Finding The Silver Lining In 10-Day Extremes
Interested in an early tip-off to locating markets that could explode in a momentum pulse — either up or down? Check out TradingMarkets New 10-Day High and New 10-Day Low lists on the Futures Indicators page. Both of these lists can alert you to markets in early phases of momentum, sometimes detecting trends even before contracts appear on the Momentum-5 or Implosion-5 lists.
Today, silver made an implosive move after registering on the New 10-Day Low List. Similar to contracts that appear on the Implosion-5 List, a good technique for catching moves in markets that are indicating direction is through my Off The Blocks technique. In the instance of a New 10-Day Low or Implosion-5 reading, an Off The Blocks entry occurs once a market breaks down below the opening five-minute bar —— if the market has not gapped or lapped higher. The stop goes just above the opening five-minute bar.
July silver
(
SIN1 |
Quote |
Chart |
News |
PowerRating) traded in a narrow range for the first 45 minutes, then stair-stepped lower to rack up another day in a string of hefty losses, shedding 8.8 to close at 433.5, near its contract low. Nimble swing traders will want to note that this contract could touch down to new lows and reverse its oversold condition in a Turtle Soup (Buy) setup tomorrow. Monitor the action around the previous 20-day low, at 431.5, for a possible turnaround play.
In the financials, stock index futures oscillated on both sides of breakeven in more volatility contracting action that benefited sellers of option premium. Nasdaq 100 futures were the losers here, falling 9.50 to 1842. S&P futures went out near their high-handle, up a tepid 4.20 at 1269.20, and Dow futures added 30.0 to 11,065.0.
September bonds
(
USU1 |
Quote |
Chart |
News |
PowerRating) gained on a statement from Fed chief Greenspan that inflation is under control. Lower inflation telegraphs to traders that the Fed can continue to cut interest rates to stimulate the economy without the threat of inflationary pressures. The July Fed Funds futures
(
FFN1 |
Quote |
Chart |
News |
PowerRating) priced in as high as a 98% chance of a 25-basis-point cut by the FOMC’s June meeting.
Also in the financials, Greenspan was not the only central banker to broadcast to the financial world that inflation is not a problem. The head of the European Central Bank, Wim Duisenberg, said he expected inflation would drop below the ECB’s 2% target, but not until early next year. European inflation is projected to remain near 3%, which is putting pressure on the euro FX
(
ECM1 |
Quote |
Chart |
News |
PowerRating) as its value erodes. In Friday night’s Futures Outlook, I pointed out that the euro FX was likely to fill the May 31 gap, which it almost did upon hitting its high of .85200 this morning before heading south. The ECM1 is also on the Implosion-5 List. Today’s action took the ECM1 to its lowest close of the year (although only by one tick), leaving the single-currency futures down .00190 at .84580.
Also from the Implosion-5 List, Swiss francs
(
SFM1 |
Quote |
Chart |
News |
PowerRating) closed more restrained, losing just one tick to .5575.
Oil prices headed higher ahead of tomorrow’s powwow of OPEC oil ministers on speculation that members of the cartel plan to leave the current quotas among members unchanged. Expectations are for members to maintain quotas to ensure that the $22 through $28 price “band†that OPEC has established will remain in place. Currently an OPEC barrel is about $26.
July crude
(
CLN1 |
Quote |
Chart |
News |
PowerRating) jumped higher but spent the session selling off from highs, ending .12 higher at 28.13.