MARCH BONDS: March bonds sold off sharply following the December 5 Employment report, but found strong weekly support at 117-20. With the contract threatening new contract highs (119-26) as of this writing, we maintain a bullish outlook. This week's bounce has forced the daily MACD and stochastic oscillators to turn higher, and now that they are in sync with the weekly and monthly studies, further gains are expected. ADX continues to trend higher after generating signals from below 10 on both the weekly and monthly charts, indicating that the bulls have plenty of life left. New longs are recommended on weakness against the September 11 trendline at 117-29, with targets at the February 5-12 highs between 120-15 to 121-00.

MARCH EURODOLLARS: March Euros made a quick break below the August 8 trendline at 94.07 following the December 5 employment data, but failed to see much follow-through to the downside. The contract has since bounced above the October 28 descending trendline at 94.08, and we maintain a bullish outlook for the short end. This strength has generated a bullish cross from daily stochastics, and we anticipate further gains to the November 21 high of 94.24.

FEBRUARY GOLD: February gold continues to get whacked, reaching 1985 lows, currently trading at 286.7. While the daily studies are in an extremely oversold condition, and sentiment is very bearish, we will not attempt the long side until the contract is able to break above the October 1 trendline at 297.3.

JANUARY CRUDE OIL: January crude continues to establish new relative lows of 18.05 on December 10, currently trading at 18.20. However, both the daily MACD and stochastic oscillators are turning higher from oversold levels, and we look to buy a break above the November 14 trendline at 18.57. Target a test of the 20-day moving average at 19.45 and possibly the November 20 high of 20.04. Stop on a break to new lows below 18.00.

MARCH WHEAT: While March wheat has yet to see much upside follow-through following the break above the October 22, but the contract has established a new pattern of higher highs and higher lows off the November 25 low of 349.4. Therefore, with the daily studies maintaining their bullish bias, we look for further gains and a test of the August 29 descending trendline at 374.4. Buy dips against 357.0 with stops below 349.0.

MARCH CORN: March corn has also received little satisfaction following the break above the October 22 trendline at 283.4 on December 8, currently trading at 278.4. However, the daily MACD and stochastic oscillators have generated buy signals, and we expect the December 4 low of 276.6 to hold. Look for a break above 285.0 to confirm further strength with targets at the November 11 gap of 290.6.

JANUARY SOYBEANS: January beans continue to adhere to the November 11 descending trendline of 716.6, currently trading at 700.4. However note that the recent low of 693.0 on December 4 has failed to break below the October 30 low of 687.0. This keeps the pattern of higher highs and lower lows intact, and we look for a break above 716.6 as the contract searches for new highs. Buy against 687.0 or go long on a break above 716.6.

MARCH YEN: March yen made a break above the October 28 trendline at 7800, but has failed to hold onto its gains, currently trading at 7791. Nonetheless, we expect the December 8 low of 7756 to hold as the daily MACD oscillator has generated a bullish signal. However, due to the fact that ADX has downticked suggests that the contract is due for a period of consolidation rather than a new bull move. Aggressive traders can look to buy against 7756 with targets at the 20-day moving average of 7953. We prefer to stand aside and wait to join the long-term bear trend against the July 7 trendline at 8340.

MARCH DEUTSCHEMARK: The technical outlook for the D-mark is bullish as the contract is trading just below the November 7 descending trendline at 5677, currently trading at 5674. The daily stochastic and MACD oscillators have generated buy signals, but require a break above 5677 for technical confirmation. We anticipate further gains to the 20-day moving average at 5724, then the psychological 5800 level.

MARCH POUND: The pound continues to establish new lows of 16354 on December 8, bouncing to 16490 as of this writing. The daily studies are attempting to climb out of oversold territory, but the contract will remain bearish below the November 12 trendline at 16684. With weekly stochastics also generating a bearish cross, we will wait for a chance to sell strength to 16680-90. Target new lows to 16600 with stops above the December 1 high of 16780.

MARCH CANADIAN DOLLAR: The outlook for the Canadian Dollar is very bearish following this week's new contract low of 7026 (6995 December). This weakness has resulted in a 10-year break-out to the downside on the monthly charts, confirming a bearish uptick from monthly ADX. While the short-term picture will likely see strength on potential BOC intervention, we will stand aside for now and look for an opportunity for new shorts.

DECEMBER S&P 500: December S&P's have sold-off after hitting a new high of 988.90 on December 5, currently trading at 958.00. The daily studies have turned over bearishly, and with the contract trading below the 20-day moving average at 961.25, further weakness is expected into next week. However, the overall bull trend remains intact, and we will look to re-enter longs against the November 13 low of 902.50. We will not become concerned until this support level gives way, and fully anticipate new highs in the coming weeks.

December 11, 1997 Roman I. Dutkewych

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