What Happens After The Storm
Tankers got busy unloading oil again at one of the largest offshore transferring
facilities in the US in the Gulf of Mexico off Louisana. Tropical storm Allison
had prevented ships from unloading, potentially skewing last week’s API
inventory report. In the calm after the storm, tankers were busy refilling reservoirs
and traders sold energies ahead of tomorrow’s report on the expectation that it
will show a build up in stock piles of crude and distillates.Â
Unleaded gasoline
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Implosion-5 List,
gave the most glaring indication of potential weakness in the energies and slid
.0214 to .8515. But July crude’s
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bigger picture head and shoulders top was also indicative of a breakdown.
Today’s gapping action in crude and in heating oil
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also suggestive of a breakdown. Crude closed .96 lower at 27.55 and heating oil
closed down .0335 at .7710.
Stock index futures showed an unusual bias today.
Any one signal on the
Market
Bias Indicators Page can provide an edge. Three signals from the page
pointing the same way indicate a particularly strong collective directional bias. Today we
had a rare six market bias indicator signals pointing up, giving a
stronger-than-normal suggestion that stock index futures could move
higher. Stock index futures closed narrowly mixed. But the collection of
up-pointing market bias indicators are good for tomorrow so be prepared for
short-term counter rallies as the indexes resist succumbing to their own head
and shoulder top patterns.Â
September dollar index futures
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Highs setup. Inflation in the dozen-nation Euro-bloc rose at its fastest
pace in two years, limiting the maneuvering room of the European Central Bank to
aggressively cut rates. Also, Japan’s central bank, the Bank of Japan, fired a
warning shot
across the yen’s figurative bow by saying that it expects the second quarter’s
economic performance to be worse than Q1 of 2001. The statements signaled that Japan’s most
cognizant financial institution believes the economy will lapse into its fourth
recession (two consecutive quarters of negative growth) in 11 years. This
creates a negative bias in both of the currencies most heavily weighted on the
dollar index, giving the DX an a positive tilt. The DXU1 closed .15 higher at
118.71.
Federal funds futures
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50-basis point rate cut for the Fed’s FOMC meeting next week before finishing
lower. This means the market believes that a 25 basis point cut is a sure thing.
Â
July wheat
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Jim pattern on its low but broke out of the narrow consolidation to make good on
a Turtle Soup Plus Two setup (a reversal that takes place on the day
following the Turtle Soup Plus One signal) to close up 7 at 262 3/4.
Cotton
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its Turtle Soup Plus One Buy
trigger, obeying its bigger picture downtrend to close down .48 at 38.91.