Message-ID: <31779088.1075855607345.JavaMail.evans@thyme> Date: Fri, 11 May 2001 14:51:00 -0700 (PDT) From: evening@ino.com To: mike.grigsby@enron.com Subject: Trader, Friday CRB -0.98 DOW -89.13 NAS -21.43 S&P -9.51 USD +0.51 Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "INO.com" <evening@ino.com> X-To: "Trader And INO User" <mike.grigsby@enron.com> X-cc: X-bcc: X-Folder: \Michael_Grigsby_Jun2001\Notes Folders\Notes inbox X-Origin: Grigsby-M X-FileName: mgrigsb.nsf F R I D A Y E X T R E M E M A R K E T S A complimentary service from INO.com ( http://www.ino.com/ ) Friday: The CRB Index is falling 0.98 points to 213.90. The US Dollar Index moved higher by 0.51 points to 116.88. The Dow Industrials trended lower by 89.13 points, at 10821.31, while the S&P 500 trended lower by 9.51 points, last seen at 1245.67. 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Both markets are likely to remain range bound for the time being. It will take closes above last week's highs or below the late-April reaction lows to clear up near-term direction in these markets. The Dow closed lower on Friday and below this spring's uptrend line due to light profit taking ahead of the weekend and next week's FOMC meeting. The latest economic data suggests that any further cuts in interest rates by the Fed next week might be their last for the time being. The Dow has become extremely overbought and overdue for a correction. Closes below last week's low crossing at 10,673.20 would signal that a larger-degree decline might be unfolding this spring. INTEREST RATES June bonds plunged to new lows for the year following the release of the University of Michigan's May consumer sentiment that came in at 92.6 verses 88.4 in April. Additional pressure came from April's retail sales data, which came in above pre- report estimates. Odds of a 50-basis-point cut in interest rates next Tuesday are now estimated at 73% verses 83% last Friday. Today's breakout below the 50% retracement level of the 2000-01 rally crossing at 99- 30 opened the door for a likely test of the 62% retracement level crossing at 98-07 later this month. Short-term momentum indicators have turned bearish signaling that additional weakness is possible. The CRB INDEX closed out the week near session lows as it extended its decline off last Friday's high. This week's breakout below April's uptrend line along with a downturn by a number of momentum indicators confirmed that last week's high marked a double top while opening the door for sideways to lower prices for the last half of May. Weakness in grains, meats, precious metals, some foods and energies weighed on the CRB today. ENERGY MARKETS closed mostly lower on Friday due to profit taking ahead of the weekend. Today's sell off in the product markets was triggered by rumors that President Bush will take early action to provide relief from higher energy prices. Additional pressure came from talk that other states will follow California and attempt to opt out of the reformulated gasoline program. June crude oil posted a quiet inside day with a slightly higher close on Friday as it consolidated some of this week's gains. However, June crude remains range bound leaving the door open for two-sided action. Momentum indicators are neutral to bullish signaling that sideways to higher prices near-term are possible. However, it will take closes above 30.13 or below 26.75 to clear up near-term direction in the market. June heating oil closed lower on Friday due to profit taking following Thursday's test of minor resistance crossing at 77.80. Closes above this resistance level or below 73.10 are needed to confirm a breakout of a three-week old trading range. Momentum indicators are neutral to bullish hinting that sideways to higher prices near-term are possible. June unleaded gas closed sharply lower on Friday following rumors that President Bush will take action to provide relief from high gasoline prices. Friday's setback led to a test of this spring's uptrend line crossing near 105.10. Multiple closes below the uptrend line and last week's low crossing at 101.90 would confirm a top and trendline breakout. Momentum indicators have been showing bearish divergence, which is often a precursor to a top and trend change. June Henry Hub natural gas posted a downside reversal on Friday thereby ending Thursday's short covering bounce. Additional weakness on Monday is needed to confirm today's bearish reversal pattern as the door remains open for a test of the 75% retracement level of the 1999/2000 rally crossing at 3.625 later this spring. The rising ADX signals that additional weakness during May is possible. CURRENCIES The June Dollar closed higher on Friday thereby confirming Thursday's key reversal up. Momentum indicators are bullish signaling that additional gains are possible next week. If this month's rally continues, this spring's double top crossing at 117.89 is June's next target. The June Swiss Franc and D-mark closed out the week at or near session lows against the Dollar following the release of the latest U.S. economic data. Both markets are poised to test their April lows, which mark key support levels. Closes below these lows would confirm a downside breakout of this spring's trading range while renewing the larger-degree downtrends. Momentum indicators remain bearish signaling that additional weakness near-term appears likely. The June Canadian Dollar closed sharply lower on Friday after forming a small bear flag earlier in the week. Today's resumption of the decline off last Friday's high sets the stage for additional weakness during the last half of May with April's conservative uptrend line crossing near .6414 being the next likely downside target. Momentum indicators remain bearish signaling that additional weakness near-term is possible. The June Japanese Yen closed steady on Friday in two- sided trading as it consolidated some of this week's losses. Session lows fell just short of testing April's uptrend line, which crosses near .8166. Multiple closes below this support level would open the door for sideways to lower prices during the last half of May. Momentum indicators have turned bearish and warn traders that additional weakness near-term is possible. PRECIOUS METALS June gold closed lower on Friday as it extended Thursday's setback due to light profit taking ahead of the weekend. Nevertheless, this week's upside breakout of the 2000-01 downtrend line has confirmed that a major bottom and trend change has taken place. Momentum indicators remain bullish signaling that sideways to higher prices near-term are possible. If this spring's rally continues, March's high crossing at 276.20 is June's next upside objective. July silver posted an inside day with a lower close as it consolidates above the lower boundary of this spring's trading range crossing at 4.31. Closes below 4.31 are needed to confirm a trading range breakout and trend change. However, momentum indicators are oversold warning bears to use caution as a short-term bottom might be in or near. Closes above this week's high at 4.425 are needed before a low can be confirmed. July copper posted an inside day with a higher close due to light short covering following Thursday's test of April's low crossing at 75.60. Multiple closes below this support level are needed to confirm a breakout and resumption of this spring's decline. If a breakout is confirmed, weekly support crossing at 74.10 is July's next target. Momentum indicators are bearish signaling that additional weakness near-term is possible. GRAINS July corn closed out the week on a low note and near session lows due to spillover selling following Thursday's bearish supply/demand report. This week's breakout below key weekly support crossing at 2.02 has both renewed this year's decline and set the stage for the next level of weekly support crossing at 1.91 1/2 later this month. Today's losses were limited, as traders were cautious ahead of Monday's planting progress report and this afternoon's extended weather forecasts. Planting delays continue plague farmers in the western Corn Belt while dry parts of the eastern Corn Belt received some rains during the week. I would not be surprised to see a short covering bounce on Monday however, the bearish tone that has engulfed the corn market will continue to limit upside potential near-term. July wheat closed higher on Friday as the smaller- than-expected U.S. winter wheat crop and all-wheat production forecasts from Thursday's supply/demand report continues to underpin the market. Gains were limited due to weakness in the corn market. Traders will be closely watching Monday's planting progress and crop conditions reports for near-term direction. Closes above broken trendline support crossing near 2.72 would temper the bearish outlook in July wheat while increasing the odds that this week's lows marked a double bottom. SOYBEAN COMPLEX July soybeans closed fractionally higher on Friday due to light short covering ahead of the weekend. However, Thursday's bearish supply/demand report and corn planting delays in the western Corn Belt continue to limit upside potential. Momentum indicators have become overbought and are turning neutral to bearish signaling that May's correction in time might have come to an end. I am looking for sideways to lower soybean prices during the last half of May with April's low being a possible target. July soybean meal posted an inside day with a higher close on Friday as it consolidated some of Thursday's losses. However, upside potential remains limited in the face of bearish soybean fundamentals. Momentum indicators have become overbought and are turning neutral to bearish warning traders to use caution as this spring's corrective rebound might have come to an end. Closes below this week's low would likely trigger additional long-liquidation next week. LIVESTOCK June hogs closed steady on Friday, as gains were limited due to sharp losses in bellies. Commercial buying prompted by strong cash bids that were up $0.50 to $1.00 higher on the day supported prices. Sluggish hog movement and inadequate packer inventories continue to support the cash market, which has underpinned the late-week rally. Technically, June hogs continue to rebound off the 2000-01 uptrend line, which is to be expected following April's sharp decline. Until this support level is broken, this spring's setback is nothing more than a correction within a bull market. June cattle closed lower on Friday as it posted a downside reversal. Session highs spiked above broken support crossing at 70.52. Additional weakness on Monday is needed to confirm today's bearish reversal pattern. If this spring's decline resumes, last September's low at 69.72 then weekly support crossing at 69.25 are potential targets. Both weekly and daily momentum indicators are bearish but nearing their respective oversold zones hinting that an important low might be near. FOOD & FIBER July coffee posted a downside reversal on Friday erasing Thursday's gains. Momentum indicators have become very overbought warning traders to use caution as a short-term top might be in or near. July's inability to fill March's gap at 70.25 underscores the weak tone of the market. Closes below Thursday's low at 66.25 would confirm that this spring's short covering bounce has likely come to an end. July cocoa posted a huge key reversal down on Friday due to profit taking that erased much of this week's gains. Additional weakness on Monday is needed to confirm today's bearish reversal pattern. From a broader perspective, July cocoa needs to close above 1103 or below 955 to confirm a breakout of this spring's trading range. July sugar closed modestly higher on Friday as it continues to form a small symmetrical triangle. A breakout in either direction of this consolidation formation will point the direction of the next trending move. If this spring's rally resumes, January's high at 941 is July's next target. Closes below this week's low at 890 would increase the odds that a short-term top has likely been posted. July cotton posted a key reversal up on Friday due to short covering ahead of the weekend. Nevertheless, Friday's high did nothing more than test broken support crossing at 45.50. Multiple closes above this broken support level are needed to temper the bearish outlook in the market. If this spring's decline continues, psychological support crossing at 40 cents is July's next downside target later this month. Daily Extreme Commentary is brought to you by GLOBALcharts, INO.com's end-of-day charting software for Futures, Futures Options and Optionable Stocks. http://www.globalcharts.com Search the INO Store - http://store.ino.com/ _____________________________________________________________________ T O P N E W S _____________________________________________________________________ STOCKS Japan Stocks: Nikkei climbs 0.19% for first gain in 4 days http://news.ino.com/summary/?id=25464 Add1:US Equities Review: Down on perception next rate cut may be last http://news.ino.com/summary/?id=25471 UK Stocks Review: FTSE lower in uninspiring end to the week http://news.ino.com/summary/?id=25470 FOREX US FX Review: Euro extends losses on strong US data, ECB rate cut http://news.ino.com/summary/?id=25466 Asia FX Review: Yen in tight range amid lack of stock price moves http://news.ino.com/summary/?id=25463 Europe FX Review: Euro extends recent losses against dollar http://news.ino.com/summary/?id=25465 CREDIT US Credit Review: Plummets on reduced rate cut expectations http://news.ino.com/summary/?id=25461 Europe Credit Review: Curve steepens sharply on surprise ECB cut http://news.ino.com/summary/?id=25467 Japan Credit Review: June up on strong medium-term cash bonds http://news.ino.com/summary/?id=25469 COMMODITIES US Futures Summary: Gasoline traders worry about federal action http://news.ino.com/summary/?id=25468 EXCHANGES SGX Announces 3rd Quarter Results http://news.ino.com/press/?release=24444 NYMEX To Amend Post-Close Trading Rules http://news.ino.com/press/?release=24443 NYBOT Changes Index Trading Hours http://news.ino.com/press/?release=24442 Record April For IPE http://news.ino.com/press/?release=24441 HKEx Sign MOU With The Stock Exchange Of Thailand http://news.ino.com/press/?release=24440 CBOT/MIDAM Memorial Day Holiday Trading Schedule http://news.ino.com/press/?release=24439 Last Trading Day Changed For Kansas Wheat Options http://news.ino.com/press/?release=24438 Gerstenschlager Takes Over As Chairman Of Germany's EEX http://news.ino.com/press/?release=24437 ____________________________________________________________________________ E X T R E M E F U T U R E S ____________________________________________________________________________ Updated every 10 minutes around the clock. More at http://quotes.ino.com/analysis/extremes/futures/ WINNERS ZM1 U.S. Treasury 6% Bond Jun 2001 103 184/256 4 17/32 +4.57 LBU1 Random Length Lumber Sep 2001 303.70 9.70 +3.30 SMK1 Soybean Meal May 2001 163.6 4.7 +2.96 SIN3 Silver Jul 2003 4.604 0.088 +1.91 YM1 U.S. Treasury 6% 10yr Note Jun 2001 104 184/256 1 3/4 +1.70 XEK1 Soybean Meal May 2001 161.3 2.4 +1.51 XSK1 Soybeans May 2001 450 5 1/2 +1.23 XWN1 Wheat Jul 2001 271 1/4 3 1/4 +1.21 KWN1 Wheat Jul 2001 331 3 3/4 +1.15 WN1 Wheat Jul 2001 271 1/4 2 3/4 +1.02 LOSERS PBG2 Frozen Pork Bellies Feb 2002 67.250 -2.950 -4.20 CCZ1 Cocoa Dec 2001 1014 -34 -3.24 HUN1 New York Harbor Unleaded Gasoline Jul 20 0.9719 -0.0291 -2.90 LHJ2 Lean Hogs Apr 2002 51.175 -1.250 -2.39 PNZ1 Propane Dec 2001 0.5350 -0.0125 -2.30 XHV1 Lean Hogs Oct 2001 52.57 -1.20 -2.25 BDU1 Oriented Strand Board Sep 2001 225.00 -5.00 -2.17 DBK1 Butter May 2001 185.000 -4.000 -2.12 USZ1 U.S. Treasury Bond Dec 2001 97 30/32 -1 27/32 -1.85 RRN1 Rough Rice Jul 2001 5.610 -0.100 -1.75 ____________________________________________________________________________ E X T R E M E S T O C K S ____________________________________________________________________________ Updated every 10 minutes around the clock. More at http://quotes.ino.com/analysis/extremes/stocks/ WINNERS RSTA ROSETTA INPHARMATICS 17.34 7.41 +74.77 UCOR UROCOR INC 15.39 3.18 +26.28 DYAX Dyax Corp 9.90 2.00 +25.38 PENX PENFORD CORP 13.35 2.42 +22.62 GISX GLOBAL IMAGING SYS 7.40 1.30 +21.85 PMSI PRIME MEDICAL SERVICES 6.88 1.16 +20.17 SQNM SEQUENOM INC 16.00 2.64 +19.70 NNBR NN INC 8.79 1.40 +18.92 GIII G-III APPAREL GROUP 9.35 1.43 +18.38 NATR NATURE'S SUNSHINE PROD 10.18 1.47 +16.37 LOSERS FLCG FRONTLINE CAP GRP 5.85 -2.83 -32.57 MAXC MAXCO INC 7.50 -1.43 -19.07 WJCI WJ COMMUNICATIONS 8.15 -1.70 -17.91 CWON CHOICE ONE COMMUNIC 6.59 -1.43 -17.83 PGTV PEGASUS COMMUNICATIONS'A' 21.90 -4.23 -16.22 RBAK REDBACK NETWORKS INC 16.40 -3.10 -15.90 ARBA ARIBA INC 6.90 -1.24 -15.21 TWDE DECS TRUST V 2002 18.00 -3.16 -14.87 QLTI QLT INC 20.25 -3.51 -14.74 INGN Introgen Therapeutics 6.13 -1.05 -14.66 FREE MANAGED FUTURES & IRA RETIREMENT KIT http://www.ino.com/specials/icm/ _____________________________________________________________________ T H A N K Y O U _____________________________________________________________________ Thank you for subscribing to the Extreme Markets Daily Digest from INO.com ( http://www.ino.com/ ). 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