Message-ID: <2132031.1075845225619.JavaMail.evans@thyme> Date: Wed, 6 Jun 2001 05:28:05 -0700 (PDT) From: morning@ino.com To: alewis@ect.enron.com Subject: Andrew, Morning Market Alerts Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "INO.com" @ENRON X-To: Andrew Lewis X-cc: X-bcc: X-Folder: \Lewis, Andrew H.\Lewis, Andrew H.\Deleted Items X-Origin: LEWIS-A X-FileName: Lewis, Andrew H..pst W E D N E S D A Y M O R N I N G E X T R E M E M A R K E T S A complimentary service from INO.com ( http://www.ino.com/ ) CDCD FREE: NetFutures' exclusive eStarter Kit CD-ROM CDCD http://www.ino.com/specials/netfutures/ Andrew, KEY EVENTS TO WATCH FOR: 12:45 PM ET. Fed Governor Laurence Meyer addresses the National Association for Business Economics New York Chapter on the question "What happened to the new economy?" 6:30 PM ET. ABC/Money Magazine releases its consumer confidence polls. KEY HEADLINES: Bristol-Myers near $8 billion deal for DuPont unit, says report. Cadbury Schweppes near $600 million purchase of Orangina. BP, Exxon, Shell selected for $18 billion China pipeline bid, says report. GE may divest Honeywell jet unit on antitrust concern, says report. Japan PM Koizumi says US missile defense study is worthwhile. MIDEAST: Israel Press: Israel, US reach deal on settlement freeze. China Press: US to separate WTO talks from security issues. Mexico says it determines duties on US corn imports. Napster details tentative record label deal as court hearing looms. Search is on for US navy officer after Philippine communist rebel attack. Bank of England seen leaving interest rates at 5.25%. French budget deficit rises to $22.2 billion in April. The STOCK INDEXES & MARKETS The NASDAQ and S&P 500 were mixed overnight in thin trade as both markets are poised to consolidate some of this week's gains. Tuesday's rallies were underpinned by positive earnings outlooks in a number of technology companies along with ideas that the worst as far as the economy goes may be behind us. Momentum indicators are turning neutral to bullish signaling that sideways to higher prices during the first half of June are possible. Meanwhile, the Dow extended Monday's rally thereby signaling that the setback from May's high has ended. A higher weekly close for the Dow would increase the odds that this spring's rally is resuming. European markets were mostly higher in overnight trading as they followed US equity markets higher. The UK FTSE-100 was up 14.90 points at 5937.40 while the German DAX-30 was up 2.84 points at 6244.97 as of 11:00 BST. The Nikkei closed lower overnight after early gains faded ahead of the close. Ongoing concerns over high-technology earnings dragged the market back to just below where it had started the day. The Nikkei tested the 50% retracement level crossing at 12,995. Momentum indicators are bearish but becoming oversold hinting that a short-term bottom might be in or near. The Nikkei closed down 7.16 points to 13,174.84 overnight. INTEREST RATES September bonds were lower overnight due to light profit taking as it consolidates some of its recent gains following last week's trendline breakout. While a day or two of consolidation is possible, momentum indicators remain bullish signaling that sideways to higher prices into early-June are possible. If the rebound off last week's low continues, the 38% retracement level of this spring's decline crossing at 101-15 then the 50% retracement level crossing at 102-16 are potential targets later this month. The German bond market or Bunds were higher overnight in thin trading as there is little market moving economic news scheduled for release today. The June Bunds were last up 0.05 at 107.15. Japanese government bonds closed lower overnight as market participants took profits after Tuesday's climb to a near-record high. The lead June 10-year JGB futures closed at 140.50 yen, down 0.28, while the yield on the benchmark No. 231 June 10-year cash bond stood at 1.225%, up 0.035, as of 1510 JT. The ENERGY MARKETS were lower in overnight trading following the release of this week's API data. The report showed that crude oil supplies rose by 3.409 million barrels last week. Gasoline stocks rose by 3.161 million barrels while distillate stocks were up 4.103 million barrels. US refineries operated at 97.1% verses 95.3% last week. July crude oil was lower overnight following the latest API data, which showed an increase in stocks compared with expectations for a decline in stocks by the trade. July is trading below the 38% retracement level of this year's rally crossing at 28.26. Closes below last week's low at 27.55 could lead to a test of this year's uptrend line, which crosses near 27.10 later this month. Momentum indicators are bearish but nearing their respective oversold zones warning traders to use caution as a short-term bottom might be near. July heating oil was lower overnight due to Tuesday's bearish API inventory report, which showed a larger-than-expected increase in stocks. Overnight losses helped confirm Monday's downside reversal as the stage is set for a test of May's reaction low crossing at 74.55 later this month. Momentum indicators are bearish signaling that sideways to lower prices during the first half of June are possible. July unleaded gas was lower overnight in response to Tuesday's bearish inventory report. Overnight losses have led to a breakout below this year's uptrend line, which crosses near 90 cents. Multiple closes below the uptrend line would confirm a top and trend change has taken place. Momentum indicators remain bearish signaling that sideways to lower prices near-term are still possible. July Henry Hub natural gas was lower overnight due to spillover selling following Tuesday's key reversal down. Traders will be watching this week's AGA inventory data for near-term direction. However, it does appear as though the short covering bounce off last week's low has come to an end. CURRENCIES The September Euro was higher overnight following Tuesday's upside reversal that was triggered by rumors of central bank intervention to support the currency. A higher closes during the day session is needed to confirm Tuesday's bullish reversal pattern but closes above last week's high crossing at 85.70 are needed to temper the bearish outlook in the market. Momentum indicators are oversold and turning neutral to bullish hinting that a low may be in place. The September British Pound plunged to a new contract low overnight signaling the resumption of this year's decline. This week's trading range breakout has opened the door for a test of last fall's low on the weekly chart, which crosses at 139.52 later this month. Momentum indicators are bearish signaling lower prices during the first half of June are likely. The September Swiss Franc was slightly higher overnight as it extended Tuesday's rebound off last week's contract lows. Closes above this spring's downtrend line crossing near .5676 are needed to confirm a short-term bottom has been posted. The ADX (a trend- following indicator) is turning down signaling that a low is in or near. The September Canadian Dollar was higher overnight following Tuesday's key reversal up. Closes above May's high crossing at .6541 are needed to confirm an upside breakout of May's trading range and renew this spring's rally. Momentum indicators are bullish signaling that sideways to higher prices during the first half of June are possible. The September Japanese Yen was lower overnight thereby confirming Tuesday's key reversal down. The yen filled last week's gap at .8425 thereby increasing the odds that a short-term top has been posted. Stochastics and RSI are turning bearish following a test of their respective overbought zones warning trader's to use caution as a short-term appears to have been posted. PRECIOUS METALS August comex gold was slightly higher in overnight trading following Tuesday's upside reversal. August continues to consolidate around the 75% retracement level of the decline off May's high, which crosses at 267.20. Closes above 269.60 are needed to temper the near- term bearish outlook in August gold. If the decline continues, the reaction low crossing at 263.20 is August's next target. Stochastics and RSI are bearish but becoming oversold warning bears not to press their hand as a low may be near. July silver was higher overnight due to light short covering as it continues to rebound off Monday's low. Nevertheless, the door remains open for a test of trading range support crossing at 4.31 later this month. Multiple closes below the lower boundary of this spring's trading range crossing at 4.31 would open the door for a possible test of weekly support crossing at 4.15 later this month. Momentum indicators are bearish signaling that additional weakness near-term is possible. July copper was steady overnight. A lower close on Wednesday would bring into question whether or not this week's bounce off May's low has come to an end. Closes below Monday's low would open the door for additional weakness and could lead to a test of weekly support crossing at 74.10 later this spring. It will take closes above 77.20 to temper the near-term bearish outlook in the market. Momentum indicators are neutral to bearish signaling that sideways to lower prices into early-June appears are still possible. GRAINS July corn was lower overnight as traders have shifted their focus from declining crop conditions due to cool/wet conditions across the Midwest and instead are focusing on extended weather forecast calling for warmer/dryer conditions by early next week. Additional pressure came from weather forecast for China, which are calling for increased chances for precip over the next few days, which would help alleviate some the trades dry weather concerns. Tuesday's downside reversal sets the stage for a test of last week's gap that led to a trendline breakout. If the gap at 1.93 1/4 is filled, it would signal a likely end to the present short covering rally. A higher close on Wednesday would help set the stage for a possible of May's high crossing at 2.11 1/2 later this month. If you can remember 1993, it was not until fall that the trade finally realized that too much moisture can cut yields. We may be facing the same situation this year meaning that it could be some time before the market finally begins to build in a weather premium because of too much rain in the Midwest, which has lowed yield prospects. Early calls are for July corn to open 1 cent lower this morning. July wheat was lower in overnight trading as it extended this week's decline due to forecasts calling for improving weather conditions across the plains by early next week. Additional pressure is coming from a pick up in harvest in southern Oklahoma. Yield reports are mixed but generally inline with pre-harvest expectations. The rising U.S. Dollar has contributed to sluggish export demand for U.S. wheat, which has offset lower planted acreage and expectations for a decline in ending wheat stocks. A lack of threatening weather in other wheat producing regions of the world is also weighing on wheat prices. I would not be surprised to see a higher close on Wednesday as the market consolidates some of this week's gains. However, I am bearish longer-term and see July wheat exceeding May's low and possibly testing long-term support crossing at 2.50 before the expiration of the contract. Early calls are for July wheat to open steady to 1 cent lower this morning. SOYBEAN COMPEX July soybeans were lower in overnight trading following Tuesday's poor close. Bearish weather forecasts calling for warmer/drier conditions to move into the Midwest by early next week have offset support from this week's decline in crop conditions. Closes below Monday's low crossing at 4.48 3/4 would signal that the recent trading range breakout proved to be a bull trap. Momentum indicators are still bullish signaling that sideways to higher prices near-term are possible. Early calls for July soybeans to open 1 to 1 1/4 cents lower this morning. July soybean meal was lower overnight due to spillover weakness from soybeans and bearish extended weather forecast. Overnight lows tested Tuesday's gap but did not fill it. July meal is at an important crossroads. Multiple closes above the late-May high at 168 are needed to renew this spring's rally. Closes below last week's low crossing at 159.60 would increase the odds that a short-term top has been posted. Momentum indicators are neutral to bearish warning traders to remain patient and let the market point the direction of the next trending move. Early calls are for July soybean meal to open 30 to 50-cents lower this morning. LIVESTOCK August hogs closed lower on Tuesday on ideas that meat packers will reduce slaughter thereby pressuring the cash market. Additional pressure came from ideas that August has become slightly overbought technically. However, today's mid-range close leaves the door open for sideways trading on Wednesday. If the rally resumes, April's high crossing at 65.95 is August's next target. Closes below last week's gap at 64.00 would strongly suggest that a short-term top has been posted. August cattle closed slightly lower on Tuesday as traders await direction from the cash market. The recent rally in futures appears to have priced in $76 cash bids. Momentum indicators have become very overbought warning bulls to use caution a the market might be forming a broad double top with January's high. FOOD & FIBER July coffee closed higher on Tuesday thereby confirming Monday's key reversal up. Today's rally also turned a number of oversold momentum indicators neutral to bullish thereby increasing the odds that last week's low might have marked a short-term bottom. Closes above May's downtrend line crossing near 62.10 are needed before this is confirmed. July cocoa closed higher on Tuesday due to light short covering following Monday's upside reversal. Nevertheless, July remains below broken trading range support crossing at 955. Multiple closes above this broken support level are needed to temper the near-term bearish outlook in the market. Momentum indicators are bearish but becoming oversold warning bears to use caution when pressing the short side of the market. July sugar closed slightly lower on Tuesday in narrow trading as it continues to consolidate above last week's apparent double bottom. Momentum indicators are bearish but becoming oversold hinting that additional short covering off last week's low is possible. If the decline resumes, fib support crossing at 832 then 808 are targets. July cotton posted an inside day with a slightly lower close on Tuesday. Additional weakness would increase the odds that the short covering bounce off last week's low may have run its course. It will take closes above this year's downtrend line crossing near 43.95 to confirm that a bottom and trend change has taken place. Until then, the overall downtrend remains intact. _____________________________________________________________________ TOMORROW'S MARKET PRICES TODAY _____________________________________________________________________ Armed with such information, such power, you could easily make a fortune! Do you suspect that the markets follow some pattern? That somehow there is some order and reason to market movements? Then you'll be both intrigued and thrilled at this tremendous discovery. CALL MARKET TOPS AND BOTTOMS WITH PINPOINT ACCURACY . . . It makes no difference what market, stocks, futures, anything. These techniques forecast both intraday price moves and the 2-3 day short-term price swings. If you can construct a bar chart, you can forecast market moves. "Joe is one of only a handful of truly successful traders I know. His accuracy is incredible. 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