fed message is that the economy remains weak and that there is still a greater risk of deflation than inflation. The idea that the Fed wants to flatten the yield curve isn't surprising, as that would certainly fit the need to give the economy all the help it can muster. The fact that Treasuries managed to remain strong despite a lackluster Treasury auction, highlights the ongoing view that the economy remains in the doghouse. In the mean time, it would seem like the bonds and notes will be capable of mounting a rise to the March highs, as the recovery in the economy following the end of the war simply hasn't showing itself yet. Traders that got long futures against multiple long put positions will weather this rally by financing their put positions with the current rally, while those short futures will probably be forced from position. The US political machine is apparently going to extend the debate over stimulus action so far into the future, that any stimulus will come well after the economy has managed to recover on its own. About the only thing the bear camp has in its favor today, is that the economic report slate contains unimportant reports and that the second wave of the auction today, might go as poorly as the first offering. However, all the bears can hope for, is mitigated gains on the upside, as the market would seem to lack the potential for an aggressive downward thrust. In the end, the Fed couldn't say anything positive toward the economy so they said very little. The inventories report early probably helps the bulls while the consumer credit report into the close might favor the bear camp. ----------------------------------------------------------------------

martedì 06 maggio 2003 -- THE HIGHTOWER REPORT ENERGY MARKET COMMENT & STATS The energy complex managed to repel off the lows Monday, in what might be a sign that the market is capable of forging a cyclical bottom above $26.00 in the June contract. Even with the energy complex confronted with the idea that Venezuelan production had reached 3.2 million barrels per day, the market managed to climb off the days lows. Furthermore, the market is also anticipating a 2.5 million barrel build in the weekly inventory report and that could have been a slightly damaging projection. However, some traders suggest that part of the $12 slide in crude over the past two months was prompted by the idea that the war was ending but it was also predicated on the idea that given increased OPEC production, that a major supply build would take place in the period following the war. In fact, as of the last API/DOE report, US crude stocks were still 37 million barrels below year ago levels. In other words, the US is not seeing a rapid rebuilding of stocks. However, some traders are suggesting that another crude stock build in the reports Wednesday would be the 4th in a row and that is a pattern that should not be discounted. Gasoline stocks as of last week were running roughly 4 million barrels below year ago levels and that suggests that gasoline prices could easily see as much volatility as last year. In fact, nearby unleaded prices currently are running roughly 2-4 cents under year ago levels and 32 cents below the surprising May 2001 gasoline spike. If one combines the continued tight fundamental conditions, with the oversold technical condition, we have to think that the market will manage to avoid a significant slide below last weeks lows. Naturally a major negative development in the world economy, or a surprise build in the weekly inventory reports could rekindle the bear spirit, but for the near term, that type of move seems to be against the odds. Therefore, we would continue to monitor short put opportunities in the unleaded and the crude oil markets because we think there is value just under this market but maybe not much upside as was present during the Iraqi uncertainty. In order for the upside to revitalize Venezuelan politics will have to flare, Nigerian labor issues might have to back slide, or some other critical supply disruption will have to be seen. NATURAL GAS: The fundamentals were not apparently the main factor behind the spike rally in natural gas Monday, as the cash trade suggested that thin volumes allowed the move to unfold. There were supposedly some unplanned power plant outages and that resulted in unusually high demand for replacement, or alternative power. However, with the market still holding relatively close to a record spec long position and traders expecting a large inventory build later in the week, we view the rally Monday with some skepticism. Some traders claimed that below normal temps caused the spike, but we assume the Eastern seaboard power troubles fueled the rally and not late season heating needs. Late in the week, the trade is expecting a rather large 90 bcf inventory build and that should be enough to discourage follow through buying. Those that took our suggestion last week to buy natural gas futures and buy multiple natural gas puts, should have enough futures profit to pay for a large portion of the put premium. ---------------------------------------------------------------------- lunedì 05 maggio 2003 -- THE HIGHTOWER REPORT MORNING STOCK COMMENT CHANGE to 4:15 AM:S&P+410 DOW +34 NIKKEI +43 FTSE Closed The stock market comes into the week in a decent position, as the gains last week gave the weekend talking heads a reason to be optimistic. We suspect that the stock market will continue to claw higher, despite the fact that the US economy is throwing off signs of stagnant momentum. The fact that Hong Kong is suggesting that the pace of new SARS cases is slowing is positive, but some traders think that SARS hasn't been a major issue holding back stock prices. With the FOMC meeting Tuesday, we expect the Fed to suggest that the US recovery is uneven but that geopolitical headwinds are in the process of lifting. We also expect the Fed to suggest that the negative effects of the war in Iraq are already lifting but we suspect the Fed will acknowledge that it could take a while before consumers are ready to throw money around. We also have to think that the trade will be keeping an eye on the Dollar, which made fresh four year lows last week and will be a source of concern if more new lows are forged this week. We continue to see stock prices rising at least until the January highs are tested and perhaps until the December 2002 highs are encountered. In the end, one has to assume that things are getting better and that stock prices should rise. In fact, in the near term one shouldn't be so concerned about how strong the recovery will eventually be, or how high stocks will eventually run, because it is our opinion that investors are best served by buying this market before it factors in most of the improving near term outlook. DOW: The next upside target in the June Dow comes in up at 8832, while near term support should be garnered off the April consolidation highs of 8502. In fact, some traders think that the 8600 level should really become the base from which prices will trade "above" for the coming months. Considering that the Dow was net short in the fund and small spec COT report, as of last Tuesday, one might suggest that this market is a long way from becoming technically overbought! The biggest question we have is will the market be able to muster enough momentum to drive prices consistently higher? S&P 500: The June S&P looks like it might make a run at the January highs (933.50) in the action today. Like the Dow futures, the S&P futures were recently net short in the small spec and fund COT position report and that should leave the market with plenty of fuel to rally. Thin chart resistance is seen at 938.40 but the bias has to be considered higher. Buy breaks to 927.40 in the June S&P, risking the position to 922. ---------------------------------------------------------------------- lunedì 05 maggio 2003 -- THE HIGHTOWER REPORT MORNING METALS COMMENT OVERNIGHT: A minor upward bias seen but the trade lacked significant interest. GOLD: The net spec long position in gold was hardly changed from the prior weeks reading, but with the gains since the report was taken, we have to peg the spec long coming into this week at 62,000 contracts, which is long but not without additional buying capacity. The SARS issue seems to be in a lull, with reports again suggesting that the pace of new cases in Hong Kong might be slowing. With the Bank holiday in London today, the US session is left to guess at the opening, with the Asian trade showing minimally higher action. In order to stay positive the June gold will have to hold above $334 on a close basis but fresh longs in from current levels might have to risk all the way down to $327 just to ride out near term fluctuations. The US Dollar showed very little extension in the bounce off the downside breakout last week and therefore the Dollar will continue to generally support gold prices. In fact, a trade back below 96.66 in the June Dollar Index might be cause for gold to attempt another upside pulse. Considering the action last week, we would expect gold to continue the upside tilt, especially if the driving force behind gold is a long-term investment interest, instead of the typical short-term flight to quality interest. SILVER: The net spec long in silver is about 3,000 contracts above the prior weeks reading but silver prices are almost 20 cents an ounce higher than when the COT report was measured. Therefore, silver might have a net spec long position of 40,000 to 45,000 contracts, which is again slightly overbought but not "bought-out". We get the sense that the market is capable of holding above $4.70 and might be capable of clawing its way up to the January consolidation pattern of $4.80 to $5.00. The silver market still needs solid leadership from gold to continue forging upside gains. PLATINUM: The platinum market appears to be consolidating above last weeks lows but unless the stock market can provide consistently positive leadership, we doubt that the downside run is complete. We get the sense that the $585 level is an extremely critical support level but we do think that the last 3 months action suggests that some change in supply patterns have been seen from Russia. In other words, for platinum to have declined so sharply when it appears that the world is getting beyond the geopolitical cloud, strongly suggests that platinum is no longer feeding off the tight supply/strong demand environment. ---------------------------------------------------------------------- lunedì 05 maggio 2003 -- THE HIGHTOWER REPORT MORNING FOREIGN EXCHANGE COMMENT DOLLAR: About the best thing that can be said of the Dollar is that it is oversold. It would appear that the Dollar might try to bounce today but that could be because of the holiday thinned trade in London. We have to think that the pace of the US economy is hardly an attraction for currency, unless the Fed Chairman surprises the trade with a better-than-expected outlook for the US economy. In the mean time, we still get the sense that money is making long term allocation changes in an effort to geographically diversify. In other words, the trade might not be paying much attention to the interest rate differential or the economic differential. In fact, until there is some distinction between the US and European economies, it might be difficult to determine just what is driving currency rates. In the mean time, the trend is down in the Dollar until there is cause to alter that view. Since the Dollar is oversold it would not be surprising to see the Dollar bounce to 97.32 but a close above 97.45 might suggest that something has changed. EURO: Just as the Dollar is oversold, the euro is overbought. As we also mentioned in the Dollar section, we suspect that long term geographical diversification will continue to benefit the Euro but until one economy or the other shows itself and theEuro continues to rise in the face of that news, we are unwilling to suggest that the Euro is going to rise indefinitely. We don't see the Euro sliding back below 111.59 basis the June contract. YEN: Considering that the SARS news out of China is a little less negative this morning, it might be possible for the Yen to forge a climb toward resistance of 84.33. However, some traders are concerned that the Yen hasn't been able to get beyond the recent consolidation highs of 85.00 for the past 7 months! In other words, the fact that the Yen hasn't benefited more from the Dollar slide is quite limiting to the bull camp. SWISS: We enter the week with slightly less anxiety toward the SARS situation and perhaps slightly less macro economic anxiety and that weighs on the Swiss. Near term trend line support in the Swiss comes in all the way down at 73.15, which highlights the rather steep climb in the Swiss over the last month. Therefore, the Swiss is technically vulnerable to a moderate correction. POUND: With a holiday trade it might be unwise to voice concern over the overnight action in the Pound, but the charts look vulnerable especially if the June Pound slides back below 159.64 today. CANADIAN: The Canadian might be a little over extended in the short term and with the market just barely able to maintain prices above the last two closes of 70.22 and 70.26, we have to view that area as a critical pivot point. The path of least resistance is still up but one does have to consider the technicals. ---------------------------------------------------------------------- martedì 06 maggio 2003 -- THE HIGHTOWER REPORT MORNING FINANCIAL COMMENT FINANCIALS:5/6 OVERNIGHT CHANGE to 4:15 AM :BONDS -5 The trade is mostly expecting the Fed to confirm that the US economy remains in a soft spot. The trade is also positioned to think that the war was not the only thing holding back the economy. In other words, a large portion of the trade is under the assumption that the US economy suffered some structural blow and that conditions won't get better in the near term, even with less geopolitical restraints. In fact, the bull camp in bonds will get every chance today to take down more precious Treasury supply, as the US Treasury is set to float more Notes. The Treasury kicks off a 3-part $58 billion refunding today, with $22 billion in 3-year Notes, $18 billion in 5 year Notes on Wednesday and another $18 billion in 10-year notes on Thursday. In short, the upcoming supply float should give would-be longs plenty of opportunity to soak up some supply. A survey of economists reveals almost no chance of a rate cut by the Fed but the market will be dissecting the Fed statement for signs of what might come in the next meeting. We also think that the bond market has managed to hold at such lofty levels (despite the stock market rally) because some in the trade think that the Fed is going to point out ongoing concerns within the economy. In other words, the market might be leaning a little too much on the idea that the soft spot is going to be reconfirmed in the statement today. With the layoff report yesterday showing a massive increase (in April when compared to March) some are thinking that the economy is going to get worst before it gets better. We do have to concede that the economy certainly hasn't gotten as much of a euphoria lift following the end of the war and with the Dollar falling so consistently, there is certainly cause for concern toward the recovery pace. However, if one looks forward, instead of backward, both bonds and notes look expensive at current price levels. We think that the Fed will suggest that the US economy is poised to recover, without divulging a clear-cut opinion on where it currently stands. Define the coming range in the June bonds as 113-16 to 114-16, with June notes expected to fluctuate in a range bound by 114-20 to 114-31. ----------------------------------------------------------------------

lunedì 05 maggio 2003 -- THE HIGHTOWER REPORT ENERGY MARKET COMMENT & STATS The energy complex would appear to be penting up for a failure below the recent lows. We are a little surprised that the market hasn't been able to respect critical support at $26.00 basis the June Crude oil, especially with the spec and fund position already known to be net short. In fact, according to the last COT report the small spec and fund combined short reached 48,000 contracts. However, since that report was compiled the market has rallied slightly, meaning that the net spec short is coming down. In other words, the slight bounce last week might make it easier for the market to see a limited downside probe early this week. The fact that the Nigerian oil hostage crisis seems to be calming down, is apparently a slight negative to prices, as that should reduce the chance that large oil companies will shut down production throughout the Nigeria just to safeguard workers. In a longer-term negative story, the Brazilian President suggested that his country should be prepared to double it s ethanol output (the majority of that ethanol is derived from sugar feedstocks while US ethanol production comes primarily from corn). The Brazilians hope to step up ethanol production in an effort to meet the growing needs of developing countries and that suggests they intend to reach a large export status. We continue to be concerned about the perception of sagging energy demand in Asia, which would come if China has to be isolated to control the spread of SARS. Right now, it could take a rapid spread of SARS, or a massive weekly inventory build in crude to press energy prices markedly below the recent lows. However, we have already suggested that it could be hard for the market to throttle downward, given the technical condition of the market and that is why it will take an added push from a demand shock, or a tangible supply rise to get the market rolling on the downside. With the anticipation of slightly higher inventories later this week, the end of the Nigerian hostage situation and the uncertain economy, the trade should be able to forge minor probes down but the technical condition should quickly temper the selling. On a decline below last week's lows, we would be inclined to sell some July out-ofthe-money crude oil puts ($24 strike for 90 cents or more) for a position play. NATURAL GAS: Considering the weather forecast, the recent inventory build and the moderately large ongoing small spec long position, it is possible that June natural gas manages to retest the early April lows down around $5.00. We suspect that anticipation of summer demand and the idea that the coming hurricane season is expected to be active will discourage the small specs from exiting. However, if the June contract slides below critical chart support of $5.19 that could prompt the small specs to liquidate. Unless there is some reason to really fear some disruption of supply it would not seem like natural gas will be able to exhibit consistently strong upward action in the coming week's action. ---------------------------------------------------------------------- lunedì 05 maggio 2003 -- THE HIGHTOWER REPORT MORNING STOCK COMMENT CHANGE to 4:15 AM:S&P+410 DOW +34 NIKKEI +43 FTSE Closed The stock market comes into the week in a decent position, as the gains last week gave the weekend talking heads a reason to be optimistic. We suspect that the stock market will continue to claw higher, despite the fact that the US economy is throwing off signs of stagnant momentum. The fact that Hong Kong is suggesting that the pace of new SARS cases is slowing is positive, but some traders think that SARS hasn't been a major issue holding back stock prices. With the FOMC meeting Tuesday, we expect the Fed to suggest that the US recovery is uneven but that geopolitical headwinds are in the process of lifting. We also expect the Fed to suggest that the negative effects of the war in Iraq are already lifting but we suspect the Fed will acknowledge that it could take a while before consumers are ready to throw money around. We also have to think that the trade will be keeping an eye on the Dollar, which made fresh four year lows last week and will be a source of concern if more new lows are forged this week. We continue to see stock prices rising at least until the January highs are tested and perhaps until the December 2002 highs are encountered. In the end, one has to assume that things are getting better and that stock prices should rise. In fact, in the near term one shouldn't be so concerned about how strong the recovery will eventually be, or how high stocks will eventually run, because it is our opinion that investors are best served by buying this market before it factors in most of the improving near term outlook. DOW: The next upside target in the June Dow comes in up at 8832, while near term support should be garnered off the April consolidation highs of 8502. In fact, some traders think that the 8600 level should really become the base from which prices will trade "above" for the coming months. Considering that the Dow was net short in the fund and small spec COT report, as of last Tuesday, one might suggest that this market is a long way from becoming technically overbought! The biggest question we have is will the market be able to muster enough momentum to drive prices consistently higher? S&P 500: The June S&P looks like it might make a run at the January highs (933.50) in the action today. Like the Dow futures, the S&P futures were recently net short in the small spec and fund COT position report and that should leave the market with plenty of fuel to rally. Thin chart resistance is seen at 938.40 but the bias has to be considered higher. Buy breaks to 927.40 in the June S&P, risking the position to 922. ---------------------------------------------------------------------- lunedì 05 maggio 2003 -- THE HIGHTOWER REPORT MORNING METALS COMMENT GOLD: The net spec long position in gold was hardly changed from the prior weeks reading, but with the gains since the report was taken, we have to peg the spec long coming into this week at 62,000 contracts, which is long but not without additional buying capacity. The SARS issue seems to be in a lull, with reports again suggesting that the pace of new cases in Hong Kong might be slowing. With the Bank holiday in London today, the US session is left to guess at the opening, with the Asian trade showing minimally higher action. In order to stay positive the June gold will have to hold above $334 on a close basis but fresh longs in from current levels might have to risk all the way down to $327 just to ride out near term fluctuations. The US Dollar showed very little extension in the bounce off the downside breakout last week and therefore the Dollar will continue to generally support gold prices. In fact, a trade back below 96.66 in the June Dollar Index might be cause for gold to attempt another upside pulse. Considering the action last week, we would expect gold to continue the upside tilt, especially if the driving force behind gold is a long-term investment interest, instead of the typical short-term flight to quality interest. SILVER: The net spec long in silver is about 3,000 contracts above the prior weeks reading but silver prices are almost 20 cents an ounce higher than when the COT report was measured. Therefore, silver might have a net spec long position of 40,000 to 45,000 contracts, which is again slightly overbought but not "bought-out". We get the sense that the market is capable of holding above $4.70 and might be capable of clawing its way up to the January consolidation pattern of $4.80 to $5.00. The silver market still needs solid leadership from gold to continue forging upside gains. PLATINUM: The platinum market appears to be consolidating above last weeks lows but unless the stock market can provide consistently positive leadership, we doubt that the downside run is complete. We get the sense that the $585 level is an extremely critical support level but we do think that the last 3 months action suggests that some change in supply patterns have been seen from Russia. In other words, for platinum to have declined so sharply when it appears that the world is getting beyond the geopolitical cloud, strongly suggests that platinum is no longer feeding off the tight supply/strong demand environment. COPPER: From the headlines it would seem that SARS might be slowing its spread in Hong Kong but the news on the rest of China is still unknown. Therefore, the copper market is still on the technical and fundamental ropes. With the funds short nearly 12,000 contracts and the market a full 100 points below the level where the COT report was measured, it's a safe bet to think that the net fund short is approaching 20,000 contracts. We have to think that the favorable stock market action Friday, partially offsets the concern generated by the monthly payroll report Friday morning. Considering the charts, it would not be positive for the July contract to trade back below 71.40 as that could quickly spark a small spec long liquidation washout to 71.05. Chinese disease fears and the pace of the US recovery are the primary limitation on copper prices. Those that want to be long should be long through calls options or covered futures positions. ---------------------------------------------------------------------- lunedì 05 maggio 2003 -- THE HIGHTOWER REPORT MORNING FOREIGN EXCHANGE COMMENT DOLLAR: About the best thing that can be said of the Dollar is that it is oversold. It would appear that the Dollar might try to bounce today but that could be because of the holiday thinned trade in London. We have to think that the pace of the US economy is hardly an attraction for currency, unless the Fed Chairman surprises the trade with a better-than-expected outlook for the US economy. In the mean time, we still get the sense that money is making long term allocation changes in an effort to geographically diversify. In other words, the trade might not be paying much attention to the interest rate differential or the economic differential. In fact, until there is some distinction between the US and European economies, it might be difficult to determine just what is driving currency rates. In the mean time, the trend is down in the Dollar until there is cause to alter that view. Since the Dollar is oversold it would not be surprising to see the Dollar bounce to 97.32 but a close above 97.45 might suggest that something has changed. EURO: Just as the Dollar is oversold, the euro is overbought. As we also mentioned in the Dollar section, we suspect that long term geographical diversification will continue to benefit the Euro but until one economy or the other shows itself and the Euro continues to rise in the face of that news, we are unwilling to suggest that the Euro is going to rise indefinitely. We don't see the Euro sliding back below 111.59 basis the June contract. YEN: Considering that the SARS news out of China is a little less negative this morning, it might be possible for the Yen to forge a climb toward resistance of 84.33. However, some traders are concerned that the Yen hasn't been able to get beyond the recent consolidation highs of 85.00 for the past 7 months! In other words, the fact that the Yen hasn't benefited more from the Dollar slide is quite limiting to the bull camp. SWISS: We enter the week with slightly less anxiety toward the SARS situation and perhaps slightly less macro economic anxiety and that weighs on the Swiss. Near term trend line support in the Swiss comes in all the way down at 73.15, which highlights the rather steep climb in the Swiss over the last month. Therefore, the Swiss is technically vulnerable to a moderate correction. POUND: With a holiday trade it might be unwise to voice concern over the overnight action in the Pound, but the charts look vulnerable especially if the June Pound slides back below 159.64 today. CANADIAN: The Canadian might be a little over extended in the short term and with the market just barely able to maintain prices above the last two closes of 70.22 and 70.26, we have to view that area as a critical pivot point. The path of least resistance is still up but one does have to consider the technicals. ---------------------------------------------------------------------- lunedì 05 maggio 2003 -- THE HIGHTOWER REPORT MORNING FINANCIAL COMMENT The bond market looks a little disappointed this morning, as it has yet to garner much long interest off a payroll report that should have been supportive. In our opinion, the non farm payroll reading can sometimes be volatile so we would not attach much significance to the smaller than expected job loss. On the other hand, to see a .2% increase in the unemployment rate seems to suggest that the US economy remains on the ropes. Just think how bad the payroll readings might have been over the last 6 months, if the US hadn't deployed 230,000 troops into Iraq. Some of those reserves called to active duty will be returning to the US and looking for jobs over the coming months and that means it is more critical than ever to see the US economy recover. We have to think that the SARS issue is much less supportive for bonds coming into this week than it was last week and we also don't have nearly the scheduled report slate that bonds had last week. Therefore, it could be more difficult for the market to trade higher in the sessions directly ahead. The Treasuries will have to weather a FOMC meeting but few expect any change in Fed policy, except for the potential that the minutes from the prior FOMC meeting might suggest how close the Fed was to an easing bias. We do expect the Fed to suggest Tuesday that the economy remains weak but that the geopolitical headwinds are lifting and that business investment and spending might be set to increase in the quarters ahead. We suspect that the Challenger layoff report could provide some support to bonds but if the stock market starts out higher today that could be just enough of a negative tone, that bonds and notes will slide toward last weeks lows. In fact, bonds come into the week right on critical downside chart support levels, while the June notes see trend line support a little lower than the current market at 114-09. We see a basis for deflating prices slightly, especially if the stock market can show any strength at all, early this week. ----------------------------------------------------------------------

mercoledì 30 aprile 2003 -- THE HIGHTOWER REPORT ENERGY MARKET COMMENT & STATS The energy complex made another bad trade Tuesday into the close, setting the market on a path to log a significantly large net spec position in crude oil. With the decline Tuesday, we have to think that the crude oil net spec position is approaching the 40,000 contract short level, which is overextended. In fact, we doubt that current fundamentals will allow the crude oil market to extend the net spec short above the 50,000-contract level without throwing off significant volatility in the coming weeks. The fact that US soldiers had to return fire into a crowd of protestors twice in the last 24 hours is sure to rekindle geopolitical tensions and that might in a round about way, threaten the restart date of Iraqi oil flow. In other words, if tensions inside Iraq erupt again, that could stall the repair of the oil fields. While the trade was thinking that a continued spread of the SARS disease in China could become a major negative for oil demand in Asia, it would now appear that the SARS issue is trying to clam down a little. However, until the WHO actually suggests that China is gaining a foothold on the spread of the disease, it might be wrong to assume anything. Considering the recent increases in US crude inventories the trade was probably justified in fearing the coming supply figures. However, with the break Tuesday the market might have already factored in a rise of 4 to 5 million barrels of crude in the reports this morning and a failure to see a build would certainly catch the market overly short. In the big picture, it is probably time to begin watching the refinery operating rate closely in the weekly reports, as tightness in gasoline stocks resulting from a low refinery operating rate might become the main focal point in the market over the coming two months. In the mean time we would be looking for a bottom but only if the market slides another $.75 in crude oil from the opening this morning. We would also baulk at picking a bottom if the crude stocks show a build in excess of 5 million barrels. NATURAL GAS: The natural gas market managed a sharp short covering rally Tuesday, and that comes in the face of regular energy market weakness and a bearish weather forecast, which means that natural gas still has some long support. The trade might have been short covering and it might have been paying attention to the flare up in tensions inside Iraq. A breakdown in relations between the Iraqi citizens and US forces could make it more difficult to repair the Iraqi oil fields and that would be indirectly supportive to the natural gas market. However, we seriously doubt that the natural gas market will be able to replicate the strength seen in April, unless there is a surprise recovery in crude oil prices and even more evidence that the hurricane season is going to be very active. Sell a rally to $5.50 in the June natural gas. ---------------------------------------------------------------------- mercoledì 30 aprile 2003 -- THE HIGHTOWER REPORT MORNING STOCK COMMENT CHANGE to 4:15 AM:S&P-40 DOW -6 NIKKEI +223 FTSE -10 The up trend pattern remains in place, even if the market looked a little vulnerable with its inability to hold the early gains Tuesday. As we mentioned in the bond comment this morning, the trade seems to be skeptical toward the global recovery and with European consumer sentiment weak and the BOE cutting interest rates this morning, one has to concede that the economy has yet to achieve solid footing. With US troops firing on Iraqi demonstrators for the second time in 24 hours, one has to be concerned about a political mess inside Iraq. However, we doubt that the Iraq situation is going to be fodder for the bear camp. The revelation that TYCO might have uncovered more accounting problems is an issue that undermines investment sentiment again but even that development seems to lack the capacity to unseat the general trend toward higher prices. Some traders are even pointing out the sharp decline in the Dollar, as a reason not to buy stocks, so it is clear that a number of potential negatives are restraining prices but in a classical sense, the stock market appears to be capable of "climbing the wall of worry". In other words, if everything were positive, the market would quickly become overbought. In the mean time, we do see some concern for the week ending payroll report, as that could be cause for a profit-taking binge but that report could just as easily become a benchmark for the end of the economic threat. Therefore, expect the trend to remain up but we wouldn't rule out the potential for sharp corrections against the trend. DOW: As suggested before, we think the trend is up but that corrections to trend line support of 8,307 are possible, especially later in the week following key economic reports. The Dow still hasn't made a clear upside breakout and once again the chart formation seems to suggest a broadening top. According to Dow theory, the Dow needs to confirm the new highs for the move posted in the S&P and Nasdaq in order to reconfirm the bull trend. Maybe dividend tax cut talk from House testimony today will provide the Dow an impetus to finally breakout up. In our view, if the stock market can't rally today and Thursday, the risk to the long camp will rise significantly into the Friday numbers. S&P: Trend line support in the June S&P comes in at 902.30 today and the new high for the move yesterday did manage to put the bears off balance. In fact, the new high yesterday, could be enough to mitigate coming corrections. We would avoid paying up for fresh longs, as a correction to 905.60 is very likely. In fact, fresh longs in the June S&P might have to risk positions to at least 898.60. Resistance in the June S&P is 924.90 today. ---------------------------------------------------------------------- mercoledì 30 aprile 2003 -- THE HIGHTOWER REPORT MORNING METALS COMMENT METALS:4/30 OVERNIGHT CHANGE to 4:15 AM:GLD+2.80 ,SLV+5.5 ,PLAT+3.40 +20, CP London Gold Fix $336.00 +$3.40 LME Copper Warehouse stks 769,825 ton -1,150 tons Comex Gold stocks 2.460 +79,927 oz COMEX Silver stks 108.1 ml oz Unchanged OVERNIGHT: Higher Asian gold price action despite the stronger Nikkei action. GOLD: The gold market posted a moderately impressive overnight rally, especially with the Nikkei up over 200 points and the SARS issue not really dominating the headlines. We do note that the Dollar reversed its attempt to rally yesterday and that suggests to some gold bulls that more downside is ahead in the Dollar. In fact, overnight the Dollar forged a new contract low move (4 year low) and that is more than likely the primary driving force behind the gold rise. Some buyers might also be buying gold because of the 2nd incident of US troops firing on Iraqi demonstrators, as that could cause a firestorm of political debate and serve to put even more pressure on the Dollar. Given the setup it is possible that June gold tries to mount an upside breakout above near term resistance of $336.8. Forced into the market we would have to be a buyer but chasing this market just seems to be fraught with risk. June gold has taken out long term down trend channel resistance line, but must hold above $332.4 in order to keep the technicals positive. SILVER: The silver has responded to the bullish overnight action in the gold market with a rise of 8 1/2 cents off the overnight low. Until the July silver encounters resistance of $4.68 it should be able to rise. A key trend line is violated on a recovery above $464.9 today. We suspect that silver will continue to get support from gold action and from hopes that physical demand is also set to improve. We are not nearly as skeptical of silver as we are of gold, as silver could easily forge a rally to the late February high of $4.755. A surprise rate cut overnight by the BOE might be seen as a slight support to both gold and silver. PLATINUM: The platinum market continues to adjust prices after reaching some rather historic pricing in early March. We continue to see tight supply but the market is apparently downgrading jewelry demand for platinum. It might be possible to see July platinum slide all the way down to the December consolidation lows below $580 given the fundamental setup. ---------------------------------------------------------------------- mercoledì 30 aprile 2003 -- THE HIGHTOWER REPORT MORNING FOREIGN EXCHANGE COMMENT FOREX:4/30 OVERNIGHT CHANGE to 4:15 AM:$ -39 ,YEN+28 ,SF+10 ,CA+13 EU+56 DOLLAR: A new low for the move and a 4 year low makes it hard to call for anything except more losses in the Dollar. Even after US consumer confidence numbers posted the second largest monthly gain ever, the Dollar is weak. Even with Euro zone confidence numbers coming in partially soft the Dollar was unable to turn off the selling. In other words, there is no long interest in the Dollar to speak of. Even the situation in Iraq is contributing to the slide in the Dollar, as US troops fired back at protestors for the second time in 24 hours. One would have to target 96.65 in the June Dollar Index and possibly levels below 95.00 if the week ending payroll report confirms ongoing economic slowing. It would seem that the international trade theme for being short the Dollar, is that the US economy remains mired in recessionary type conditions. EURO: When attitudes are bullish, the market manages to put a positive spin on the numbers. This morning Euro zone consumer and industrial confidence numbers were much weaker than the US numbers posted Tuesday, but the trade instead focused on the fact that weak price readings in the report would allow the ECB to cut rates. Therefore, the market is bullish toward the Euro and it is not because of a flight to quality theme. There would not seem to be a way to target how high the Euro could run because there is no history for the market to act on. YEN: The Yen is playing catch up following the holiday Tuesday and with the Nikkei gaining 223 points overnight that should give the Yen upside breakout some staying power. Near term targeting in the Yen becomes 84.12. However, the Yen is being held back by Japanese numbers, which showed a decline in housing starts and a sharp decline in construction orders. Therefore, we would not chase the Yen with buy orders. SWISS: The gains in the Swiss don't look to be as impressive as the Euro, with the chance for a top seen in the coming sessions. In fact we see ultra strong resistance in the Swiss at 74.29. POUND: A quasi-triple top is seen in the Pound around 159.34 and therefore it will be key to see the Pound hold above that level into the close today. The fact that the BOE confirmed its concern over its economy, with a surprise rate cut is apparently not going to discourage some buying in the currency. Minor gains ahead, as the fear off the economy is a countervailing force for the bull camp. CANADIAN: With the US Dollar dropping to a 4 year low and seeing no end in the slide, the Canadian sees a direct benefit. With the SARS issue possibly going away and the Canadian breaking out to the upside, the up trend is resumed. In order to get an upside technical target for the Canadian one has to use the monthly charts. Next resistance zone basis the monthly chart comes in up at 69.92 or another 80 points higher. ---------------------------------------------------------------------- mercoledì 30 aprile 2003 -- THE HIGHTOWER REPORT MORNING FINANCIAL COMMENT FINANCIALS:4/30 OVERNIGHT CHANGE to 4:15 AM :BONDS -3 We really have to question the Treasury markets ability to hold together in the face of the second largest jump ever in consumer confidence, the sharp rise in employment costs and against the recent strength in equity prices. However, it would seem that some entities remain concerned about the pace of the global recovery as the BOE surprised the trade overnight with a rate cut. Another issue that is quite puzzling is how the US Treasuries are staying in favor, with the Dollar falling so far out of favor. In fact, if one looks at the currency adjusted cost of Treasuries and the outlook for the Dollar, we are surprised that any foreign accounts are buyers. Maybe the trade is simply holding the view that the US economy is faltering and that the consumer confidence readings weresimply subjective numbers that will quickly reverse in May. Overnight the ECB preliminary April consumer confidence numbers improved slightly but remained in negative territory. ECB industrial confidence numbers actually declined and also remained in negative territory. Therefore, there is certainly evidence to counter the recovery view and until the employment situation confirms growth and recovery, the bond and note bulls seem to be able to hold prices together. It should also be noted that Chinese and Asian economic activity is thought to be taking a significant hit off the SARS disease and that might be feeding some buying into US Treasuries. We still think that traders should be put buyers on any return to this week's highs but at this point, we are uncomfortable in suggesting a sell of futures, because the tendency to see shocking numbers from the monthly payroll report due out on Friday. Sometimes it can take up to two full sessions beyond the monthly payroll report to get prices to settle down. Therefore, we are content to hold long puts for the Friday report and will consider selling into a rally in bonds and notes after we have seen the actual payroll figures. If you get long puts, you don't have to worry about missing a prime short futures play! ----------------------------------------------------------------------

martedì 29 aprile 2003 -- THE HIGHTOWER REPORT ENERGY MARKET COMMENT & STATS ENERGY:4/29 OVERNIGHT CHG to 4:15 AM :CRUDE -41 ,HEAT-14 ,UNGA-67 The energy complex managed to recover some of the early losses Monday, partially because of a strong bounce in the equity market and ideas that the SARS virus might be coming under control. However, we suspect that the energy complex will be unable to mount a significant rally, as the trade is already anticipating another moderate increase in crude stocks in the Wednesday reports. With a 3 to 4 million barrel build expected, on the tail of the massive build last week, it should be easy for the bears to maintain control. The trade tried to suggest that recent price declines will hinder the return of Iraqi oil, but considering that there will be almost no profit motive behind the initial restart, we find it hard to believe that $25 crude is too cheap for oil production to return to Iraq. The trade also appeared to settle on a net decrease of production from the last OPEC meeting of 600,000 to 800,000 barrels per day. In other words, the 1.8 to 2 million barrel per day initial production cut, was apparently modified to a simple increase in the production ceiling and that new ceiling supposedly reduces OPEC production by roughly 600,000 to 800,000 barrels per day. Apparently Venezuelan gasoline export capacity remains unchanged, despite the fire reported over the weekend and that is a negative to the energy market. Supposedly Venezuela was going ahead with a series of shipments into the end of April that will ultimately move about 2.1 million barrels of RFG and a number of shipments that add up to 2.1 million barrels of conventional gas and that should at least take the edge off the gasoline tightness story. Supposedly some Venezuelan RFG gas has failed to meet specifications and therefore was blended with regular gas and that could hint at an ongoing problem with the restart of full gasoline shipments to the US from Venezuela. As we suggested yesterday, the crude oil market could be building an unusual net short spec position and with another decline of $1.00, we suspect that crude will be net spec short a whopping 50,000 contracts. Considering the overnight gap down in the June crude overnight action we suspect that the next down side target is $24.81. NATURAL GAS: Warming seasonal temps and excessive weakness in the regular energy complex should continue to weigh on natural gas prices. We also have to think that the small spec long position is under pressure, considering its record level around the highs last week. Near term technical support in June natural gas is seen at $5.11 but an even number target of $5.00 would not be a difficult downside objective, considering the breadth of bearish fundamentals. Traders that took our suggestions over the last two weeks to buy June and July Natural gas puts should wait for a retest of $5.10 in the June before deciding to take profits. ---------------------------------------------------------------------- martedì 29 aprile 2003 -- THE HIGHTOWER REPORT MORNING STOCK COMMENT CHANGE to 4:15 AM:S&P+290 DOW +27 NIKKEI CLOSED FTSE +21 With the SARS issue apparently coming under some control Monday, investors felt confident enough to revive the recent bull track. In a surprise development even McDonalds managed to provide some bullish fodder and McDonald performance has been one of the major negatives for the market over the last two years! In other words, a number of negatives dominating sentiment for the past two years continue to be removed and that should give investors confidence. Speaking of confidence, one should note that both the Conference Board and the University of Michigan Confidence numbers have shown, or will soon show, massive improvement in consumer confidence and that should lead to improving investor confidence. Certainly, the Wall Street settlements were a slight negative to stock prices but if the SARS issue can be contained in China and the stock market can get by the coming unemployment report (due out Friday) we could see this weeks highs become long term support. Unfortunately for the bull camp, the unemployment readings can be the last to improve and with the effects of the war hurting business and consumer spending at the beginning of April and SARS dampening sentiment at the end of the month, we really don't expect an improvement in the payroll readings until the May figures are released in June. In the mean time, the path of least resistance is in stock prices with moderately aggressive corrections expected on the way to a higher trading range. DOW: In order to turn a number of technical systems bullish the June Dow needs to climb above 8506 today and 8509 on Wednesday. We have to think that the improved outlook from McDonalds means that more Dow stocks are set to post good earnings, especially in the coming quarters. Since it is the job of the market to anticipate future conditions, the Dow should rise to a new higher trading range up around 8562 to 8832. Buy a correction to 8409 and risk the trade to 8280. S&P: Another breakout is seen with a trade above 923.70 today. However, the biggest barrier to higher stock prices might be muted participation. In fact, unless the June S&P falls back below a critical support line of 898.60, we will assume the trend is up. Toward the end of the week, we would consider taking profits but only if the market clearly takes out last week's highs in the coming sessions. Until the June contract regains 935 it hasn't even managed to climb to the first retracement level on the early 2002 high to the 2002 move! ---------------------------------------------------------------------- martedì 29 aprile 2003 -- THE HIGHTOWER REPORT MORNING METALS COMMENT METALS:4/29 OVERNIGHT CHANGE to 4:15 AM:GLD-1.30 ,SLV-0.5,PLAT-14.20, CP +20 London Gold Fix $332.60 -$1.10 LME Copper Warehouse stks 770,975 ton -4,025 tons Comex Gold stocks 2.380 Unchanged COMEX Silver stks 108.1 ml oz Unchanged OVERNIGHT:A Japanese holiday muted action. Gold was slightly weaker in Australia GOLD: We suspect that the Dollar will remain weak and that combined with concerns for the SARS issue in China will provide a slight support to gold. Barrick Mines reported a slight decline in gold production in the latest quarter with a 1.26 million ounce tally following a prior output of 1.37 million ounces. It should also be noted that Harmony mines also showed a decline in 3rd quarter 2002 profits and that also hints at lower production. We serious doubt that supply is set to get tight enough to drive prices up, unless of course physical and investment demand rise along with a growing economy. After flirting with a breakout above a critical moving average, the gold market seems to have lost positive momentum and may have to slide to $330 before attempting to trade through recent consolidation resistance up around $335.6. It would appear that the SARS issue is coming under control and since we really didn't see the correlation between the disease and higher gold prices, it might benefit gold to get beyond the SARS threat. In other words, the gold market is best served by conditions that foster improved physical demand. SILVER: With the equity market sharply higher Monday, we would have expected to see silver rise but instead it sagged. Apparently silver was garnering some flight to quality buying interest off the SARS issue and now that the disease appears to be coming under control, it would seem that some longs in silver have decided to move to the sidelines. However like gold, seeing the end of SARS is really in the best interest of the bull camp in silver. However, a critical moving average would be violated on a decline below $4.526 but we think that July silver will have the capacity to respect initial support around $4.55. In order to get silver into a bull trend, we need to see consistently higher equity prices. PLATINUM: A major probe down was partially rejected Monday but in order to turn off the bear trend the July contract must close above $598 today. In fact in order to spark a short covering rally the July platinum contract might first have to mount a climb back above $608.5. Volume and open interest figures hardly show enough current interest to start a major upward thrust. ---------------------------------------------------------------------- martedì 29 aprile 2003 -- THE HIGHTOWER REPORT MORNING FOREIGN EXCHANGE COMMENT FOREX:4/29 OVERNIGHT CHANGE to 4:15 AM:$ -5 ,YEN+29 ,SF-6 ,CA+1 EU-1 DOLLAR: Some might see the favorable equity market action, as a reason for the Dollar to bottom and that is certainly possible. With the Euro zone recently posting some disappointing survey figures and the US countering with a very impressive set of confidence readings, the bear camp in the Dollar has to be somewhat concerned. However, the downtrend in the Dollar is not a weak trend and it could really take some convincing to alter the sentiment toward the Dollar. In other words, for the Dollar to actually mount a climb all the way back to the March and April consolidation highs, we will have to see a shocking headline type improvement in US payrolls. Since the SARS issue seemed to be a negative to the Dollar, the containment of that disease could prompt some short covering. In fact, a short covering move to 100.00 in the June Dollar would not be that surprising. EURO: A critical pivot point was violated temporarily in the early morning action at 109.34 and long-term moving averages don't turn negative until a trade below 107.89. However, the macro economic condition in the Euro zone favors some weakness or profit taking in the currency. However, we doubt that the trend is changed but we do suspect some profit taking and a decline to 108.90. It should also be noted that Euro zone money supply figures contracted sharply and that might be the result of poor management from the ECB. In other words, the Euro is vulnerable and the economy might have to have another rate cut. YEN: Critical support is seen at 82.91 but we have to think that a slight abatement in the SARS threat is a benefit to the Yen. In fact, it appeared that the Yen fell from above 84.00 simply because of the proximity of the SARS threat and now that pricing should be put back into Yen prices. Traders should buy any dip to 83.00. SWISS: Already the Swiss is breaking out down on the charts, as the flight to quality longs look to exit. We suspect that the Swiss is set to decline to 71.90. POUND: We are not sure if the SARS issue impacted the Pound as much as other currencies and therefore it might not see much backlash from the current unwinding seen in the Swiss and the Euro. Furthermore, a favorable set of consumer confidence numbers from the UK, help to swing the pendulum into the bull camp on the Pound. Initial resistance in the June Pound is seen at 159.30. CANADIAN: What SARS took out of the Canadian, might have to be put back in. In fact, unless the improved economic look in the US is going to countervail the long interest in the Canadian, we would expect to see a new contract high very soon. The June Canadian should not fall back below critical support of 68.43. ---------------------------------------------------------------------- martedì 29 aprile 2003 -- THE HIGHTOWER REPORT MORNING FINANCIAL COMMENT FINANCIALS:4/29 OVERNIGHT CHANGE to 4:15 AM :BONDS -8 It's a little bit of a mystery why the bonds were able to hold together in the face of the equity market action Monday. Maybe the trade is thinking that the Friday payroll role numbers will provide a bullish surprise, or maybe the trade is not yet willing to accept that SARS is under control in China. Certainly, the WHO is suggesting that many places have SARS under control but there is still a substantial risk that interior China could see the disease get out of control. Furthermore, with the disease still spreading inside the world's most populous country, the chance for a new infection outside of China is still pretty high considering that people are still traveling to and from China. If the SARS issue were not playing out in the headlines, the regularly scheduled US economic information would certainly have been enough to drive bonds down aggressively. In fact, the combination of improving sentiment figures and the impressive string of good corporate earnings reports leaves the bond market extremely vulnerable to a washout. In other words, if the bonds fall by 1 to 2 points at some time in the coming 5 sessions don't be surprised because the market is "penting-up" bearish developments. With energy prices sliding, corporate earnings improving and consumer sentiment rising it would seem that bonds are a major sell. However, some shorts might be scared off by the Friday morning payroll report. Unfortunately for the bear camp in bonds, the coming payroll report will more than likely show some residual anxiety off the war and we also think the second half of April was buffeted by the SARS issue. Therefore, we would not be surprised to see the April payrolls decline enough to give the bond and note bulls some temporary hope. In conclusion, the Friday report is the report that long-term top players will have to weather in order to get to the real payoff down the road. Traders should become short the June bonds at 113-07 to 113-11, while note players should sell the notes at 114-20 to 114-24 looking to hold through the Friday numbers. Those that are concerned about the risk of a short play should sell the futures early and wait for a minor decline today to buy weak call protection in the June Bond and note options. The June options have 24 days until expiration and we would only buy second strike out calls in order to reduce costs. ----------------------------------------------------------------------