Daily Stock Market Outlook

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Daily Stock Market Outlook ~ October 9

The December NASDAQ 100 was higher in overnight trading as it consolidates some of this week's decline but remains below long-term support marked by the 62% retracement level of the 2002-2007-rally crossing at 1354.93. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near-term. If December extends this fall's decline, the 75% retracement level of the 2002-2007-rally crossing at 1162.31 is the next downside target. It will take closes above the 20-day moving average crossing at 1588.20 to confirm that a short-term low has been posted. The December NASDAQ 100 was up 32.25 pts. at 1352.25 as of 5:47 AM CST. First resistance is the 10-day moving average crossing at 1476.30. Second resistance is the 20-day moving average crossing at 1588.20. First support is Wednesday's low crossing at 1280.75. Second support is the 75% retracement level of the 2002-2007-rally crossing at 1162.31. Overnight action sets the stage for a higher opening by December NASDAQ 100 when the day session begins later this morning.

Interest Rates

December T-bonds were higher overnight as it consolidates some of Wednesday's decline but remains below the 10-day moving average crossing at 119-04. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends Wednesday's decline, September's low crossing at 116-03 is the next downside target. Closes above the 20-day moving average crossing at 119-05 would temper the near-term bearish outlook in the market. First resistance is the 20-day moving average crossing at 119-05. Second resistance is Monday's high crossing at 122-11. First support is Wednesday's low crossing at 117- 13. Second support is September's low crossing at 116-03. Overnight action sets the stage for September T-bonds to open 15/32's to 17/32's higher when the day session begins later this morning.

Energy

November crude oil was steady to slightly higher overnight due to short covering as it consolidates some of this week's decline but remains below the 62% retracement level of the 2007-2008-rally crossing at 92.39. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If November extends the decline, January's low crossing at 85.48 is the next downside target. Closes above the 20-day moving average crossing at 98.05 are needed to confirm that a short-term low has been posted. First resistance is broken support marked by the 62% retracement level of the 2007-2008-rally crossing at 92.39. Second resistance is the 10-day moving average crossing at 94.61. First support is Wednesday's low crossing at 86.05. Second support is January's low crossing at 85.48.

November heating oil was lower overnight as it extends this week's decline below the 75% retracement level of the 2007-2009-rally crossing at 254.50. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near-term. If November extends the decline, January's low crossing at 238.73 is the next downside target. Closes above the 20-day moving average crossing at 280.32 are needed to confirm that a short-term low has been posted. First resistance is the 75% retracement level of the aforementioned decline crossing at 254.50. Second resistance is the 10-day moving average crossing at 268.63. First support is Wednesday's low crossing at 239.71. Second support is January's low crossing at 238.73.

November unleaded gas was steady to slightly higher overnight due to short covering as it consolidates some of this week's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If November extends this week's decline, the 87% retracement level of the 2007-2008-rally crossing at 188.26 is the next downside target. Closes above the 20-day moving average crossing at 238.09 would temper the near-term bearish outlook in the market. First resistance is the 75% retracement level of the 2007-2008-rally crossing at 212.05. Second resistance is the 10-day moving average crossing at 224.65. First support is Wednesday's low crossing at 195.00. Second support is the 87% retracement level crossing at 188.26.

November Henry natural gas was higher due to short covering overnight as it consolidates some of this month's decline. Stochastics and the RSI are oversold but remain neutral to bearish hinting that additional weakness is possible near-term. If November extends this summer's decline, the 2006 December low crossing at 6.000 is the next downside target. Closes above the reaction high crossing at 7.938 are needed to confirm that a low has been posted. First resistance is the 10-day moving average crossing at 7.200. Second resistance is the 20-day moving average crossing at 7.537. First support is Wednesday's low crossing at 6.510. Second support is the December 2006 low crossing at 6.000.

Currencies

The December Dollar was lower overnight as it consolidates some of Monday's rally. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 78.97 are needed to confirm that a short-term top has been posted. If December extends the rally off September's low, weekly resistance crossing at 83.61 is the next upside target. First resistance is Monday's high crossing at 82.03. Second resistance is weekly resistance crossing at 83.61. First support is the 10-day moving average crossing at 79.98. Second support is the 20-day moving average crossing at 78.97.

The December Euro was higher overnight due to short covering as it consolidates some of Monday's decline. Stochastics and the RSI are oversold and are turning bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing at 141.943 are needed to confirm that a short-term low has been posted. If December extends this month's decline, weekly support crossing at 133.700 is the next downside target. First resistance is the 10-day moving average crossing at 139.550. Second resistance is the 20-day moving average crossing at 141.943. First support is Monday's low crossing at 134.480. Second support is weekly support crossing at 133.700.

The December British Pound was steady to slightly higher overnight as it consolidates some of Wednesday's decline but remains below September's low crossing at 1.7327. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends this week's breakout below September's low, weekly support crossing at 1.7062 is the next downside target. Closes above the 20-day moving average crossing at 1.7962 would confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 1.7841. Second resistance is the 20-day moving average crossing at 1.7962. First support is the overnight low crossing at 1.7184. Second support is weekly support crossing at 1.7062.

The December Swiss Franc was lower overnight due to profit taking as it consolidates some of Wednesday's rally. Stochastics and the RSI are oversold and are turning bullish hinting that a short-term low has been posted. Closes above the 20-day moving average crossing at .9034 would confirm that a short-term low has been posted. If December extends this week's decline, last October's low crossing at .8634 is the next downside target. First resistance is the 10-day moving average crossing at .8952. Second resistance is the 20-day moving average crossing at .9034. First support is Wednesday's low crossing at .8728. Second support is last October's low crossing at .8634.

The December Canadian Dollar was slightly higher overnight due to light short covering as it consolidates some of this week's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near-term. If December extends the decline, weekly support crossing at 85.97 is the next downside target. Closes above the 20-day moving average crossing at 93.92 would confirm that a short-term low has been posted. First resistance is broken support marked by September's low crossing at 92.22. Second resistance is the 10-day moving average crossing at 92.72. First support is Wednesday's low crossing at 88.86. Second support is weekly support crossing at 85.97.
The December Japanese Yen was lower overnight due to profit taking as it consolidates some of this month's rally. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If December extends the rally off August's low, May's high crossing at .10401 is the next upside target. Closes below the 20-day moving average crossing at .9621 are needed to confirm that a short-term top has been posted. First resistance is Wednesday's high crossing at .10234. Second resistance is May's high crossing at .10401. First support is the 10-day moving average crossing at .9730. Second support is the 20-day moving average crossing at .9621.

Precious Metals

December gold was lower overnight due to profit taking as it consolidates some of this week's rally but remains above the 10-day moving average crossing at 877.20. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. If December extends the rally off September's low, the 75% retracement level of the July-September decline crossing at 970.90 is the next upside target. Closes below the reaction low crossing at 822.50 are needed to confirm that a top has been posted. First resistance is Wednesday's high crossing at 924.90. Second resistance is September's high crossing at 932.00. First support is the 10-day moving average crossing at 877.20. Second support is the 20-day moving average crossing at 864.60.

December silver was lower overnight as it consolidates below the 20-day moving average crossing at 12.134. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December renews last week's decline, September's low crossing at 10.310 is the next downside target. Closes above the 20-day moving average crossing at 12.134 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 12.005. Second resistance is the 20-day moving average crossing at 12.134. First support is last Friday's low crossing at 10.840. Second support is September's low crossing at 10.310.

December copper was higher overnight due to short covering as it consolidates some of this month's decline but remains below the 87% retracement level of the 2007-2008-rally crossing at 242.90. Stochastics and the RSI are oversold and are neutral hinting that a short-term low might be near. If December extends this summer's decline, the 2007 low crossing at 220.00 is the next downside target. Closes above the 20-day moving average crossing at 290.53 are needed to confirm that a short-term low has been posted. First resistance is broken support marked by the 87% retracement level of the 2007-2008-rally crossing at 242.90. Second resistance is the 75% retracement level of the 2007-2008-rally crossing at 265.80. First support is Wednesday's low crossing at 228.50. Second support is the 2007 low crossing at 220.00.

Food & Fiber

December coffee closed higher on Wednesday due to short covering as it consolidated some of this week's decline. The high- range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends this month's decline, monthly support crossing at 10.672 is the next downside target. Closes above the 20-day moving average crossing at 13.033 are needed to confirm that a low has been posted.

December cocoa closed lower on Wednesday and below the 62% retracement level of the 2007-2008-rally crossing at 23.91. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends this week's decline, the 75% retracement level of the aforementioned rally crossing at 22.02 is the next downside target. Closes above the 20-day moving average crossing at 25.78 are needed to confirm that a short-term low has been posted.

October sugar closed lower on Wednesday as it extended Tuesday's decline. The mid-range close set the stage for a steady opening on Thursday. Stochastics and the RSI are turning neutral hinting that a short-term top might be in or is near. Closes below the 10-day moving average crossing at 12.26 would confirm that a short-term top has been posted. If October renews last week's rally, the reaction high crossing at 14.43 is the next upside target.

December cotton closed higher on Wednesday due to short covering as it consolidated some of this month's decline. The high- range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. If December extends this year's decline, monthly support crossing at 51.65 is the next downside target. Closes above the 20-day moving average crossing at 59.82 are needed to confirm that a short-term low has been posted.

Grains

December corn was higher overnight as it extends Wednesday's rally, which marked an reversal after spiking below support marked by the 87% retracement level of the 2007-2008-rally crossing at 4.27 1/4 earlier in the week. This support level coincides with the long-term monthly uptrend line and needs to be defended by bulls in order to keep the major uptrend alive. This week's Dow Jones Newswires poll indicates that the trade expects USDA's corn crop estimate to come in at 12.076 billion bushels with a yield of 152.3 bushels per acre in Friday morning's report. This compares with their September estimate of 12.072 billion bushels on a yield of 152.3 bushels per acre. New-crop corn stocks are expected to come in at 1.138 billion bushels, up 20 million from September. Stochastics and the RSI are oversold but are turning bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing at 5.08 1/4 are needed to confirm that a seasonal low has been posted. If the decline off June's high continues, last August's low crossing at 3.75 1/2 is the next downside target. First resistance is the overnight high crossing at 4.39 1/2. Second resistance is the 10-day moving average crossing at 4.64 1/4. First support is Wednesday's low crossing at 4.07. Second support is the August 2007 low crossing at 3.75 1/2.

December wheat was higher overnight due to short covering as it consolidates above the 87% retracement level of the 2007-2008-rally crossing at 5.98. Stochastics and the RSI are oversold but are neutral to bullish hinting that a short-term low might be in or is near. The USDA is expected to cut its stock estimate in Friday's supply-demand report, due to better-than-expected feed usage in the first quarter. The average trade estimate suggests that traders expect USDA to peg 2008-09 wheat stocks at 552 million bushels, down from 574 million the previous month. The high-range close overnight sets the stage for a steady to higher opening when the day session opens later this morning. Multiple closes above the 20-day moving average crossing at 6.83 are needed to confirm that a short-term low has been posted. If December extends the decline off August's high, last September's low crossing at 5.82 1/2 is the next downside target.

December Kansas City Wheat closed up 4-cents at 6.38. December Kansas City Wheat closed higher on Wednesday as it consolidates some of Monday's decline. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends this summer's decline, the 87% retracement level of the 2007-2008-rally crossing at 5.86 3/4 is the next downside target. Closes above the 20-day moving average crossing at 7.23 are needed to confirm that a bottom has been posted.

December Minneapolis wheat closed up 8 1/4-cents at 6.74 1/4. December Minneapolis wheat closed higher on Wednesday as it consolidates some of Monday's decline but remains below the 75% retracement level of the 2007-2008 rally crossing at 6.88 3/4. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December renews this month's decline, the 87% retracement level of the 2007-2008 rally crossing at 5.84 1/4 is the next downside target. Closes above Monday's gap crossing at 7.00 1/2 would temper the near-term bearish outlook in the market. Closes above the September 29th gap crossing at 7.89 1/2 are needed to confirm that a short-term low been posted.

November soybeans were higher overnight due to short covering as it consolidates some of Monday's decline but remains below the 62% retracement level of the 2007-2008-rally crossing at 9.92 1/2. Stochastics and the RSI are oversold but are turning bullish hinting that a short-term low might be in or is near. Multiple closes above the 20-day moving average crossing at 10.90 3/4 are needed confirm that a short-term low has been posted. If November extends this month's decline, the 75% retracement level of the 2007-2008-rally crossing at 8.55 is the next downside target. The average trade guess for Friday morning's USDA crop report came in at 2.920 billion bushels with a yield of 39.9 bushels per acre. That compares with Septembers USDA estimate of 2.934 billion bushels on a yield of 40 bushels per acre. First resistance is broken support marked by 62% retracement level of the 2007-2008-rally crossing at 9.92 1/2. Second resistance is the 10-day moving average crossing at 10.15 1/4. First support is Wednesday's low crossing at 9.11. Second support is the 75% retracement level crossing at 8.55.

December soybean meal was higher overnight due to short covering as it consolidated some of Monday's decline. The high-range overnight close set the stage for a steady to higher opening when the day session begins later this morning. Stochastics and the RSI are oversold and are turning bullish hinting that a short-term low might be in or is near. Multiple closes above the 20-day moving average crossing at 302.40 are needed to confirm that a short-term low has been posted. If December extends this fall's decline, last November's low crossing at 246.90 is thet next downside target.

December soybean oil was higher overnight due to short covering as it consolidates some of this week's decline but remains below the 87% retracement level of the August-2007/March-2008 rally crossing at 40.78. Stochastics and the RSI are oversold and are turning bullish hinting that a short-erm low might be in or is near. Multiple closes above the 20-day moving average crossing at 44.92 are needed to confirm that a short-term low has been posted. If December extends this summer's decline, last August low crossing at 36.05 is the next downside target.

Livestock

October hogs closed up $0.97 at $67.87. October hogs closed higher on Wednesday as it extends this week's short covering rally. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. Closes above the reaction high crossing at 69.67 are needed to confirm that a short-term low has been posted. If October renews this fall's decline, last October's low crossing at 64.20 is the next downside target. First resistance is today's high crossing at 68.00. Second resistance is the reaction high crossing at 69.75. First support is Monday's low crossing at 65.00. Second support is last October's low crossing at 64.20.

February bellies closed down $2.10 at $91.25. February bellies posted a key reversal down on Wednesday and closed below the 20-day moving average crossing at 92.57. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If February extends today's decline, the reaction low crossing at 87.50 is the next downside target. Closes above the 10-day moving average crossing at 94.40 would temper the near-term bearish outlook in the market.

October cattle closed down $0.95-cents at 92.45. October cattle closed lower on Wednesday as it extends this week's decline. A short covering rally tempered early losses and the high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If October extends this month's decline, weekly support crossing at 90.07 is the next downside target. Closes above the 20-day moving average crossing at 99.47 are needed to confirm that a short-term low has been posted.

October feeder cattle closed down $0.30 at $98.90. October Feeder cattle closed lower on Wednesday and spiked to a new contract low. A short covering rally tempered early losses and the high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold and are turning neutral to bullish hinting that a short-term low might be near. Closes above the 20-day moving average crossing at 104.58 are needed to confirm that a short-term low has been posted. If October extends this month's decline, weekly support crossing at 96.15 is the next downside target.