Court Lowers Gavel On Index Futures
Stocks index futures dropped in tandem with the gavel of the Florida
State Supreme Court after jurists unanimously decided to permit the
inclusion of hand-counted votes in three key Democratic counties. The votes could
affect the outcome of the closely contested state and national presidential election results. The
court ruling prolongs the indecision of who the victor will be in the race for
the nation’s
highest office. The uncertainty sent index futures reeling.
Nasdaq 100 futures
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PowerRating), from the Momentum-5
and Pullback From Lows
lists, hit limit down levels and failed to sustain rallies inspired by event-driven news throughout
the day.Â
New futures analyst Carolyn Boroden made excellent observations in her
debut columns Monday and Tuesday. In Tuesday’s Futures
Perspectives, Carolyn nailed the top of the S&Ps
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Wednesday we fell more more
than 30 handles from the 1462.50 level and more than 25 from Wednesday’s highs.Â
Here is Boroden’s
Spooz analysis: “December S&P futures (SPZ0)
hit an important price-decision zone late in Tuesday’s session at the 1361.00-1363.50
area. (Note the session high was made at 1362.50.) We are now considering this
a pivotal high. If price continues to remain below here, we are likely to see
new contract lows sooner rather than later.”Â
Also
notice that Borsellino’s
S&Ps A.M. piece was prescient. Lewis commented that, “If we get
below 1335, the odds are strong for a move to 1328, and more probable will be a
test of the Oct. 18 recent contract low of 1324.80.” The 1335 level
indeed provided support and the closed below the downside objective at
1322.50.Â
Safe-haven buying of T-bond futures
took the Dec.
contract to new highs, and up more than 1 point in Wednesday’s session to a
close 1 2/32 higher to 101 26/32. The
belief that whoever wins the presidential election will experience government
gridlock, will not be able to increase tax spending, and won’t disrupt the
repayment of governmental debt also worked to kick T-bonds to a contract
record.Â
In Monday’s Futures
Perspectives, Boroden wrote that if T-bond futures
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above the key 100 7/32-area, bonds could move “toward 101
02/32, 101 09/32 and even 102 05/32
on the upside.” Â
The gold and silver index
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session in equity markets Wednesday as market participants ran for safe-haven
stocks. However, the price of gold itself barely budged. The December gold futures contract
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PowerRating) is trading in a two-week consolidation range at a one-year low. The
contract remains potentially explosive as it wound up on the Volatility
Explosion Low 10/100 Reading. Futures contracts that post on this list are
poised to make a big move as the low volatility reverts back to its longer-term
average volatility. Dec. gold closed up .6 at 266.7, and the rally in
the XAU could be a precursor to a move in gold.Â
In the past two Futures
Market Recaps, I have pointed out that weakness in foreign currencies implied that
December dollar index futures
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PowerRating) could rally. The
December dollar index futures
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PowerRating) had been registering on the
New 10-Day High and
6/100 Low Volatility
List, implying a larger-than-normal move was in store. The dollar has also
been making headway despite a bear stock market and an indeterminate US
Presidential election. The dollar index registered on the Momentum-5
List, but finished down just .09 at 117.80, despite extreme stock market
bearishness.Â