Frost Attack Exaggerated
Coffee continues to reverberate in volatile trade as news
trickles back from Brazil relaying the extent of damage to the crop. The primary
growing region did not get hit with as much cold, plant-killing weather
as initially anticipated. The September contract has erased another 12% of
recent gains so far Thursday, following Wednesday’s 10% fall from Tuesday’s
high. Still approximately 30% of the crop is forecast to be damaged in Minas
Gerais area, one of the major producing areas.
The Street likes what it hears from the Fed Chief Both
T-bond and 10-year T-note futures have rallied since the beginning of his speech
Thursday morning and are probing new highs as Greenspan’s testimony before
Congress continues. Sep T-bonds
(
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PowerRating), from the Pullback From Highs List,
have screamed up 1 1/32 to 97 31/32 and 10-years
(
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PowerRating) are up 20/32 to 98
15/2. Bonds and notes had closed practically unchanged over the past two
days.Â
September sugar
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PowerRating), the leading contract on the Momentum-5
List, is powering to new contract highs and making good on an Off
The Blocks entry setup.Â
As this is being published, cocoa
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PowerRating) is rallying
to a 17-day high and starting to make good on its 6/100 Low
Volatility reading. Contracts with lower-than-normal volatility tend to make
outsized moves as volatility returns to normal (reverts to its mean).Â
Pork and metals contracts are making good on Turtle Soup Plus One Buy
setups.
August lean hogs
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PowerRating), pork bellies
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PowerRating) and gold
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PowerRating) are
all trading above their old 20-day lows, the trigger points for this reversal
strategy.Â