This Action Spells R-e-c-o-v-e-r-y
In a day of light economic news, traders eyed a report from the National
Bureau of Economic Research that said the US was in a recession. Although
the recent market action in stocks indexes and bonds has discounted an
economic recovery in 2002, today’s action in T-bonds
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worked to confirm that the market is looking ahead to recovery — rather
than behind at the backward-looking recession data.Â
T-bonds
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around to close negative on the day, down 4/32 at 103 11/32. The past two
down days in bonds where they have been unable to hold early gains and then
closed on their lows is very negative.
10-year notes
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Implosion-5 List and while their action spells recovery for the economy, it
also writing-on-the-wall for lower prices bonds and notes.Â
The National Bureau of Economic Research defines a recession as “a
significant decline in activity spread across the economy, lasting more than
a few months, visible in industrial productions, employment, real income and
wholesale-retail trade. A recession begins just after the economy reaches a
peak of output and employment, and ends as the economy reaches its
trough.” The definition from the academics is considered more
encompassing than the most widely used definition of a recession as two
quarters of negative growth. Â
The “recession” halts a decade-long economic expansion, the
longest in US history.Â
Positive finishes in stock index futures also points to confidence that
the recession will be short-lived and recovery is at hand.
December Nasdaq 100 futures
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S&P futures
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1155.00.
December wheat
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in months, dragging corn and the bean complex down with it. Most of the
steep down move came in the opening five minutes when stops were hit below
the low of the post-11/16 consolidation. The outside bar down and lowest
close in a month is negative for wheat. Basis December closed down 12 at
277.
The situation in
January soybeans
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down stroke took out the past 10 days’ closes and also represents an outside
day down. Beans have also failed to close above the gap left from 10/12 and
slipped 10 to 441 1/4. The situation in corn
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to beans and wheat.Â
March cocoa
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List, lapped open and successfully tested the opening to make good on an Off The Blocks
long entry and trade to a new contract high. Cocoa gained 38 to close at
1305.
As pointed out in the Pre-Opening Energy
Futures Outlook for natural gas
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temperatures were simply bearish over the weekend and are basically
projected to be above normal in the near future.” Still, entry was
not available on the contract’s
Pullback
From Lows setup because of the lap-down opening. Natgas rallied off lows,
but 2.745 — an area that coincides with multiple intraday retracement
ratios and a retest of the Pullback From Lows Breakdown trigger –Â
would be an area to test the theory of additional downside in nat gas.Â