Ready To Floor It?

  • April 11, 2001
  • Marc Dupee

Energy contracts came back from selloffs early in the
session, leaving long tails at highs in bar patterns associated with
(continuation) moves in the opposite direction of the tails (up). Oil and
derivative product futures soared as much as 7% yesterday, gave back gains in
profit-taking, but then did an about-face as yesterday’s huge volume still
loomed large. Today’s moves are consistent with the energies’ dominance of the Momentum-5
List, where all four major NYMERC contracts are represented and leave the
contracts primed to gas it to new multi-month highs.

Today’s gains came one day after April unleaded gasoline
(
HUK1 |
Quote |
Chart |
News |
PowerRating)
hit contract highs when traders focused on relatively low capacity
utilization figures at refineries and lower national stockpiles figures. A lower
capacity utilization and stockpiles situation was reminiscent of the situation
last summer where a supply squeeze sent retail gasoline to $2/gallon. 

Last night’s
American Petroleum Institute report suggested that there are
adequate supplies of crude oil — which stand 3.6% higher than one year ago — but gasoline
stocks remain down 5.7% from last year going into the heaviest driving season of
the year during summer vacations. Unleaded gasoline and heating oil came back
from early session losses despite an upturn in capacity utilization rates at refiners (up nearly 2% from
one week ago). Higher utilization rates and low unleaded stockpiles suggest
retailers may be hoarding supplies to avoid summer shortages and could point to
a meltdown once retail prices stop rising and as the driving season draws to a
close.

April crude oil
(
CLK1 |
Quote |
Chart |
News |
PowerRating)
closed down just .30 at 28.18, unleaded gasoline fell just .0010 to
1.0241 with today’s low remaining importantly above the 1.000 mark. Heating oil
(
HOK1 |
Quote |
Chart |
News |
PowerRating) came
back from the early sell off to hit a four-month high. 


Nasdaq 100 futures
(
NDM1 |
Quote |
Chart |
News |
PowerRating) rallied following an upgrade in the
semiconductor sector by influential Salomon Smith
Barney semis analyst, Jonathan Joseph. Many chip stocks rallied as much as 20%,
including Xilinx
(
XLNX |
Quote |
Chart |
News |
PowerRating), Applied Micro Circuits
(
AMCC |
Quote |
Chart |
News |
PowerRating), TriQuint Semiconductors
(
TQNT |
Quote |
Chart |
News |
PowerRating), and the semiconductor index
(
SOX |
Quote |
Chart |
News |
PowerRating) shot up as much as 14%. Naz
futures ended up 47.00 at 16.58.00. 

However, stock index futures bifurcated as retailers and
defensive blue-chip issues led the dive in Dow futures and the flat
performance of the Spooz. Dow futures
(
DJM1 |
Quote |
Chart |
News |
PowerRating) fell triple digits
before closing down 72.0 at 10,065.0 and the
(
SPM1 |
Quote |
Chart |
News |
PowerRating) added 1.20 to 1173.20.

June dollar index futures
(
DXM1 |
Quote |
Chart |
News |
PowerRating) gave back
bigger gains after rallying early out of their Pullback From
Highs setup to end .15 higher at 116.22.

In the grains, an easing of  tensions
between the US and China following the announcement of the release of US airmen
spurred a mild rebound after yesterday’s sharp down day. May soybeans
(
SK1 |
Quote |
Chart |
News |
PowerRating)
rallied 4 1/2 to 437 1/2 and wheat
(
WK1 |
Quote |
Chart |
News |
PowerRating) added 3 3/4 to 260
3/4.  

In softs and fibers,
May cotton
(
CTK1 |
Quote |
Chart |
News |
PowerRating) left an
engulfing (candlestick) bar out of its Pullback From Lows
setup, a downward continuation indication, closing .79 lower at 45.78. Cocoa
(
CCK1 |
Quote |
Chart |
News |
PowerRating)
sprang back after retesting the 950 area in an up-engulfing bar, suggesting a
test of the 1085 swing high. And coffee
(
KCK1 |
Quote |
Chart |
News |
PowerRating), an Implosion-5 List
market, closed unchanged but just off its recent multi-year lows. Notice that
the volatility compression evidenced by this contract’s 6/100 Low Volatility
reading primes coffee to soon make a larger-than-normal move.

Talk
about it at TradingMarkets World

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