Behind The 10% Rally

  • July 25, 2001
  • Marc Dupee

Natural gas
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soared, adding as much as 10% on the session after the weekly report from the
American Gas Association, released 90 minutes prior to today’s close, showed
lower-than-expected inventories. Comments from OPEC that it would cut output
sparked rallies across the board in energies and helped give nat gas its early
lift. 

Following three days of
volatility compression at a year-to-date contract low, gas exploded after the
release of the AGA report. Note that in its uphill trajectory, gas triggered a
Turtle Soup Plus One Buy signal issued for last Friday. September natural gas
gained .298 to close at 3.295.

Citing its intention to
boost sagging oil prices, OPEC said it will soon cut production by 1 million
barrels a day. September crude oil
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fourth consecutive day, finishing up .53 at 26.84.

Unleaded gasoline
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lapped above a five-day range to leave an island reversal and double bottom. The
pattern suggests a potential test to the mid-June highs. Unleaded finished with
a gain of .0248 to .7484.

Stock index futures
rallied into the close out of an intraday cup-and-handle pattern identified by
an astute member of TradersWire Interactive. At the same time in the chat room,
David Floyd was feeding information received directly from the floor of the
S&Ps, noting that Morgan Stanley was a big buyer of spooz on the breakout of
the pattern, covering shorts for a large buyer. S&P futures
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tacked on 13.20 to 1191.50,
Nasdaq 100 futures
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Dow futures
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The leading contract on the Implosion-5 List,
September copper
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to new contract lows on the open, retraced to fill the gap and test yesterday’s
closing range, tested bottom support again before arching up to finish for a
mild close, up .20 at 98.75. Higher stockpiles of the
metal in London warehouses pressured copper overnight. Traders will also closely
watch Friday’s GDP report. Economic growth is closely correlated
with copper prices, and the drive lower in copper has been due in part to
evidence that we are in a “manufacturing” recession. 

August pork bellies
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potential signs of a runaway market, having logged a critical mass — more than
five in 21 days –  of thrusts, gaps or laps. Last week, bellies had
back-to-back limit-up days. As mentioned in last night’s Futures Market Recap,
bellies could be in an expansive phase if the latest dip was a “wave
two” dip in a five-wave Elliot wave move. Bellies are on the Momentum-5
List for a second day and closed at a contract high, up 2.825 at 96.425.

Also from the Momentum-5
List,
euro FX futures
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Swiss francs
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 entries. ECU1 gained .00520 to .87930, and Swiss francs gained .0017 to
.5836.

A surprise up-tick in last night’s weekly American Petroleum
Report (API) is resulting in higher oil prices. Crude is also stronger on OPEC’s
statement that it will cut back daily output by one million barrels a day. September crude oil
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is currently in an intraday pullback and consolidating in a narrow range just
off the session highs. 

November soybeans
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retracement of their recent run and tacked on another 9 1/4 to 504 1/4. As
mentioned in recent Futures Market Recaps, beans could also see higher highs if,
in this case, wave five of a five-wave Elliot Wave pattern plays out.