T U E S D A Y   E V E N I N G   E X T R E M E   M A R K E T S
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Tuesday: The CRB Index has eased 0.98 points to 189.09. The
US Dollar Index gained 0.05 points to 117.71.

The Dow Industrials slipped 58.05 points, at 9713.80, while
the S&P 500 dropped 8.27 points, last seen at 1119.31. The
Nasdaq Composite retreated 47.80 points to 1882.54.
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E X T R E M E   M A R K E T   C O M M E N T A R Y
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The STOCK INDEXES http://quotes.ino.com/exchanges/?c=indexes

Stock indexes closed sharply lower on Tuesday due to suspicions about
earning prospects in technology stocks during the first quarter of
this year dim. The NASDAQ closed sharply lower on Tuesday breaking
out below December's reaction low crossing at 1918.50, which
coincides with the 25% retracement level of the rally off last
September's low. The door is open for additional weakness with the
38% retracement level crossing at 1826.96 being the next likely
downside target later this winter. The NASDAQ closed down 47.81
points at 1882.53. The March S&P 500 index also closed lower on
Tuesday as it posted a key reversal down and finished the day below
the 25% retracement level of the rally off September's low crossing
at 1122.57. Multiple closes below this support level and December's
low at 1115 would open the door for a larger-degree decline during
the last half of January. The March S&P 500 closed down 6.90 points
at 1121.70.

The Dow closed lower on Tuesday and is challenging key fib support
crossing at 9706.20. The Dow closed down for the eleventh time in the
past thirteen trading sessions as earnings forecasts seen do not
justify the gains we saw in the fourth quarter of last year. The Dow
is at an important crossroads. Closes below 9706.20 would open the
door for a larger-degree decline into late winter. At the same time,
short-term momentum indicators are bearish but becoming oversold
hinting that at the very least we could see a short covering bounce
possibly into the end of January. Today's low-range close sets the
stage for a steady to weaker opening on Wednesday.

INTEREST RATES http://quotes.ino.com/exchanges/?c=interest

March T-bonds posted an inside day with a lower close on Tuesday
thereby leaving last Friday's upside reversal unconfirmed. Last
week's breakout below January's uptrend line has increased the odds
that a short-term top has been posted. Closes below last Friday's low
crossing at 102-17 are needed to confirm the trendline breakout is
for real. Momentum indicators are overbought and turning neutral to
bearish hinting that we could see sideways to lower prices near-term.

The CRB INDEX http://quotes.ino.com/exchanges/?c=indexes

The CRB index closed lower for the third day in a row on Tuesday due
to weakness in grains, precious metals, some foods and fiber. Last
week's breakout below the fall uptrend line crossing near 191.15 has
opened the door for sideways to lower prices into the latter part of
January. If the decline continues, December's reaction low crossing
at 187.73 is the CRB's next likely target. Momentum indicators are
bearish signaling that sideways to lower prices are possible into the
end of January.

ENERGY MARKETS http://quotes.ino.com/exchanges/?c=energy

The energy markets closed higher on Tuesday due to short covering
ahead of the release of this afternoon's API inventory reports. Gains
were limited due to expectations for builds in crude oil and product
inventories last week.

March crude oil closed higher on Tuesday as it rebounded off
December's reaction low crossing at 18.45. Today's anemic bounce
under scores the weak tone of the market, which remains vulnerable to
additional weakness into the later part of January if this week's API
inventory report comes in neutral to bearish. Stochastics and the RSI
are bearish signaling that additional weakness is possible near-term.

March heating oil closed slightly higher on Tuesday but ended the day
near mid-range as it consolidates above trading range support
crossing at 51.30. Closes below this key support level would confirm
a trading range breakout while opening the door for a possible test
of weekly support crossing at 49.30 later this winter. Mild temps
across high demand regions of the country and weak industrial demand
continues to weigh on prices. Momentum indicators are bearish but
oversold while trend-following indicators are in position to confirm
a trading range breakout.

March unleaded gas closed modestly higher on Tuesday due to light
short covering as it rebounded off last fall's uptrend line crossing
near 55.05. Closes below this support level would open the door for a
likely test of last fall's lows beginning at 53.00 and extending down
to 51.90. Stochastics and the RSI are bearish signaling that
additional weakness is possible into the last half of January. Closes
above 58.70 would temper the near-term bearish outlook in the market.

March Henry Hub natural gas closed into new contract lows on Tuesday
as above normal temps across high-demand regions of the U.S. and
limited industrial demand continue to weigh on prices. Today's
breakout into new contract lows has renewed the larger-degree
downtrend. If the decline continues, weekly support crossing at 1.76
is March's next downside target later this winter.

CURRENCIES http://quotes.ino.com/exchanges/?c=currencies

The March Dollar closed higher on Tuesday thereby negating last
Friday's key reversal down. However, today's low-range close leaves
the market vulnerable to a softer opening on Wednesday. Nevertheless,
stochastics and the RSI remain bullish signaling that a test of
December's high crossing at 118.85 is possible later this month.

The March Swiss Franc posted a quiet inside day with a slightly lower
close on Tuesday as March continues to consolidate above last fall's
trading range support crossing at .5973. Multiple closes below this
support level or above neckline resistance crossing near .6067 are
needed to clear up near-term direction in the market. Stochastics and
the RSI remain bearish signaling that sideways to lower prices are
still possible into the end of January.

The March Canadian Dollar closed higher on Tuesday due to light short
covering as they consolidate some of last week's losses. However,
momentum indicators are turning neutral to bearish hinting that
additional weakness is possible into the end of January. It would
take closes above broken support crossing at .6230 to temper the
near-term bearish outlook in the market.

The March Japanese Yen broke out below key weekly support crossing at
.7558 on Tuesday thereby renewing the larger- degree downtrend. A
short covering bounce late in the session tempered some of today's
loss leaving the door open for additional short covering on
Wednesday. Nevertheless, today's breakout into a new contract low has
opened the door for a possible test of the next level of weekly
support crossing at .7371. Momentum indicators are turning bearish
with today's sell off signaling that additional weakness is likely
into the end of January.

PRECIOUS METALS http://quotes.ino.com/exchanges/?c=metals

February gold closed lower on Tuesday as it tested December's uptrend
line crossing near 282. Closes below this support level would confirm
a top and trend change has taken place. I would not be surprised to
see a short-covering bounce on Wednesday as February might try to
consolidate some of its losses of the past three trading sessions
before attempting to move lower into the end of January. Momentum
indicators are bearish signaling that sideways to lower prices are
possible near-term.

March silver closed sharply lower on Monday and below the 62%
retracement level of November's rally crossing at 4.327. If the
decline continues, fib support crossing at 4.221 is March's next
targets. Momentum indicators are bearish signaling that sideways to
lower prices are possible during the last half of January. A short
covering rebound late in the day tempered some of today's loss
leaving the door open for additional short covering on Wednesday that
could lead to a test of broken support crossing at 4.327.

March copper closed higher due to technical short covering late in
the day. Early weakness spiked below minor support crossing at 69.50.
March copper remains locked in a downtrending channel that began
earlier this month. Closes above 72.40 or below 69.50 are needed to
breakout of this channel and clear up near-term direction in the
market. Momentum indicators are turning neutral to bearish warning
traders to use caution as downside risk is increasing in the market.

GRAINS http://quotes.ino.com/exchanges/?c=grains

March corn gapped down and closed lower on Monday amidst a lack of
fresh market supporting news. Today's export inspection report came
in at 31.374 million bushels, up 1% from last week but 9% below year
ago levels. Year to day shipments are running behind year ago levels
by 8.5%, which the main reason that corn prices have been unable to
sustain much strength this winter. Today's close below minor support
crossing at 2.10 1/4 is short-term bearish as the door is open for
another test of January's low at 2.07 3/4 later this month.
Short-term momentum indicators have turned neutral to bearish with
today's sell off signaling that sideways to lower prices are possible
into the end of January.

March wheat gapped down and closed lower on Monday triggered by
expectations that Argentina's wheat exports will begin to pickup
soon. Losses were exaggerated as sell stops were triggered below last
week's low. The breakout below initial trendline support last week
has set the stage for a test of December's uptrend line crossing near
2.92 later this week. Closes below December's uptrend line would open
the door for a possible retest of December's low crossing at 2.77
later this winter. Weak export demand continues to the driving factor
behind the sell off, which began last week. Stochastics and the RSI
are bearish signaling that sideways to lower prices are likely into
the end of January.

SOYBEAN COMPLEX http://quotes.ino.com/exchanges/?c=grains

March soybeans broke out below January's uptrend line on Tuesday
thereby confirming that last week's high marked a short-term top.
Improving chances for precip across portions of southern Brazil later
this week triggered aggressive selling by locals. Additional pressure
came from weakness in soybean meal. Today's low fell just short of
filling the January 10th gap at 4.37, March's next target. I am
looking for this support level to be tested on Wednesday but would
not be surprised to see a higher close tomorrow due to technically
related short covering. Longer-term, I am looking for sideways to
lower prices into the later part of January as most momentum
indicators turned bearish with today's sell off signaling that
sideways to lower prices are possible near-term.

March soybean meal closed sharply lower on Tuesday due to increased
chances for rain across portions of South America later this week.
Today's low fell short of filling the gap crossing at 154.80. I am
looking for this support level to be tested on Tuesday but would not
be surprised to see a higher close tomorrow due to light technical
short covering. Short-term momentum indicators have turned bearish
signaling that a sell off into the later part of January is possible.
Closes below initial gap support crossing at 154.80 would open the
door for a larger-degree decline and possible test of the January
10th gap crossing at 147.90 later this month.

LIVESTOCK http://quotes.ino.com/exchanges/?c=livestock

April hogs posted a huge key reversal down on Tuesday and closed
below the December-January uptrend line crossing near 60.80 thereby
confirming that a short-term top has likely been posted. Today's sell
off was triggered by profit taking amidst ideas that cash bids could
fade this week as packer margins are beginning to shrink. I would not
be surprised to see a short covering bounce on Tuesday on ideas that
today's sell off was overdone. However, it is unlikely that April
futures will exceed today's high ahead of Friday's monthly hogs and
pigs report. Today's sell off turned a number of momentum indicators
bearish thereby increasing the odds that we could see sideways to
lower prices near-term as futures and cash bids try to realign
themselves. If the setback off today's high continues, last fall's
uptrend line crossing near 57.50 is a potential target later this
month.

April cattle also posted a key reversal down on Tuesday. The market
gapped higher on the open following last Friday's friendly monthly
cattle on feed report. However, old concerns regarding seasonal beef
demand and futures stiff premium over cash bids returned soon after
April failed to extend its opening gains. Spillover pressure from the
sell off in the hog pit also weighed on prices. Today's high marks a
potential double top with last week's high however, closes below
trading range support crossing at 72.90 are needed before this can be
confirmed. Additional weakness on Tuesday is needed to confirm
today's bearish reversal pattern however, closes below last fall's
uptrend line crossing near 73.00 are needed to confirm that a
short-term top has been posted. Momentum indicators are bearish
signaling that sideways to lower prices are possible near- term.

FOOD & FIBER http://quotes.ino.com/exchanges/?c=food

March coffee gapped down and closed lower on Tuesday as fund selling
continues amidst near ideal weather in Brazil's coffee region.
Expectations for more aggressive selling by Mexico, Central America
and Vietnam are also weighing on prices. Momentum indicators are
bearish signaling that sideways to lower prices are likely into the
end of January. This sets the stage for a possible test of this
winter's low crossing at 44.75 later this month.

March cocoa closed higher on Tuesday and filled last Friday's gap at
1311 but fell short of testing last week's high at 1344. At the same
time, March remains below broken trendline support and gap resistance
crossing at 1355. Closes above 1355 or below 1260 are needed to clear
up near- term direction in the market. Momentum indicators are
bearish signaling that additional weakness is possible near- term.

March sugar posted an upside reversal on Tuesday due to technical
short covering after testing last fall's uptrend line crossing near
721. I would not be surprised to see follow-through short covering on
Wednesday following today's high-range close. Closes below last
fall's uptrend line would confirm a top and trend change has taken
place. Momentum indicators remain bearish signaling that sideways to
lower prices are still possible during the last half of January.

March cotton closed lower on Tuesday thereby confirming last Friday's
key reversal down. Today's close below January's uptrend line opens
the door for additional weakness into the end of the month. However,
I would not rule out a short covering bounce on Wednesday as March
might try to consolidate some of its losses of the past two weeks
before heading lower later this week. Stochastics and the RSI are
turning bearish with today's sell off thereby increasing the odds
that March cotton will trend sideways to lower into the end of the
month. Downside risk appears limited to trading range support
crossing at 34.91.

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I N O   N E W S
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Pacific Exchange To Trade Options on Principal Financial Group, Inc.
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NASD Dispute Resolution Has Record Year
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Amex Increases Position Limits For QQQ Options
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E X T R E M E   F U T U R E S
____________________________________________________________________________

Updated every 10 minutes around the clock.
More at http://quotes.ino.com/analysis/extremes/futures/

WINNERS

HUF3   New York Harbor Unleaded Gasoline Jan 20    0.5710    0.0446  +7.85
CLK3   Light Sweet Crude Oil May 2003              20.38      1.10  +5.47
LBH2   Random Length Lumber Mar 2002              272.70     10.00  +3.81
CCZ2   Cocoa Dec 2002                               1230        45  +3.80
SIZ3   Silver Dec 2003                             4.360     0.114  +2.60
SBH2   Sugar #11 World Mar 2002                     7.43      0.14  +1.92
HOK3   Heating Oil May 2003                       0.5556    0.0099  +1.80
OK2    Oats May 2002                             177 1/2     2 1/2  +1.43
XOK2   Oats May 2002                             177 1/2     2 1/2  +1.43
EJH2   Euro/Japanese Yen Mar 2002                 118.04      1.58  +1.36

LOSERS

AGF2   Silver 1,000 oz. Jan 2002                   4.030    -0.308  -7.10
NGG2   Henry Hub Natural Gas Feb 2002              2.106    -0.111  -4.96
PAH2   Palladium Mar 2002                         398.00    -16.85  -4.06
DBK2   Butter May 2002                           139.000    -5.000  -3.47
YIN2   Mini NY Silver Jul 2002                     4.320    -0.150  -3.36
NDM2   NASDAQ 100 Index Jun 2002                 1562.00    -50.00  -3.20
XHJ2   Lean Hogs Apr 2002                          59.70     -1.72  -2.80
QLG2   Central Appalachian Coal Feb 2002           28.00     -0.75  -2.68
LHJ2   Lean Hogs Apr 2002                         59.700    -1.625  -2.65
SMV2   Soybean Meal Oct 2002                       148.5      -3.2  -2.11

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E X T R E M E   S T O C K S
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Updated every 10 minutes around the clock.
More at http://quotes.ino.com/analysis/extremes/stocks/

WINNERS

BFR    BBVA BANCO FRANCES SA                        5.21      1.97  +55.49
AMZN   AMAZON.COM                                12.6000    2.4400  +24.02
CACH   CACHE, INC                                 6.6500    1.2200  +23.02
AGIL   AGILE SOFTWARE CORP                       15.2710    2.2900  +17.27
WLL    WILLAMETTE INDUSTRIES INC                   55.12      8.01  +17.01
NMSS   NMS COMMUNICATIONS CORPORATION             5.1600    0.7500  +16.67
RH     ROTTLUND CO                                  8.91      1.16  +14.97
ENMD   ENTREMED INC                               7.8300    1.0000  +14.71
PC     PEREZ COMPANC S.A.                          10.15      1.26  +14.21
GEG    GLOBAL POWER EQUIP GRP                      10.95      1.25  +12.82

LOSERS

CYBX   CYBERONICS INC                            12.8300  -16.4700  -56.37
KM-T   K MART FINANCING I 7.75% PFD                 5.27     -4.61  -46.66
OSUR   ORASURE TECHNOLOGIES INC                   7.0000   -3.3600  -32.46
EOT    EOTT ENERGY PARTNERS L.P.                   10.19     -4.86  -32.29
RHB    REHABCARE GROUP                             20.25     -5.06  -20.07
PCIS   PRECIS INC                                10.1500   -2.4500  -19.07
GY     GENCORP                                     11.50     -2.72  -19.03
NWRE   NEOWARE SYSTEMS                            5.5400   -1.2100  -17.79
BYBI   BACK YARD BURGERS                          6.7500   -1.3975  -17.47
DUSA   DUSA PHARMACEUTICALS                       5.6000   -1.1500  -16.43
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