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Separating The Wheat From The Chaff

  • November 26, 2001
  • Marc Dupee

December wheat
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days in months, dragging corn and the bean complex down with it. Still,
wheat’s expansion bar from 11/16, gives the contract an upside slant.
Today’s steep down move, which came in the opening five minutes when stops
were hit below the low of the post-11/16 consolidation, will need to close
below 274 to remove the positive tilt in wheat. 

The situation in
January soybeans
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stroke took out the past 10 days’ closes and represents an outside day down
that never closed (closed above) the gap left from 10/12. The situation in corn

(
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March cocoa
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PowerRating), the leader on the Momentum-5
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. 

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 is rallying off
lows, but 2.745 — an area that coincides with multiple intraday retracement
ratios and a retest of the Pullback From Lows Breakdown trigger – 
would be an area to test the theory of additional downside in nat gas. 

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 market has widely expected such a proclamation and economic result,
there has been about a one-point pop on the statement from the institute,
considered the leading authority on such matters. The traditional measure of
recession has been “two quarters of zero or negative economic GDP
growth.” The National Bureau of Economic Research’s is broader,
defining 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 “recession” halts a decade-long economic expansion, the
longest in US history. T-bonds
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gains, and are up 18/32 at 104 11/32.