An Unprecedented Rally

  • April 30, 2001
  • Marc Dupee

Gasoline futures on the NY Mercantile exchange set a
milestone, rallying to their highest level since the contract began trading 17
years ago. Gasoline futures represent wholesale prices and have been rallying on
fears of shortages, especially of cleaner-burning grades that could fall in
short supply during the summer driving season that officially kicks off in
June. 

Major metropolitan areas such as Chicago and San
Francisco have imposed regulations that require drivers during the summer to
burn less-polluting reformulated grades of unleaded gasoline. With
multiple gasoline grades fragmenting the gasoline market, supply shortages are
more likely. The June contract
(
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been the leading contract on the Momentum-5
List for weeks and has mentioned as a potential runaway contract in Mid-Day
Futures Alerts and Futures Market Recaps. 

June unleaded gasoline
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rallied .0330 to a new contract high mark of 1.0790 before settling up .0140 at
1.0600. HUM1 opened and closed essentially at the same price — 1.0600 — in a
bar pattern associated with a change after a near-parabolic run. This does not
mean that the momentum in this contract will die tomorrow, but that a pause will
likely soon follow. 

June crude oil
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and heating oil’s
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momentum in the energy complex could be slowing. Crude gained .16 to 28.43 and
heating oil fell .0059 at .7350.

Now the leading contract
on the Implosion-5 List,
natural gas
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from the energy complex and fell for a sixth consecutive day, tagging a
four-month low. Nat gas also fell out of a four-month descending triangle.
Traditional measured-move analysis suggests this contract will test 3.860 now
that June gas has closed decisively below 5.000 on rising volume out of the
pattern. 

A broad rally in big-cap techs gave way to end-of-month
profit taking in stock index futures trading. Networking components JDS Uniphase
(
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in the session (with gains of 5% to 10%) to push the
Nasdaq 100 futures
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triggered a Pullback From Highs List
setup on their gap-up opening. The tech futures then left a double top before
descending 55 handles into a V-bottom tail that found low just one tick below an
intraday Fibonacci cluster identified by Carolyn Boroden in her S&Ps and
Nasdaq Futures Price Action levels subscription service. NDM1 closed up 43.50 at
1866.50. 

S&P futures
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and

Dow futures
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blue-chip equity index futures contracts were on the Momentum-5
List and made good on Off The Blocks
 entries. 

May wheat
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that this afternoon’s crop report could be bullish for hard red winter wheat.
Funds covered large short positions. Last Friday’s Commitment of Traders Report
(available through TradingMarkets Futures Indicators Page) showed heavy short
positions soybeans. Short covering helped fuel the rally in wheat and in July
soybeans
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June lean hogs
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second straight day and closed just off their lows, down 1.525 at 67.575.
Weakness in this contract has been suggested by recent
New 10-Day Low and Implosion-5
list readings. Bellies
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