Economic Meltdown

• July 25, 2001
• Marc Dupee

The leading contract on the Momentum-5
List,
September copper
(
HGU1 |
Quote |
Chart |
News |
PowerRating), gapped
to new contract lows on the open, retraced to fill the gap and test yesterday’s
closing range and is back down, challenging new lows. Higher stockpiles of the
metal in London warehouses pressured copper overnight and the metal is selling
off ahead of this Friday’s GDP report. Economic growth is closely correlated
with copper prices, and the drive lower is in part speculation that overall
economic growth may show a dip, better reflecting that we are in a
“manufacturing” recession. 

August pork bellies
(
PBQ1 |
Quote |
Chart |
News |
PowerRating) are showing
potential signs of a runaway market, having logged a critical mass — more than
five in 21 days –  of thrusts, gaps or laps. Last week bellies had
back-to-back limit-up days. As mentioned in last night’s Futures Market Recap,
bellies could be in an expansive phase if the latest dip was a “wave
two” dip in a five-wave Elliot wave move. Bellies are on the Momentum-5
List for a second day. 

Also from the Momentum-5
List,
euro FX futures
(
ECU1 |
Quote |
Chart |
News |
PowerRating) and

Swiss francs
(
SFU1 |
Quote |
Chart |
News |
PowerRating) are rallying to new multi-month highs and have
made good on Off The Blocks
entries. 

A surprise up-tick in the weekly American Petroleum Report (API) is resulting in higher oil prices. Crude is also stronger on OPEC’s statement that it will cut back daily output by one million barrels a day. September crude oil
(
CLU1 |
Quote |
Chart |
News |
PowerRating) is currently in an intraday pullback and consolidating in a narrow range just off the session highs.