Buck Bulls Wait In The Jury Box
Dollar index futures made headway against the euro and
Swiss franc after a business sentiment survey out of Germany came in weaker than
expected. Persistent political uncertainty in Japan that has hurt the yen was
also dollar supportive.Â
In Monday’s Futures
Market Recap, I pointed out that weakness in foreign currencies implied that
December dollar index futures
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registered on the
New 10-Day High and
6/100 Low Volatility
List, implying a larger-than-normal move was in store, and had that the buck
had continued making headway despite a bear stock market and an indeterminate US
Presidential election. Currency traders may be positioning for a dollar rally
once a Florida court helps determine the outcome of the presidential election.
The dollar historically rallies 5% after presidential elections. The DXZ0 closed
up .66 at 117.89, making its seventh day of higher highs in an outside bar to a
New 10-Day High, a very strong pattern.
Newcomer to the Implosion-5 List,
the Japanese yen
(
JYZ0 |
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PowerRating) contributing to dollar strength by tagging a new
contract low and ending down .0025 at .9117. The Swiss franc
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and euro FX
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ECZ0 |
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Tuesday, falling .0023 and .00610, respectively.Â
The
British pound
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change in the current downtrend. The currency futures also laid a Turtle Soup
Plus One buy signal for Wednesday, so monitor this one for a possible reversal
and move higher. BPZ closed down .0056 at 1.4182.
In stock index trading, the futures closed mixed as
traders range-traded as the State Supreme Court worked to mete out a decision on
the presidential vote recount in Florida. NASDAQ 100 futures
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NDZ0 |
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provided intraday opportunities to get short in setups similar to the Turtle
Soup Plus One sells where 20-period (intraday five-minute bars) highs acted as
resistance and false spikey breakouts resulted in sell-offs. NDZ closed 7.00
lower at 2807.50.
December S&P futures
(
SPZ0 |
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Dow futures
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DJZ0 |
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A cold Thanksgiving forecast for the Northeast, strong
demand in the West, and rising tensions in the Middle East underpinned natural
gas prices and have propelled the December contract
(
NGZ0 |
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PowerRating) to a new
all-time high, up .161 to 6.410. Natural gas prices continue to be one of
leading contracts on the Momentum-5
List.Â
Contract highs in the December heating oil contract
(also from the Momentum-5) and a 21-year high basis January
(
HOF1 |
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fanned the fire under natural gas as stockpiles in nat gas and heating oil
remain significantly below last year’s levels and users compete for the
substitute heating fuel products. Demand for electrical generation remains high
in Western states. Fresh rounds of violence in Israel continue to support the
energy complex too. Crude oil
(
CLF1 |
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PowerRating) closed just below Monday’s record
contract close, down .07 at 35.15. Traders will closely watch Tuesday’s API and
Wednesday’s AGA for a better picture of oils and gas inventories.Â
In the grains, both
January soybeans
(
SF1 |
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SMZ0 |
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after registering Turtle Soup Plus One
Sell signals. Soybeans, and soymeal in particular, have a bullish
fundamental story behind them. The European Union and Italy voted to at least
partially ban the use of bone meal as an animal feed to mitigate the spread of
mad cow disease. Beans slipped three cents before settling down 1 3/4 at 489.
Meal closed 2.9 lower at 177.0.
Carolyn Boroden
pinpointed the top of this most recent swing-rally in beans in her debut Futures
Perspectives commentary, writing that there was a “strong
coincidence of price relationships coming in between 494 3/4 and 499
1/4“ and that a “test and failure to get through either of
these zones gets us to consider exiting any current long positions and also to
consider some sales with the risk defined just above the top of the ‘cluster
zone.'”
In the softs, March 2001
coffee
(
KCH1 |
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PowerRating) set new seven-year lows, making good on its Implosion-5 List
reading and downtrend (see the
Futures
Trend Matrix) for a close 1.95 lower at 73.25.
From the Pullback From Highs List, orange
juice
(
OJH1 |
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PowerRating) closed on its high tick and near the top of a recent
consolidation in a very constructive pattern, up 1.05 at 75.85. Look for a break
above a defined triangle and continuation of a nascent uptrend.
