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THIS PUBLICATION CONTAINS THE VIEW AND OPINIONS OF THE AUTHOR, EXCEPT WHERE OPINIONS ARE ATTRIBUTED TO OTHER SOURCES. WRITTEN PERMISSION IS. REQUIRED PRIOR TO ANY DISTRIBUTION OR REPRODUCTION. FUTURES TRADING IS RISKY AND CAN CAUSE SUBSTANTIAL FINANCIAL LOSS. THE USE OF OPTIONS AND OPTION TRADING INVOLVES A HIGH DEGREE OF RISK. THE USE OF STOPS MAY NOT LIMIT LOSSES TO INTENDED AMOUNTS. SPREAD POSITIONS MAY NOT BE LESS RISKY THAN OUTRIGHT FUTURES POSITIONS. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. SOURCES ARE BELIEVED TO BE RELIABLE BUT NO ASSURANCE IS MADE FOR ACCURACY. ADDITIONAL RISK DISCLOSURE IS AVAILABLE.

THE
FuturesCom
BI-WEEKLY INVESTMENT OUTLOOK

Saturday, January 11, 1997 10:36:19 AM e.s.t

‘Among the Hazards of Speculation the happening of the unexpected-
I might even say the unexpectable - ranks high’
- Jesse livermore -

On the Forex Front.

The March J-Yen: The close up 24 on Friday. We feel the yen should work its way higher. If the JYH holds the 8668 support region early next week a rally into the 8800 region perhaps as high as 8890 to 8934 is not out of the question. A close over 8750 would be a confirmation of this. A close under 8620 should be the sign to get out... Resistance early in the week is near 8775 then 8843 to 8871. A suggested strategy would be to Buy JYH near 8675 with a stop close only under 8618.

The March Swiss Franc still acts badly and is having trouble getting out of its own way. however an oversold condition exists and a pop into the 7414 to 7428 area is likely If the shorts were to cover a bit. A close over 7347 is friendly for a turn towards 7400. Early support next week is near 7303 then 7258 where hearty traders should buy for that turn. Use a stop under 7253 basis the close. Resistance is at 7353 to 7377 then 7413. If the SFH has a 2-4 day rally into the 7587 should be sold for a resumption the bear trend.

British Pound closed at its lowest level since Dec 26th. We still see a higher Sterling down the road and suggest buying near the 16550 region if able next week. Use a stop under 164.00 The Resistance is near 168.90 then 170.10. Trade accordingly

March D-Mark is another oversold condition, If the DMH holds 6331 and closes above 6360 a pop into the 6407 region is likely. That is where we would gladly sell our longs and look for a spot to short for a resumption of the trend Down.

The Precious Metals:

Feb gold finally attracted some buyers after blazing down over 16 dollars an ounce from the close on Dec 30 to the recent lows. The Big question is will gold go into a tail spin towards $ 328? We feel gold has value at these levels and should be accumulated for longer term positions. Technically speaking Feb Gold need to hold over 357.80 for any upward trade to occur. Resistance is now near 367.80 then 374 to 377. Trade accordingly.

March Silver never closed under previously mentioned critical 463 level. A rally back to 480 to 484 where sellers will show up. Our target for March Silver is now 492.a close over 488 would cause some bears to run and the Silver would then pop into the 503 region if it holds.

March Copper has performed nicely up almost 800 pts since 12-30-1997. Copper may finally reach the 110 level sooner than most analysts think. /however a reasonable decline 2- 3 day dips should be bought. Support Early next week is 105.60 then near 104.40 and 103.15 where we would go long with stops under 102.10. Nearby resistance is at 106.40 and 106.90 a close over that augurs for a test of 109.05 and 110.40 where we would take some profits on longs.

Be long with but use your stops....

The Exciting Energies

Buy sharp 2-3 day set backs...

Feb Crude Oil closed lower on Thursday and Friday we would look at a decline into the 2512 Support region as a buying opportunity. Use a stop Under 2477. Nearby Early Resistance is near 2619 then 2636 Support comes in next week at 2586 where we would probe the long side with a stop under 2566.

Feb Heating Oil Support is near 7065 then 7045 where we would buy for a turn with a 70 pt stop. Resistance is near 7245 and 7285 Trade accordingly. We will start to watch March shortly.

The Grande Grains:

March Beans caught all the shorts with their ‘pants down’ after the USDA report. The funds bought and tried to buy more limit up on Friday while the Commercials Gladly sold. The best thing about the recent strength in the Beans is volatility, it’s has returned and volatility offers movement and movement offers chance .....

We will try to simplify things and give good buy and sell points and targets and avoid what most traders will do is watch the weather in South America and all the other things You will read from other sources.

The March Beans should now test 746 3/4 if they hold 718 3/4 and indication of this Occurring would be posturing over 733 on Monday. A close over 751 1/2 early next week would indicates a test of 772.

We would buy March Beans at 724 to 725 with a protective stop under 714. Resistance on Monday is 731 to 732. Aggressive traders can Buy March Beans On a stop at 735 for a pop into the 747 region. Use a stop under 729 if that happens.

March Corn.. Long Term Traders Sell Rallies into the 278 area as we suspect Corn will have trouble sustaining a close over 280. There is plenty of Corn around ....

Support for Monday is near 263 a trade under tells us something is wrong. If that happens you must keep a keen eye on Beans. Resistance is near 273 then 280.

Wheat: Buy July wheat at 351 to 357 and sell July 380 and 390 calls for long term traders. July wheat has support at 351 and Resistance at 357 a close over 357 indicate a possible move to 380 to 390.

March wheat has support at 378 1/4 where we would buy for a bounce with a Stop under 372. Resistance is near 390 14 to 392 3/4. A close over this region indicates a test of 402 to 411 trade accordingly.

The Bull Report also had a big impact on the spreads in Wheat. As traders bought all the backs and sold March causing March Wheat to close lower on the day. Expect that to continue after a 2-3 day set back.

We will be talking Grain Spreads in later reports.

Softs:

March Coffee still projects higher prices into February. A two to three day set back would give us an opportunity to go long for a rally into the 127 to 132 region and possibly beyond. Long term traders ....Good Support early next week is near 115.65 where we would have our buy orders resting.

However we feel that Coffee is more likely to stand on top and run. On Monday if Coffee is unable to trade under 119.65 it would encourage buyers to step up. If March Coffee opens over 120.60 Buy with a tight stop for a rally up to 123.45 and possibly 125.45. Support is near 119.20 then 118.15 more supports should be found at 116.40 to 116.90. Trade accordingly

March Cotton firmed up nicely Friday but closed rather weakfish We are friendly to March cotton. However we will refrain from major purchases until close over 7400 is achieved. Support near 7320 where we would have buy orders resting for a 3 two day bounce at 7315 More support is near 7265. Resistance is near 7390 then 7420 to 7435 then 7485 to 7520.

Sugar has been down 5 days in a row and we advocate purchases near 1058 to 1061 on Monday for a position with stops placed for protection below 1040. Resistance is near 1071 to 1073 then 1089 Trade accordingly.

March Cocoa Support next week is near 1319 then 1307 where we would buy for a two day Bounce with a 20 pt stop. Resistance is near 1338/ 1340 then 1363. A close over 1339 is needed to firm up the March Cocoa.

In the livestock Sector:

Feb Cattle: We have been Bullish Cattle for some time now and remain that way.

Feb Cattle should trade over 6650 shortly.

Good Support should appear near 6477 and 6412. Nearby support for early next week is near 6552 and 6515 where we would Buy for a turn higher with a stop under 6465. Resistance is near 6607 then 6627 and 6647 to 6672. A close over 6600 augurs for a test of 6740.

Feb Hogs have Resistance is near 7882 where we would sell with stop over 7910 basis the close. Nearby resistance is near 7807 failure to rally above that level indicates Resumption of the decline towards 7650.

Support early next week is near 7715 a close under is negative and indicates a possible wash to 7562.

June Hogs settled over Feb hogs by 170 pts we would like to take profits on the some Long June Shorts Feb spreads initiated at 150 under at these levels holding the balance until June trades at 225 to 300 over.

Buy June hogs near 7862 risk 80 pts. More support is near 7807. Resistance is near 7962 to 7987 where we would sell for a turn with a 80 pt stop Trade accordingly

Buy April hogs near 7560 for a bounce, risk 50 pts.

Feb Bellies lower prices are due shortly. Many Traders and analysts are not convinced bellies are in a sorry shape but a 500 pt decline from a report peak is not good. However a rally back to 8000 or higher is not out of the question. We do feel a wash is about to happen, a close under 7690 would indicate this. However we suggest buying against the 7692 level early in the week if able, then selling against 7990 later. We do remain bearish the Pork for 1997 but only wish to sell sharp rallies.

Early Resistance for the week is near 7990 to 8042 where we would sell for a turn and risk A close over 8137. As we probe the short side. More resistance is near 8117. Support is near 7767 then 7692 and 7622. A break under and close below the 7690 indicates a wash down to 7347 shortly

Trade accordingly.

Bonds and SP500:

We all know the Unemployment Story from Friday. The March Bond was in a precarious position anyway. Why else would We have stated that a sharp sell off was not out of the question. It was a well-deserved warning ...

March Bonds most likely will trade higher testing the 110-19 level and trying to reach up against 110-27 where we would sell for a turn and risk a trade over 111-12. A close under 110-03 or 109-27 augers for a test of 109-11 and down to 108-27 and most likely 108-18 if all Hell breaks loose. We would however buy a break down to 108-27 for a bounce while using a stop under 108-15.. If March Bonds can achieve a close over and maintain 110-27 then the worst may be over

Trade accordingly.....

March SP 500 and The Dow are still Bulls, however we still urge caution and consider It a ‘trading mkt’ rather than a position market. Stock market gave both sides of the coin a whirl on Friday. Friday’s close was at a target level sand resistance.

For the near term a close over 768.90 is needed to maintain the upward momentum. A decline from this area puts the market back into the same area and would lead to downside Volatility. Good support should appear near 763.50 and 762.15 where we would buy for a bounce with a 115 pt stop. More support should appear near 760.10 to 759.70. Below that 756.60 is likely to trade and 752.50 if 756 does not hold.

Resistance begins at 767.50 and 768.90 where we would sell for a turn and use a 115 pt stop. If the SP500 does take off to new levels the most likely target would be 776.30 to 776.80

Pick your poison....and be careful

Happy Trading

Bill

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