4-Weeks of our Weekly Commodity Market Commentary, Complimentary

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DEC. S & P e-MINI

LARGER PATTERNS AND CYCLES: (10/14) We think that the 837 low will hold for at least 3-4 days with recoveries back to 1080 or 1110 possible but less likely if the market goes to 887 first. With that quick a move, the market may consolidate that range for months with a first pullback of 78% to 887 probably into Oct. 20 or Oct. 31 or the week of Nov. 7 and then make another higher low into Dec. 12-15. New lows will come next year unless the market takes out 1270 on the upside. Eventually 780 and 700 may need to come in. Short-term cycles suggest stocks will probably peak into the close of Oct. 15 and then be lower into Oct. 20 and Oct. 30-31. Numbers will change daily so we will keep you posted one day at a time. Fear cycles get ugly again Oct. 20-31 but we should have breather during the week ending Oct. 17.

LONGER-TERM: (10/14) The general economic recession (if we are lucky to just get away with that) will easily affect us into at least into Oct. 2009 and that could mean bear market basing and failed bear market rallies. We doubt that the troubles in Europe and eventually Asia will go away that quickly. The U.S. bailout plan may take 5-6 months to implement, and the latest magic bullet from the FED was sold off. Global intervention is working at the moment but will it loosen bank lending? That was not happening this morning. The media will be all over declaring a bottom but there is always at least a retest low and we have new lows into Feb. 2009 and probably early April 2009 and we will have to do more research about the rest of 2009.

NOTE: The 120-year cycle analogue does not suggest a low into the first week of December and we would easily extend it to Dec. 14 based on minor cycles.

LONGER-TERM OUTLOOK FOR 2008-2009: (10/6) We are generally bearish the stock market into Oct. 2009 and like all bear markets there will be rallies and sideways congestions and sharp new lows. At the moment patterns project at least 789-805 into 2009 but we may even revise that at some point. For now we would not go back into stocks unless the market takes out 1270, and I doubt we will see that. By the end of 2009 we may have seen a 55% drop, much like we saw in 1973-4. We looked closely at 2009 and it is a very sideways to lower year. Unemployment should easily hit 8-9% next year but we should not be throwing out comparisons with the Great Depression. The housing crisis and higher crude are likely to prevent much upward action in 2009. Crude still projects up strongly even if it starts a rally from 61-62 dollars into Oct. 31 and heating oil shortages will start the inflation cycle again.

DEC. DOLLAR INDEX (electronic)

OVERALL: We are inclined to think that we are starting a larger 4th wave lower to the 7700 region into the week of Nov. 27. Next sale will be into Oct. 20. Still, we think crude has to hit 6156 so that may keep the dollar moving higher so we need to watch Oct. 24 for a possible secondary high or new high first or the dollar.

BIG PICTURE SYNTHESIS: (10/14) The dollar was due for a cycle high the week of Oct. 13 and it probably has come in. Lower prices are due toward the 7600-7700 region and that will be followed by another rally into the week of Jan. 23, 2009 toward the 9380 region. Crude making new lows to 6150 may create a secondary high into the end of the month. The longer-term picture for the dollar suggests higher dollars into Feb. 2011 and from there we will start the big dollar crash into 2012 and 2013.

CHICAGO DEC. MINI-GOLD (electronic)

NEAR TERM: (10/15) Gold should be lower into Sunday or Monday and we will not get caught up on 816 or 800 holding it. Target sell areas are 863 and 875.

OVERALL: If crude falls to 61-62, gold may be in trouble down to at least a retest of the 745-750 region and could even fall to 700 or 650. That seems likely into the Nov. 2 low. There is a megaphone pattern that would allow a fall into Monday, Oct. 20 and then a strong rally up to 1000 into the week of Oct. 20 and then a strong fall into Nov. 2. Support is at 801.60 and 780.20 but closing under 800 would start leading to a more convincing signal that 700 or 650 will need to come in--and if crude falls to 8000 into November, that may be the case.

NOV. e-mini CRUDE (electronic)

NEAR TERM: Patterns to the downside point to 6156 and with cycle lows due the week of Oct. 20-24 and an extension a week later is possible.

BIG PICTURE: (9/29) We are getting projections 6100-6250 on the weekly continuation chart and with the recession scare, it seems inevitable. Maybe it will take until mid to late October but by late November, heating oil starts having a positive influence on buying. With the meltdown in the CRB into late October, it's difficult to really hold onto anything long anyway.

MONTHLY CHART OVERVIEW: (10/10) Should we throw out long-term monthly targets and assume that the recession will take over everything? Possibly, but we still see international conflict cycles and abnormally cold weather this winter so something startlingly positive may come out of nowhere. If that is the case, we do think new record highs are possible.

DEC. CORN (electronic)

BIG PICTURE SYNTHESIS: (10/14) We ran new research on corn and cycle lows are not due until Nov. 2 and then we get a rally into the week of Dec. 12. We really need to see 5 waves lower from the 624 area and the August high, and that could even project 346-350 into November.

MAJOR POSITION DATES: Oct. 31, Nov. 2 (weekly chart low), Dec. 8 (retracement high).

POSITION TRADE OVERVIEW: (10/14) We would still focus on selling Dec. corn on recoveries to 430 and 442 into Oct. 14-15 looking for lower prices into at least Oct. 31 with a target of 342-3. 

NOV. BEANS (electronic)

BIG PICTURE SYNTHESIS: (10/14) Bean cycles on the weekly chart are due to bottom into Nov. 2 or a few days later and rally into the week of Thanksgiving. We still have plenty of time to fall to the 770 region into that time window so we are not going to be into early bottom picking. Rallies are not likely to at least 964. We do want to stay open to more than a 3-day rally happening here but for now we will be patient and could it chop around for 5 days.

POSITION TRADE OVERVIEW: (10/14) With monthly chart cycles bottom by Nov. 2, we then see monthly chart cycle highs into the week of April 10, 2009. We are not clear how high beans will go cycles would seem to imply problems with the South American crop. Smaller cycles suggest a rally from Nov. 2 into Nov. 27 or Dec. 1 before a sell-off into the week of Jan. 2 and then a rally into the second week of February. The upward potential will depend on a strong oil rally into the winter and problems with the South American crop. We cannot rule out 730-770 into about Nov. 2. Position traders should watch for the last sale into the end of the month toward 975 or higher into Nov. 14-15.

For the past 21 years,Barry Rosen has been in the business of advising clients on market timing using modern adaptations to certain ancient cycles. His company Fortucast Market Timing Inc. publishes daily and intraday reports on over 20 futures markets, and mutual fund indices/ETFs using Gann, Elliott wave and five cyclical models. Barry recently predicted the July 15 low on the S & P to the day, hitting the price within .75 ticks--and in fact has been forecasting a major break in the stock market of about 33% since January. Earlier this month he was interviewed by CNBC. Timer Digest ranked the Fortucast Alternative Investment Newsletter 6th in long-term timers over the years and 5th for Top Ten Timers between March 2007 and March 2008.

Mr. Rosen is registered with the NFA and the CFTC as a Commodity Trading Advisor (CTA). Fortucast uses proprietary cyclical timing models to filter out false indicators. His opinions on the markets are his own and do not necessarily represent the view of FutureSource. For more information about Mr. Rosen or his company, please visit his company's website: www.fortucast.com

WANT TO SEE MORE? This article in Fast Break provides the Fortucast outlook for only a few markets. Go here to get COMPLIMENTARY picks on 14 financial futures for 2 weeks -- includes intraday updates!