INTEREST RATES




September T-bonds closed higher on Tuesday and are


challenging last week's high crossing at 103-31. Closes


above 103-31 would turn the short-term trend up and could


lead to a test of fib resistance crossing at 104-04, which


marks a 62% retracement level of the November-March decline.


If this resistance level is cleared, June's high crossing at


105-16 then the 75% retracement level crossing at 105-31 are


potential targets later this summer. Closes below last


week's low crossing at 102-08 would confirm a breakout below


the May-June uptrend line thereby opening the door for


additional weakness during July. Momentum indicators such as


stochastics and the RSI will need to see additional strength


before turning bullish.




The CRB INDEX




The CRB posted an inside day with a higher close on Tuesday


leaving Monday's key reversal down unconfirmed. Strength in


grains, precious metals, food, fiber and energies. Closes


above Monday's high at 212.03 are needed to renew the CRB's


rally. Support begins with April's high crossing at 208.39.


Momentum indicators are overbought and turning bearish


thereby increasing the odds that a short-term top might be


in or is near.


ENERGY MARKETS




The energy markets closed higher on Tuesday due to short


covering ahead of the release of this afternoon's API


inventory reports. Expectations for draws in crude oil


stocks provided underlying support for the rest of the


complex. However, gains were limited as Norway and Russia


promised that further production cuts are gone and that they


are no longer with OPEC.




August crude oil closed slightly higher on Tuesday but


remains below June's broken uptrend line, which signals that


last month's corrective bounce has ended. Barring a bullish


surprise in this afternoon's API inventory report, August


crude oil looks to work lower into the later part of July.


If the decline off last week's high continues, June's


reaction low crossing at 25.21 is August's next downside


target later this month. Stochastics and the RSI have turned


bearish signaling that additional weakness is possible near-


term.




August heating oil closed higher on Tuesday due to technical


short covering but remains below June's broken uptrend line.


Stochastics and the RSI have turned bearish signaling that


additional weakness is possible into the later half of July.


If the decline off last week's high continues, June's


reaction low crossing at 64.65 is August's next downside


target.




August unleaded gas closed higher on Tuesday due to


technical short covering as it consolidates some of Monday's


loss. Early weakness saw August spike below minor support


crossing at 75.30. However, a lack of additional selling


once this support level was exceeded triggered a short


covering rebound into the close. Barring a bullish inventory


report this afternoon, the door remains open for sideways to


lower prices into the last half of July. Stochastics and the


RSI have turned bearish signaling that sideways to lower


prices are possible near-term. Closes below today's low


would open the door for a possible test of the lower


boundary of this spring's trading range crossing at 77.12


later this month.




August Henry Hub natural gas posted an inside day with a


higher close on Tuesday as it consolidated some of Monday's


loss. Today's rebound allowed August to close above the 62%


retracement level of this year's rally crossing at 2.98. If


the decline continues, the 75% retracement level of this


year's rally crossing at 2.751 is a possible target later


this month. Stochastics and the RSI are bearish signaling


that lower prices are possible near-term.




CURRENCY FUTURES | REAL TIME FOREX




The September Dollar closed sharply lower for the second day


in a row on Tuesday thereby setting the stage for a likely


test of the late-June low crossing at 105.97, which


coincides with weekly support crossing at 106.01. Closes


below these lows would renew this year's decline while


opening the door for a possible test of the April 2000 low


on the weekly chart crossing at 103.85 later this summer.


Today's low-range close leaves the door open for a steady to


weaker opening of Wednesday's trading. However, I would not


be surprised to see a steady to higher close on Wednesday as


the Dollar might try to consolidate some of this week's


losses above the aforementioned support levels.




The September Euro closed higher on Tuesday as it extended


this week's rebound off last Friday's low. Today's high-


range close sets the stage for a possible test of the late-


June high crossing at 99.56 possibly on Wednesday. Closes


above 99.56 would renew this year's rally, which could lead


to a test of weekly resistance crossing at 101.04 later this


summer. Closes below the May-June uptrend line, which


coincides with the 25% retracement level of this year's


rally crossing at 96.15 would confirm a top while opening


the door for a larger-degree decline during July. The daily


ADX is renewing its bullish mode hinting that sideways to


higher prices are possible near-term.




The September Swiss Franc extended its rebound off last


Friday's low on Tuesday and is poised to test the late-June


high crossing at .6795 possibly on Wednesday. If this


summer's rally resumes, weekly resistance crossing at .6924


is the next upside target later this month. Closes below


last Friday's reaction low crossing at .6570 would increase


the odds that a short-term top might be in or is near. The


daily ADX is bullish indicating that sideways to higher


prices are still possible.




The September Canadian Dollar closed sharply higher on


Tuesday. Today's high-range close sets the stage for a


steady to firmer opening when Wednesday's trading begins.


Closes above the recent reaction high crossing at .6640


would renew this year's rally while opening the door for a


possible test of weekly resistance crossing at .6678 later


this month. This week's rally has turned a number of


momentum indicators including stochastics and the RSI


neutral to bullish once again hinting that sideways to


higher prices are possible near-term.




The September Japanese Yen closed above the previous


reaction high crossing at .8481 on Tuesday thereby renewing


this year's rally. Today's high tested the 75% retracement


level of the 2001-02 decline crossing at .8525. If this


resistance level were cleared, the door would be open for a


possible test of last September's high crossing at .8842


later this summer. The daily ADX remains in a bullish mode


signaling that sideways to higher prices are possible near-


term.




PRECIOUS METALS




August gold closed higher on Tuesday due to weakness in the


Dollar and lower equity prices. Today's close above last


week's high crossing at 316 increases the odds that a short-


term low was posted with Monday's spike below the 38%


retracement level of this year's decline crossing at 309.70.


Stochastics and the RSI are oversold and turning bullish


with this week's rebound signaling that sideways to higher


prices are possible near-term. If this week's rebound


continues, fib resistance crossing at 320.30, then 322.90


are possible short-term upside objectives. Closes below


Monday's low would be open for a possible test of the 50%


retracement level crossing at 302.90 later this summer.




September silver closed sharply higher on Tuesday and above


last week's high crossing at 5.005. Today's high-range close


sets the stage for a possible test of June's reaction high


crossing at 5.075, then the contract high at 5.17 later this


month. Momentum indicators are bullish hinting that sideways


to higher prices are possible near-term.




September copper closed slightly lower on Tuesday as it


consolidates above Monday's low crossing at 75.30. September


remains range bound and needs to close above last week's


high at 77.90 or below 74.50 to clear up near-term direction


in the market. Momentum indicators are neutral to bullish


hinting that sideways to higher prices are possible near-


term.




FOOD & FIBER




September closed higher on Tuesday as it extended Monday's


short covering rally. Closes above last week's high crossing


at 52.45 would confirm a breakout above this spring's


downtrend line while opening the door for a possible test of


May's high crossing at 55.50 later this summer. Stochastics


and the RSI are bullish signaling that sideways to higher


prices are possible near-term.




September cocoa closed sharply higher on Tuesday and is


poised to test weekly resistance crossing at 1777 possibly


on Wednesday. Stochastics and the RSI are bullish but


overbought while the ADX signals that sideways to higher


prices are possible near-term. Trendline support begins near


1700.




October sugar renewed its rebound off June's low and closed


higher on Tuesday. The stage is set for a test of the top of


this spring's trading range crossing at 584 possibly on


Wednesday. If this resistance level is cleared, the 38%


retracement level of the 2001-02 decline crossing at 614 is


a possible target later this month. Stochastics and the RSI


are bullish signaling that sideways to higher prices are


possible near term.




December cotton posted an inside day with a higher close on


Tuesday as it continues to consolidate above this spring's


uptrend line crossing near 46.10. Closes above the late-June


high at 49.78 or below this spring's uptrend line are needed


to clear up near-term direction in the market. The daily ADX


turned down from levels often associated with market tops on


Monday thereby increasing the odds that a short-term top is


in or near. Trading is likely to remain choppy ahead of


Thursday's supply-demand report.




GRAINS & SOYBEAN COMPLEX




September corn closed higher on Tuesday following Monday's


crop condition report that showed a 5% decline in the good


to excellent crop rating, which came in at 53%. Additional


support came from forecast calling for triple digit temps to


move into the Midwest next week. However, gains were


limited due to forecasts calling for increased chances for


precip across portions of the Midwest over the next few


days. September needs to close above last Friday's high


crossing at 2.37 or below last week's low at 2.29 to clear


up near-term direction in the market. Closes above the


early-July high at 2.42 would renew this summer's rally and


could lead to a test of the 2.50 pivot level later this


month. Closes below 2.29 could trigger additional long-


liquidation that could lead to an eventual test of May's


high crossing at 2.22 3/4 then June's gap crossing at 2.17


later this month. Momentum indicators are overbought and


turning however, the daily ADX (a trend-following indicator)


remains in a bullish mode signaling that sideways to higher


prices are possible near-term.




September wheat closed higher on Tuesday due to spillover


strength from corn and beans. The wheat market continues to


play a following roll to the volatile row-crops. However,


September continues to consolidate below weekly resistance


crossing at 3.25 and above last week's reaction low at 3.16.


A breakout of this narrow trading range will point the


direction of the near-term trend. The daily ADX remains


bullish hinting that sideways to higher prices are possible


near-term. Trading is likely to be choppy ahead of


Thursday's supply-demand report. If this summer's rally


resumes, the 1998 high on the weekly September chart


crossing at 3.44 is a possible target later this summer.




SOYBEAN COMPLEX




August soybeans gapped up and closed higher on Tuesday


follow Monday's bullish crop condition report that showed a


decline in the good-excellent rating to 52%. Additional


support came from extended weather forecasts calling for


triple digit temps to possibly move into the Midwest next


week. Strong nearby demand, which is being reflected by the


inverse spreads in the market and stronger basis levels both


in the interior and at the gulf is also providing additional


support to the market. Today's breakout above weekly


resistance crossing at 5.49 has opened the door for a


possible test of the May 2000 high crossing at 5.84 1/2


later this month. The daily ADX is in a bullish mode


signaling that sideways to higher prices are possible near-


term.




August soybean meal closed higher on Tuesday spiking above


the next level of weekly resistance crossing at 183.70.


Closes above 183.70 would open the door for a likely test of


the May 2000 high crossing at 188.30 later this month. The


daily ADX (a trend-following indicator) is still bullish


signaling that sideways to higher prices are possible near-


term. Closes below last week's low crossing at 176 would


strongly suggest that a top has likely been posted.




LIVESTOCK and MEATS




August hogs closed sharply lower on Tuesday and below broken


trading range resistance crossing at 49.65 thereby


confirming Monday's downside reversal. Pressure came from


lower cash bids and contract rolling from August to October.


Today's close below broken trading range resistance crossing


at 49.65 leaves the door open for sideways to lower prices


on Wednesday. If the rebound off the late-June low resumes,


May's reaction high crossing at 53.40 is a possible target


in the near future.




August cattle closed below June's uptrend line crossing near


64.00 on Tuesday thereby increasing the odds that last week


have high marked a double top with May's high. The mid-range


close leaves the door open for sideways trading on Wednesday


as August cattle might try to test June's broken uptrend


line, which is normal market action following a trendline


breakout. Stochastics and the RSI are overbought and have


turned bearish signaling that additional weakness is


possible into the later part of July.