Full Metal Jacket
Gold and silver gave back two days of gains, sinking back to, or setting new
contract lows, as players shorted on signs the dollar could recover.
Revised gross domestic product figures showed the economy did not slow as
much as anticipated, a dollar-positive development. Gold often moves in
opposition to the dollar because the metal is priced in dollars and a higher
buck makes gold relatively more expensive. Gold fell back into a one-month
consolidation range, negating its Momentum-5 reading, for a loss of 3.4 to
266.4.
Jumping the gun by one day on a (1-2-3) pullback from lows setup, silver
plummeted to new contract lows. This morning’s Pre-Opening
Metals Outlook pointed out that “because silver doesn’t have the
short-covering threat (from an imbalance of short positions), it could be
limited by the weakness in the equity market and by overhead resistance of 473.“
Silver closed 8.3 lower at 461.5.
Nasdaq 100 futures
(
NDZ0 |
Quote |
Chart |
News |
PowerRating), from the Implosion-5 List,
touched down to new lows as well. The underlying Nasdaq 100 cash index traded
below 2556, the October 1999 pivot, to establish a 13-month low at
2520.14. The most expensive stocks on the Naz 100 fell the most, with Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating),
down as many as 16 points, leading the way. CIEN was recently priced at nearly
300 times its earnings and today’s 12-point decline threw it for a five-week,
50% loss.Â
Momentum-5
List component T-bonds
(
USZ0 |
Quote |
Chart |
News |
PowerRating) rallied out of their Pullback From Highs List
setup and on their highs of the day, for a close 8/32 higher to 101 25/32. The
weaker economy implies the Fed will lift their inflation-hawkish bias,
suggesting it could ease short-term interest rates sometime next year.Â
Economic observers were expecting higher industrial output from the Japanese
economy but were surprised when it rose only 1.5% in October vs. the anticipated
2.5%. The yen
(
JUZ0 |
Quote |
Chart |
News |
PowerRating) fell on a big engulfing bar to close just 11
ticks above its contract low-water mark, a loss of .0088 at .9023.
Juxtaposed to today’s revised US GDP which was not as weak in the last
quarter as expected, the economic-strength edge went to the US, benefiting the
dollar which inched out a .02 gain to 116.58. The
euro FX futures
(
ECZ0 |
Quote |
Chart |
News |
PowerRating) and
Swiss francÂ
(
SFZ0 |
Quote |
Chart |
News |
PowerRating) gapped sharply higher but sold off to
settle up 16 and 6 ticks, respectively. Â
Soymeal
(
SMF1 |
Quote |
Chart |
News |
PowerRating), the leading contract on the Momentum-5
List, gapped higher and poked out a new contract and multi-year record for a
gain of 2.1 to 188.7. The prospect of a Europe-wide ban on bone and bone meal as
an animal protein source–and the potential for soymeal to be used as a a
substitute feed–continues to underpin this market. Soybean oil
(
BOZF1 |
Quote |
Chart |
News |
PowerRating) fell on the prospect that excess demand for soymeal will cause a
glut in this crush product. Soybean oil fell .1200 to 14.6400, making good on
its Implosion-5 List
reading.