Highly Competitive

  • January 19, 2001
  • Marc Dupee

T-bonds are down sharply, failing to follow through after closing on their highs
yesterday. Besides a sharp two-day run up in prices, there is a lot of competing
corporate debt available, offering higher yields. For instance, Tony
Crescenzi just minutes ago said that Sears would offer 10-year notes which
would yield two percentage points more than government 10-years. The 10-year notes
(
TYH1 |
Quote |
Chart |
News |
PowerRating) just
gapped below their session lows, out of a descending triangle. 

Also note that T-bonds
(
USH1 |
Quote |
Chart |
News |
PowerRating) plunged after
failing to follow through on a close three ticks above a key cluster identified
by Carolyn Boroden in Wednesday’s Futures
Perspectives. Entry was provided on a pullback from intraday low when the
contract filled the morning gap down. 


Nasdaq 100 futures
(
NDH1 |
Quote |
Chart |
News |
PowerRating) nudged a 20-day high yesterday, setting up a Turtle Soup Plus One
Sell signal. After the Microsoft euphoria, traders may take heed that the
software maker merely matched earnings and actually warned that next quarter’s
earnings will be lower, not really such great news in light of MSFT’s 38% run
already so far this year. The NDH is currently trading at the TS+1 trigger. The
Naz dogs also could make a larger-than-normal move as volatility reverts to its
norm, a situation highlighted by its Multiple Days Low
Volatility reading. Finally, a critical mass of four
Market
Bias Indicators pointing down (two from yesterday) suggest that we could get
a reversal here. Watch the downside. 

The situation in California is starting to do more than
ripple through the national energy market. Reports are out today that the
state could experience a gasoline shortage because natural gas and electricity
used to fuel pumps to move unleaded are halted due to the crises/rolling
blackout situation. Unleaded gasoline
(
HUG1 |
Quote |
Chart |
News |
PowerRating)
is up .0100 at .8680 and

natural gas
(
NGG1 |
Quote |
Chart |
News |
PowerRating) is up .254 at 7.370.