Right-Wing Rally
The victory of Ariel Sharon as prime
minister in Israel raised tensions and the threat of violence in the Middle
East. Traders snapped up energy futures on the prospect that any conflict in the
region will cause prices to spike. Oil prices spiked above $35 a barrel last
fall after the right-wing former army general visited a holy site in Jerusalem,
sacred to Muslims and Jews, igniting a round of violence.
Sharon is strongly disliked–if not
hated–among Arabs for spearheading Israel’s 1982 invasion of Lebanon, for
allowing the death of over 1,000 Palestinian refugees in Lebanon in 1982, and
for permitting ever-greater numbers of Israelis to settlement in the West Bank.
Unleaded gasoline
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traded at a two-month high before exploding to close at its highest level since
Sharon’s aforementioned visit to the Jerusalem holy site, Temple Mount. The
March contract’s standing on the Momentum-5
List and price persistency on the highs–higher closes after the Feb. 2
expansion bar–were constructive developments and mentioned in today’s Mid-Day
futures Alert.Â
From the Momentum-5
List, crude oil
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surged and added .92 to close at 31.27 and closed at a two-month high.Â
Natural gas
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rallied early on the latest speculation about weather fronts in the
heavy-consuming Midwest, and then exploded for a total gain of 8%, or .471 to
6.235 after the American Gas Association (AGA) showed a larger-than-expected
draw from inventories. Nat gas also made good on its Turtle Soup Plus One Buy
signal.
Stock index futures gyrated on poor earnings news from
Cisco and a shooting at the White House. Carolyn Boroden’s intraday subscription
service proved prescient in the S&P futures
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clicking in less than one-half handle from the 1340.00 low. Later updates then
identified a swing range that the market remained contained within for the rest
of the session. The S&P futures finished the session down 6.80 at 1349.50. (Click
here to learn more about Boroden’s intraday stock index futures Fibonacci
service).
After a triple-digit tumble, Microsoft
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on strong to lead the Nasdaq 100
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TradersWire Java applet issued a new two-month high alert on the stock.
Microsoft is the most heavily weighted stock on the NDX with a weighting of 7%.
The
Nasdaq 100 futures
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The March Japanese yen
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that business confidence in that country declined for the first time in 11
quarters. Currency traders also looked ahead to tomorrow’s release of revised Q3 GDP
figures and calculated that (expected) lower figures will show that the Japanese
economy is headed for a recession–two consecutive quarters of flat or negative
growth. Initial GDP reports for Q3 were for a slim .2% expansion but the revised
figures are forecast to show a contraction. After gapping lower, the yen
established a 30-tick range and closed on the bottom or its range, down .0112 at
.8653.
After tracing a near-classic
parabolic arch, March cocoa
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Sell sell trigger and continued descending, presenting an opportunity to
short a a classically overbought market.
The contract sold off in part due to news that a strike at Ivory Coast ports,
the largest exporter of cocoa, will not have as great of an impact as feared.
Cocoa closed 42 lower at 1044.