A Stampede To The Exits
Led down by weakness in the cash market, the four major nearby meat contracts all closed down their daily
limit.
December
live cattle
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yesterday, a sign of weakness. Jan. ’02 feeder cattle
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Implosion-5 List. Live cattle are also a member of the list. Both
contracts were eligible for an Off The Blocks
short and made good on the entry setup closing down 1.500 each.
December lean hogs
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trade lower due to support in the 51.650 area in last night’s Futures
Market Report fell 2.000, the daily limit. February 2002 pork bellies
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also locked down, a loss of 3.000.
Stock index futures came back from a down start and
made higher lows throughout the session to close at breakeven to slightly
higher and near the high of intraday ascending triangles, a constructive
signal. The down start which found support 12 handles below yesterday’s
close was suggested by the six down arrows from TradingMarkets.com’s
proprietary Market
Bias Indicators Page, your early indication of a possible morning sell-off.
Dow futures
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the equities leadership mantle. Blue chip stocks generally outperform when
interest rates drop. This week, the Fed, the European Central Bank and
the Bank of England all cut rates a half-point. Money wants to move out of
negative real return (after taxes and inflation) Treasuries into the hot
gains of equities. But the most speculative sectors, biotech, networkers,
Internets and semis, have all outpaced the major indices. Blue chips could
play catch-up here as tech backs-and-fills.
Chile’s Codelco, one of four major global copper
concerns, is slated to cut back production.
December
copper
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to 64.10 and closed well above a prominent down trendline.
January soybeans
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to thrash around the handle of their low-level cup-and-handle pattern. Beans
reversed again within the down-up, range-bound handle for a gain of 6 3/4 to
close at 444 1/2. But the subtly higher lows and higher highs suggests
beans will crack resistance and move more significantly into the overhead
gap.
Energies are up in volatile trade and filled the
10/31 gap. It is difficult to chase a gapping market, but traders who waited
until December crude oil
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retraced 50% of the of Thursday’s low to Friday’s high could have been
rewarded with as much as an 85-cent-a-barrel gain. Crude closed near its
session high, up 1.05 at 22.22.
The energy market is responding to OPEC’s threat to
cut output more substantially than previously stated. Word from Russia
that it will change its stance and cut oil output in an attempt to
collude with OPEC to jack-up prices also supported energies. Russia’s
position represents a shift in the view of the market. Non-OPEC nations had
earlier stated they would continue with the same output, and grab market
share, despite OPEC pleas to limit global supply to drive prices
higher.
In a third explosive up day,
December cocoa
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up another 5%, or $55 a ton, at 1154. This contract whipsawed around the
opening range on the open but held at the 38.2% retracement of yesterday’s
close to the morning high for a pullback entry. This is cocoa’s highest
weekly close since February. Be cautious of the gaps that lurk beneath. This
is cocoa’s biggest week of a the year and it sets up a weekly Turtle Soup
Plus One Sell reversal.