A Penny In The Pudding

  • May 7, 2001
  • Marc Dupee

Futures Editor Marc Dupée will be writing the
Futures Outlook while Dave Landry is away. Dave returns Wednesday.


July copper
(
HGN1 |
Quote |
Chart |
News |
PowerRating) is
pulling back from a five-week high. Notice the huge volume when the contract
first hit the high. This kind of volume is not just month-switching and usually
expresses heavy buyers’ interest. With home builders breaking out (e.g. Beazer
Homes
(
BZH |
Quote |
Chart |
News |
PowerRating)), interest rates falling (the July fed funds
(
FFN1 |
Quote |
Chart |
News |
PowerRating) is
implying a 60% chance of a 75-point cut by July),  lumber
(
LBN1 |
Quote |
Chart |
News |
PowerRating)
trading at contract highs, and construction indexes (
(
DJTCNS |
Quote |
Chart |
News |
PowerRating),
(
DJUSHB |
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Chart |
News |
PowerRating),
and
(
DJUSHV |
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News |
PowerRating)) recently broken out to new highs, look for copper to
continue what could be a nascent rally. Today’s narrow-range bar could be used
as a trigger in a Pullback setup here with today’s low used as a stop.


British pounds
(
BPM1 |
Quote |
Chart |
News |
PowerRating) pulled back from an 18-day high, but appear to
be tracing an ascending triangle off the test (4/18) of the April 2 low. Prior
to today’s pullback from a
New 10-Day High, the contract had made four higher highs and higher lows.
The Brits are likely to follow through with an expected 25-basis-point cut in
short-term interest rates. In the wake of the hoof-and-mouth epidemic and its
negative impact on tourism (another large industry), traders will likely focus
on the economic impact of the cut rather than the relatively lower-interest-rate
differential vis-à-vis Europe or the US. Since this contract is not set up in a
Pullback From Highs setup but could, instead, be in the early stage of a
momentum phase (as evidenced by its New 10-Day High reading), consider entering
on an Off The Blocks
 setup. 

Also in the currencies, Canadian dollars
(
CDM1 |
Quote |
Chart |
News |
PowerRating)of the past
month’s (upside) momentum. 

July wheat
(
WN1 |
Quote |
Chart |
News |
PowerRating) has sold off for
four straight days and is now setup in a Turtle Soup Plus One Buy
 pattern. The 267 area is the previous 20-day low in this contract and the
trigger. 

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