Cold Turkey

  • November 20, 2000
  • Marc Dupee

Lower-than-normal temperatures forecasts for the Thanksgiving holiday in the
Northeast and unusually low inventories are spurring spikes in energy contracts
led by heating fuels. Dec. heating oil
(
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PowerRating) is
the leading contract on the Momentum-5
List and is matching a contract high. The January heating oil contract is
trading at a 20-year high. 

Natural gas
(
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PowerRating) and January crude oil
(
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PowerRating), also Momentum-5 leaders, are also up sharply and trading on their
highs of the session. 

  

Soymeal (SMZ0)
jolted higher after the European Parliament and the Italian government said they
favored banning the use of bone and meat meal as animal feed (due to a mad cow
scare). Soymeal is a high protein substitute. Soymeal set up in a two-month,
upper-level base and left an expansion bar Friday. The futures shows plenty of gaps and laps,
contract also left lots of gaps, laps and wide-range bars, identifying it as a possible runaway market. This setup was pointed out
in Friday’s
Futures Market Recap and Futures Market Trading Outlook.

Here is Friday’s chart:

The Japanese yen
(
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PowerRating) is trading at a contract low. The December Japanese yen
(
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PowerRating) hit a
New 10-Day Low (from the Futures Indicators Page) Thursday and traded in a narrow range on lows. Japan is experiencing a governmental crises
of confidence where Prime Minister Yoshiro Mori will be subject to a parliamentary
vote and possible ousting. As in America, uncertainty in the highest office
tends to hurt the national market and the currency underlying it. The Japanese
economy is also burdened by ballooning debt that the ruling Liberal Democratic
Party has spent on pork construction projects in an effort to revive a moribund
economy. The diffusion index, an indicator of Japanese economic activity, has
declined for the past three months and public confidence (similar to consumer
confidence) is waning. The yen is off .0075 at .9156 and provided entry after a
gap-down open. 

Stock index futures have continued trading lower out of their Pullback From Lows
setup following a downgrade of the networking group and the loss of an Oracle
CEO.
NASDAQ 100 futures
(
NDZ0 |
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PowerRating) have fallen through one limit down level but are
recovering from lows.