CRB INDEX:

Our stated pivot price for the Cash Index has been 244. Verification that the bull trend has resumed came at the end of the third week of rally when the Friday settlement rose above that level. The first objective now becomes the half-way point at 250 and if I have this pegged correctly, that will be a very transient problem. The bull market began in 1992 and last year brought the first substantive correction against that trend. I find it very interesting that after three years of advancing prices, this nine-month correction did not even reach the fifty-percent support at 230. Yearly through daily, every degree of trend is positive and before 1997 is over, a test of last year's high (264) is going to happen. The better question is: Will that be enough resistance to stop the larger bull trend? Perhaps for a few weeks, but don't lose the mind set that the major trend is bullish. Buy dips.

CORN:
Strike a pivot line at the 3.00 level and July corn has been thrashing around about ten cents on either side of that line during March. It has the look and feel of a fourth-wave correction, meaning that there is one more leg to higher prices. The logical target for that next advance is 3.26 which represents the fifty-percent recovery point back to 1996 high in the July contract. From that higher level, it will be reasonable to project a correction of 30 to 40 cents.

Timing will be a big feature to consider during April. Depending on where the settlement falls on the last day of March, this month will be either three up, or three up <169>but.<170> The key price to watch is 2.94. A month-end close above that number will increase the odds for a serious downward revision during April. On the other hand, if a dip occurs in the last week of March and CN finishes below 2.94, consider that to be the most bullish profile. The resulting three up <169>but<170> monthly cycle would give us a specific reason to forecast another three months of rising prices. At this early stage of development, a bullish monthly cycle will imply to me that presumed resistance at 3.26 will only offer a temporary problem on the way to 4.05. That higher figure represents the half-way point on the nearby chart. The important thing to remember is that when corn finally starts to come down, it will be a correction and not the beginning of a new bear trend.

OATS:
Oats continue to grind out a new rally high every couple of days and every thing still points to our original objective of 2.15. April will be the third month of advance for July oats, so there is a much better chance for an extended correction to occur over the next few weeks. From present levels, a pull back to the 1.60 area will look about right for ON. As previously advised, consider oats to be a buy on the next twelve- to fifteen-cent dip.

SOYBEANS:
Our intermediate-degree objective at 8.60 has been achieved. Actually, the top for July soybeans came last year at 8.56 and even though that resistance has been exceeded, the current July contract is still in the neighborhood and that means we are technically on a double top formation. So far, the bean market is leaving bullish foot prints all over the place so I think this zone of resistance will only be a short-term problem. The last two weeks have seen SN thrashing around this area in what could be interpreted as topping action. If that is true, a full, fifty percent correction could bring it down to 7.68 which is about where the rising ten-week moving average currently resides. The other possibility is that beans are simply paying lip service to natural resistance and this choppy behavior allows it to recharge batteries in preparation to the next thrust toward 9.00 and then 9.85. Seasonally, a quick dip into the middle of April is typical and almost always followed by a strong upward surge into May. As it happens, the seven-month cycle blends nicely with that forecast, calling for a peak late in May, or early in June. Be cautious in the first half of April, but keep a friendly attitude.

MEAL AND OIL:
As predicted, nearby Meal jumped to challenge the 1996 peak at 278 during March. More precisely, it blasted through to a new high, but only for a day. The situation is very much like that of soybeans on the timing perspective. Either it continues to soar and moves directly to the next target of 293, or we enter a few weeks of corrective behavior that allows the July contract to drizzle back to the 250 area. And then soar to the 293 level. Here too, the monthly cycle does not hint of a top until late May. July soybean oil came within a few ticks of our long-term pivot price of 27.00 and acted like it hit an upside-down trampoline. That is just the way it tends to be when the trend is truly bullish in soybeans. Oil just can't seem to get any respect and this is a good thing. Any bull trend that is lead by the oil market is just an ambush. Bad as it looks, there is no material price damage to the July contract until it closes with authority below the last reaction low at 24.37.

WHEAT:
Seasonally, wheat tends to find it easier to rally over the next six weeks and the bull trend has certainly earned its stripes over the last two months. Since it began the upward trek in December, no correction has dropped more than 26 cents in the July contract. Rally potential is humongous from this price level, so the obvious mandate is to buy any correction of 20 to 25 cents. The risk potential is perhaps a dime and the profit opportunity is just to the left of Nirvana.

Although the July contract is three up in March, the nearby chart is a little behind and April will be a swing month. From that perspective, a few weeks of corrective behavior will create a very bullish three up <169>but<170> monthly cycle for May. Either way, stay focussed on finding reasons and places to buy.

LIVE CATTLE:
Three up monthly timing diverted April cattle into a corrective posture as expected during March. A simple fifty-percent adjustment allows LCJ to reach 67.20 and so far, the bottom has been 67.40. The rising ten-week moving average appears to have rode in on its white horse and saved the day this past Thursday. Cattle often goes a little farther than necessary, so it may still jab below the obvious support here, but don't expect any prolonged selling pressure to develop. The nearby chart reflects a friendly three up <169>but<170> cycle for April and even if that doesn't get things started, May will be seven down from the 1996 extreme high. It is always desirable to have choices and in this case I think it is fair to say that the next leg up to 74.00 will begin in April, or it will begin in May. Take your pick. The worst case scenario is for LCJ to drop to the 65.00 level, but I don't expect it to get that far. Keep watching for an excuse to buy.

FEEDER CATTLE:
As predicted, April feeder cattle topped out on a splash above 70.00. In short order, that minor double top produced a 475-point drop before FCJ could find the brake pedal. The subsequent recovery has been a typical-short covering, false breakout type of pattern. The last week of March is the third week of rally and it sits just below the declining ten-week moving average. This pattern serves to temper my bullish impression of live cattle and suggests the corrective process will linger in the weeks ahead. If there is good news hidden in this situation it will come from declining prices during April. That will create a bullish monthly cycle for both feeders and fats.

LEAN HOGS:
April hogs went into a power dive in early March. Fortunately, it pulled out just inches above the triple bottom at 68.00 and has shifted effortlessly into a vertical take-off. The picture is even more constructive when you look at the nearby chart. Last year's bottom came at 70.00, so LHJ gunned below that old support and could not sustain those lower prices. Trader psychology was predominately bearish in this over-sold condition and that tends to exacerbate the inevitable rally that develops from this kind of pattern. The major half-way point on the nearby chart lies at 79.00 and the June contract has already surpassed it. Since LHM will represent the nearest contract in just a few weeks, I take this as a bullish omen. There is interim resistance to consider around 81.00 and then at 86.00. Don't preclude a return to the 1996 extreme high at 90.00 before this is over. Whatever the price turns out to be, I think the high for the year will be in place by the time the June contract expires. The yearly cycle is bearish and that is geared for declining prices in the second half of the year. I suspect this over-sold market will in short order become an over-bought situation.

PORK BELLIES:
May pork bellies attained 84.00 as expected and then the naturally erratic nature of this beast took over again. Bellies can always be counted on to make a new high before it collapses, or a new low before it jumps into a big rally. So it was at the top in early March and then again on 3/19/97 when PBK dropped below the February low at 73.30. 1 think this is all prelude to a false breakout pattern that will come to fruition in April. Assuming the trend is generally higher this month, May will be the seventh month of advance and therefore prime time for the recovery to end. It is a given that the peak will come above 84.00 and it could get as far as 90.00.

STOCK MARKET:
The negative monthly cycle did not bring the expected reversal to the DJIA, but it was very effective in the broader NASDAQ Composite Index. Selling pressure picked up momentum during March and dropped below various minor support targets. It is now approaching the critical fifty-percent line at 1204. Since April is the third month of decline, the odds are in favor of a sizeable recovery from that area. The ten-week moving average is now on the decline and that will surely be the limiting factor on this next bounce. Trader psychology has deteriorated to the point where there are as many bears now as when the market made it's last bottom in July of last year. I am bearish for the year as a whole, but the next few weeks look like a dangerous time to press the issue of a bear trend. We will learn much by observing the quality (duration and amplitude) of this next rally. As Yogi Berra is reported to have said: <169>You can observe a lot just by watching.<170>

The Dow Jones Industrial Average ended on a down stroke in February, but not by enough to inflict damage. The most worrisome thing about this Index is that it posted a new high in the second week of March and was immediately rejected from that level. Tone and trend have been progressively defensive in the following days and the DJIA has now dribbled below the ten-week moving average for the first time since rising above it in August of last year. The last week of March is a swing week and if it brings a small recovery, that will offer incentive to sell in the opening days of April. A logical target for a three-month correction will place the DJIA around 6150 which is half way back to the reaction low of 1996. Seems like a long way down, but it is really a normal and relatively modest adjustment. Before the year is over, I think a decline to 5500 is probable. In fact, given the confluence of negative yearly cycle, it should be thought of as the minimum objective.

The Transportation Index was living in a world all its own as it charged to a new high in March and showed more energy in that direction than any other Index. Apart from that decidedly bullish behavior, I don't see a new feature to focus on for April. Use the same pivot price as outlined in the previous issue. A close below 2300 is required to objectively reverse the trend of this Index.

A fifty-percent decline is a common feature of any bull trend and it is a telling clue when that reference point is violated. That is what just happened in the Utility Index. Half way back to the 1996 low should have stopped the decline at 223 and Utilities sliced through that number as if it were not there. Three down monthly timing will be helpful in generating a recovery, but we have evidence to encourage us to view that as a counter-trend event. If the rally starts right now, it will run into a wall around 231. When that is over, the next decline will carry down to 205.

T-BONDS:
Unless something truly amazing takes place in the last week of March, June bonds are going to close lower at the end of the third month of decline. As a rule of thumb, if any market fails to reverse in the third month, we must assume that the current trend will continue into the seventh month. In this case, if the last day of March finishes below 110-14 it will be a projection for general selling pressure into July. Along the way, last year's low at 106 will surely stimulate some degree of rally potential. Depending on how it sets up and exactly where it bottoms, the recovery should be in the 4- to 5-point range. Seven down weekly timing will be a factor in the week ending 4/11/97, so if bonds are still on the decline entering that week, be prepared for a brisk reversal.

GOLD:
February brought a huge monthly reversal and the largest rally in a very long time. The market has announced a change in character and that gives us permission to consider buying the next dip. After the initial, three-week surge, gold is now on a dip to test the contract low. As long as it holds (it will), the next leg up will gravitate to the major proportional resistance at 377. At this point, I think a strong close above 355 will prove that the correction is completed for April gold and buying momentum will be on the rise. SILVER: Silver has turned docile in recent weeks, but that is just the lull before the storm. This quiet correction is forming a bullish three up <169>but<170> monthly cycle for April. If I could write the script, the July contract will drop into the primary zone of support between 5.10 and 5.00 and allow us a relatively safe place to buy in front of the next leg up. Before the year is over, nearby silver will be probing the 6.00 level and I am not sure that will stop it.

COPPER:
We were looking for a 600- to 800-point drop from initial contact with resistance at 1.15. The glide path took nearby copper skidding a little past 1.15, but it quickly dropped into a correction and the bottom came 715 points later. As the May contract becomes the front month it will soon be testing the same resistance at 1.15 and perhaps we can do an instant replay. If they manage to scoot past old resistance, the next target is 1.21. Either way, April is a seven up monthly cycle so stay alert for a bearish reversal this month. The next drop will be more than 800 points.

ENERGY:
May crude oil slipped a little past the projected support at 20.50, but the rally developed pretty much on schedule in the early days of March. Our projection was for the rally to cover 200 to 300 points and CLK now stands 257 points off the bottom. It stalled right at the ten-week moving average and the minor fifty-percent line at 22.20. More is possible, but I am not optimistic about staying power on this recovery. Mainly, the problem is three down <169>but<170> monthly timing that has accrued for April. I don't expect nearby crude to fall below 20.00 any time soon, but the monthly cycle tells us to be on guard for another probe of that long-term support.

By comparison, unleaded gasoline has done a better job on this recovery effort and it strongly hints at another run to the recent set of highs around 72.00. Like crude oil, the monthly cycle is a bearish three down <169>but<170> so whatever the price, look for a top in the first half of April.

Heating oil continues to be the weakest member of this group. Declines are more severe and rallies more subdued. Here too the monthly cycle is bearish so it is a universal influence which adds credibility to the probability of renewed selling pressure. The next leg down will surely find support against the 1996 low at 50.00 and at that point, we may want to seriously consider buying for a sustained advance into the fall.

SWISS FRANC:
Nearby Swiss is holding the indicated support at 67.00 and making noises like a bottom. Well okay, perhaps it is more like a soft murmur--and it is only on the daily chart. The weekly perspective will not grant approval for a sustained recovery effort until there is a strong close above 70.50. If that happens, internal dynamics will dictate a run to the 74.00 to 76.00 area. I still think we need to keep the door open for a final slam down to the major support target of 62.00, but that could very well happen after we get a three-month bump to the upside.

JAPANESE YEN:
Sellers in the yen seem to be beating a dead horse. Enough, it's dead already! Long-term support at 81.00 has done an excellent job of stabilizing the downward trend, but for some reason this market cannot grasp the concept of upward motion. It is worrisome that it is taking so long to generate a credible rally, but this is such an important support level that I think we should be a little more patient. If we stretch to measure from the 1974 low, the major half-way point drops a little bit to the 78.50 level and that should be the worst case scenario. This has been a move ending pattern of grand dimension, so when the fan gets dirty, the yen is going to accelerate into a huge rally. Here is a late entry for your list of New Year resolutions: Don't be short the yen. Put it at the top of the list.

U.S. DOLLAR:
The trading range is six years wide and counting. In round figures, the boundaries are 96.00 and 80.00. The nearest contract is now at the top of this congestion for the third time and the third time usually holds. It is the fourth time that usually punctures the old barrier, so the odds are against sustained growth on this particular trip. A few months of corrective activity, say back to the 89.00 area, will put the dollar in a strong position to carry the flag above 100 on the next try.

SUGAR:
As usual, the daily chart looks constructive for a while, but it never leads to anything. The monthly chart is stuck in neutral, although the pattern is bearish. Sugar almost always does a <169>crash and burn<170> routine before it begins a serious bull market. As I have said for months, I don't believe sugar will go anywhere until it first gushes below 10.00. I think it is best to keep this one at arm's length until the pattern plays out.

COTTON:
This most recent bounce was a bit more exaggerated than some of its more recent competitors, but in the end it was the same old maneuver we have seen a number of times over the last nine months. The daily chart fires off the bottom, the rally carries for three weeks and then abruptly reverses back to the bottom of the barrel. Put it this way, cotton has been trying to get a recovery going for nine months and has nothing to show for the effort. Until the demeanor of this market changes, we have to assume there is another leg coming down to 68.00.

COCOA:
I knew a buying opportunity was around the corner, but I was hoping that corner would be at a lower price. After two-and-a-half years of indecision, cocoa is finally doing something definitive. If the May contract stays above 1400 on the last day of March it will register as a bullish breakout on the nearby monthly chart. Once is clears interim resistance at 1500, the path will be cleared for a gush up to 1800. That higher figure is the half-way point back to the 1984 rally top. However, if we give cocoa the next eighteen months to accomplish it, I think we will see a probe of the 1984 top itself. The projection now jumps to 2800 and curiously, that also approximates the fifty-percent mark back to 1977 peak around 4900. April is a swing month, so a three-week correction is to die for. Any dip under 1400 will offer a major buying opportunity in front of a multi-month advance.

April, 1997
Fourth Time, Inc.
P.O. Box 17468, Milwaukee, Wisconsin

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