A Double Header
Economic reports came in weak for a second day,
jolting bonds to a contract record. Stock indexes shook off the bad a slate
of weak economic news in a show of strength.
Yesterday’s Federal Reserve anecdotal survey of
regional economic conditions, the Beige Book, came in negative and traders
bid up T-bonds
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Today’s multi-whammy of a five-year low in durable goods orders, a 10-year
high in weekly jobless claims, and an 11% plunge in sales of existing homes,
all reinforced what many have predicted would occur in the aftermath of the
9/11 strikes: a slumping economy. Bets are on that the Fed will cut 50 to 2%
by year’s end, and the fed funds futures contract
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much as an 84% chance of that event occurring by Christmas. The rising
unemployment rolls are taking the focus off inflation — for now.
As pointed out in recent installments of the Nightly
Futures Report, T-bonds were bullish (rather than influenced by their
double tops) above the 106 21/32 — 24/32 level and surpassed that area
yesterday. That action put T-bonds onto the Momentum-5
List, making them eligible for an Off The Blocks
entry, which they made good on, finishing up 15/32 at 107 18/32.
Despite the barrage of poor economic today, December Nasdaq 100 futures
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erased a nearly 50-point loss and turned that into a 50-point gain before
settling solidly higher. Strength in the semis worked to propel the broad
market and other index futures. One of the strongest things a market can do
is continue to rally on bad news.
November soybeans
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they will come off their double bottom and retrace into the 10/12 gap.
A target (and resistance) resides at 444. Beans added 3 3/4 to 428
1/4.
Making good on a Turtle Soup Plus One Buy signal for
a third straight day, soy meal
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10/12 gap, closing up 3.1 at 161.3. Notice that meal was primed for a
larger-than-normal move after registering on the Multiple Days Low
Volatility List.
December wheat
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bar, traveling over a 10 cent range, to close at the top of a handle in a
cup-and-handle pattern. There is not much resistance above.