Crises Of Confidence Diverted

  • October 31, 2000
  • Marc Dupee

Buyers are jumping back into tech futures in force, propelling Nasdaq 100
futures
(
NDZ0 |
Quote |
Chart |
News |
PowerRating) up more than 5%. Many of the best performing growth tech
names from the NDZ were back in force, including JDS Uniphase
(
JDSU |
Quote |
Chart |
News |
PowerRating), SDL
(
SDLI |
Quote |
Chart |
News |
PowerRating), Veritas
(
VRTS |
Quote |
Chart |
News |
PowerRating)
and Xilinx
(
XLNX |
Quote |
Chart |
News |
PowerRating), stocks trading between 7% and 12.5% higher Tuesday. NDZ
futures traded higher with little pulling back in the first hour of trading,
adding nearly 190 handles before pulling back after a retouch of its 20-day
moving average. The futures are now consolidating on their highs. 

More evidence of economic slowing–including a consumer
confidence rating coming in at a one-year low–is working to boost the view that
the Fed is done with its interest-rate raising campaign. Positive earnings and a
rosey sales forecast by French telecom Alcatel (ALA) is perhaps an even bigger
positive factor Tuesday because it is enhancing the prospect for better sales of
companies that will supply it, companies like the above mentioned XLNX, SDLI
and JDSU. A slower National Association of Purchasing Management-Chicago reading
is also helping the slower interest rate view.

T-bonds
(
USZ0 |
Quote |
Chart |
News |
PowerRating), from the Momentum-5
List, are up slightly on the economic news. Slower economic growth takes the
Fed off its vigil against inflation and lowers the chance of rate hikes. 

December  dollar index futures
(
DXZ0 |
Quote |
Chart |
News |
PowerRating) are not confirming the rally in
tech. Dollars did come back from a dip on the large rally in blue chips Monday,
so their action may act as an indicator confirming movement in US equities. The
apparent slowdown in the US economy, and evidence that the European Central Bank
may raise interest rates to cool higher wholesale inflation (40% of European
countries reported their PPI equivalent was an average 1% higher on Tuesday) are
also boosting
euro FX
(
ECZ0 |
Quote |
Chart |
News |
PowerRating) futures at the expense of the dollar. ECZ is trading on
their highs of the session, currently up .00490 at .84920.

Orange juice
(
OJX0 |
Quote |
Chart |
News |
PowerRating), from the Implosion-5 List,
is trading at the bottom of its range and at a multi-month low. Look for this
contract to continue declining. 

Forecasts for mild temperatures across the central and
eastern parts of the United States, areas that are the largest consumers of
natural gas as a heating fuel, are sending the December contract for its eighth
consecutive loss. NGZ0 is also on the Implosion-5 List.