Hair-Trigger Contract

  • December 15, 2000
  • Marc Dupee

A new cold threat tripped the natural gas fuse, igniting
another explosive day that sent the New York futures on a 10%-plus ride yet
again. Any traders holding on to natural gas shorts in hopes that the futures
would fall for a fourth consecutive day got squeezed as forecasts for cold
weather across the Midwest and Northeast drove prices sharply higher. Trading
was halted for an exchange-imposed 15 minutes after gas rallied 1.000. The
January contract was in a daily Pullback From Highs
setup, but also provided two intraday Slim Jim-like, stair-step entry
opportunities. Nat gas closed .983 higher at 8.396.

The rally in gas helped propel the rest of the energy
complex higher as well. January crude oil
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five days, setting it up for a
Turtle Soup Plus One Buy.
Crude pulled back toward the middle of its range yesterday, enhancing the chance
that the Turtle Soup signal would work out. Crude is also oversold after
having dropped as much as 22% since November 11. (The market has declined in
recent days because of a renewed Iraqi deal to resume exports).
January crude oil
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heating oil
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unleaded gasoline
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From the Momentum-5
List,
T-bonds
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and as fresh economic-news evidence kept the pressure on the Fed to change their
tight money bias or to cut interest rates. For a quick read on why many pundits
may be wrong about the Fed at their meeting next week, see the Crescenzi
On T-Bond Futures Commentary.  T-bonds closed 8/32 higher at 104 25/32.

 

Stock index futures got slammed after traders failed to factor in how
Microsoft would likely get hammered along with Dell, Compaq, Intel, and other
computer and bellwether stocks. The software giant missed earnings for the first
time in ten years. S&P futures
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and Dow futures
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Nasdaq 100 futures
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turned to close 67.50 lower at 2602.50. The Nasdaq will adjust the stocks on the
100 index to take effect Monday. During the late rally, nearly all of the stocks
that will join the Naz 100 were higher, potentially inspiring the rally.

Click
here to go the Nasdaq Website (and scroll down the menu selections on the
left to “Annual Changes To The Nasdaq 100 Index”) to read about the
new companies that will join the Naz 100.

The Nasdaq 100 futures are likely to become more volatile
starting next Monday when annual changes of component stocks go into effect.
Notice that the new list, below, has four biotechs–typically among the
most volatile stocks– as well as Internet stocks. You should update your watch
lists as these stocks are sure to exert an influence on the Naz 100. 

The following issues will be added to the Nasdaq-100
Index: BEA Systems, Inc. (BEAS); Check Point Software Technologies Ltd. (CHKP);
Millennium Pharmaceuticals, Inc. (MLNM); Exodus Communications, Inc. (EXDS);
Flextronics International Ltd. (FLEX); Rational Software Corporation (RATL);
Human Genome Sciences, Inc. (HGSI); Mercury Interactive Corporation (MERQ); IDEC
Pharmaceuticals Corporation (IDPH), Inktomi Corporation (INKT); Abgenix, Inc. (ABGX);
and TMP Worldwide Inc. (TMPW).

As a result of the addition of the companies above to the
Nasdaq-100 Index, the following companies will be removed: Adaptec, Inc. (ADPT);
American Power Conversion Corporation (APCC); Apollo Group, Inc. (APOL); Dollar
Tree Stores, Inc. (DLTR); Herman Miller, Inc. (MLHR); Legato Systems, Inc. (LGTO);
Network Associates, Inc. (NETA); Northwest Airlines Corporation (NWAC);
PacifiCare Health Systems, Inc. (PHSY); Quintiles Transnational Corp. (QTRN);
Sigma-Aldrich Corporation (SIAL); and Synopsys, Inc. (SNPS).

When a market can rise on bad news, it’s a good sign. A
closely watched survey from the German Ifo economic institute showed that
business sentiment in that country fell for the sixth consecutive month, a sign
of a slowing economy that would usually spur the selling of euros. But euro FX futures
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nonetheless continued making progress out of their pullback setup, gapping to a
fresh three-month high.
Swiss francs
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on the Momentum-5
List. 

January soybeans
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say “go,” closing 3 and .7 higher, respectively. Bean oil
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was the big winner in the bean complex, gaining.1900 to 15.1700.