Euro-Bailout?
One of the reasons traders have been selling the euro
with impunity down to all-time lows is a seeming lack of willingness by European
technocrats to defend the currency. Euro FX futures
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PowerRating) rallied sharply,
gaining as many as .00890 to fill the opening gap at Monday’s close in response
to European Central Bank President Wim Duisenberg’s comments that the drop in
the euro was “clearly a cause for concern.” He left the impression
that the ECB may intervene to defend the currency. Swiss francs
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PowerRating) also
rose as many as .0055 to .5697 and tipped the hand of the euro-block
currencies by diverging from the Euro FX in trading Monday–closing
positively–a development mentioned in the Futures
Market Recap.
However, the ECB has never intervened
to support the euro, despite having beefed up exchange reserves to 100 billion
euros in recent months. Euro FX, Swiss francs and British pounds
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PowerRating),
all from the Implosion-5 List,
are pulling back and trading once again at break-even levels near either all-time or multi-year lows.
NASDAQ 100 futures
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PowerRating) registered a Turtle Soup Plus One Buy
signal, indicating they could rally back from a week-long descent. The
previous 20-day low is acting as support as that is the high tick of the
session.
Tropical rains have hit parched areas of Texas and the
Mississippi delta, improving a poor crop outlook for cotton, down .88 at 65.60.
Energies are pulling back from 10-year highs, as traders take profits after run-ups Monday of up to 5% in response to OPEC’s (inadequate) decision to raise production by 800,000 barrels a day. Energies are also selling off in response to President Clinton’s comments that his administration is working hard to make sure that “home heating reserves are filled for the Northeast by the end of October.” Will Bill follow through?