Behind The 15-Year Low

  • June 6, 2001
  • Marc Dupee

Like the Emperor without any clothes on, the British pound
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with it. But why? 

Here’s the reasoning. Tony Blair’s Labour Party is
expected to win tomorrow’s election in a landslide. And Sir Tony wants
to join the EC. This ups the odds that a referendum to go before the British
people by 2002 on joining the euro single-currency block will pass. 

With European countries deemed behind the curve in terms
of slowing economies — their economies are expected to lag behind the US and experience
turmoil when the actual euro currency is rolled out across the continent in six
months — the euro currency was pressured to a year-to-date low close two days
ago. Traders believe joining the euro currency bloc is like getting on board a
sinking ship and sold the pound in response. 

The June pound
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registering on the
New 10-Day Low List. “Cable” futures closed .0198 lower at 1.3906
and made good on an Off The Blocks
 setup. 

After just a two-day
pullback from low,
euro FX futures
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lows and were magnetized by, but did not retouch, downtrend channels lines. Both contracts have been on the Implosion-5 List
since May 23 and made good on Off The Blocks
 setups below yesterday’s last-hour lows. Euro FX fell .00450 to .84780
and Swiss francs slipped .0039 to .5582.

Going the other way in contra-step to continental
currency futures, June dollar index futures
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List reading as they rallied to a new contract record, ending up .64 at
119.42.

Stock index futures fell as equity traders took money off
the table after four consecutive up days and ahead of Intel’s unusual
mid-quarter performance conference call.

Nasdaq 100 futures
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S&P futures
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Dow futures
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Unleaded gasoline
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logged some of the best gains in the commodities world this year, but now is 15%
off its contract highs and has retraced nearly 50% of its run-up since December.
The contract has been giving clues that its up-side run had terminated and to
look for shorting opportunities. On May 31, unleaded registered on the New
10-Day Lows List and closed below its 50-day moving average. And for the past
two days, the contract has been on the Implosion-5 List
after closing at a one-month low on June 4. July unleaded continued its
descent today, falling .0250 to .8804.

With the potential uncertainty of yesterday’s OPEC
meeting out of the way (oil ministers did the expected and left output quotas at
current levels), traders remained focused on inventory data showing rising
stockpiles of gasoline, crude oil, and distillates. The trade association
American Petroleum Institute reported inventories rose after last night’s
close. 

The report triggered July crude oil’s
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Pullback From Lows
setup, leaving it at its lowest close in a month, down .52 to
27.72.   

From the Implosion-5 List,
natural gas
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consolidating losses and continuing to make good on a Pullback From Lows
setup after yesterday’s big outside bar down on
contract-record volume. Gas fell to within striking distance of a same-day
Turtle Soup setup tomorrow, closing down .091 to 3.801.