How To Trade A 16-Year Low
September coffee
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PowerRating) exploded off a 16-year low on a
technical breakout above the 50-cent level. With prices battered, this
market has been itching to find a tradable low. Intraday opening-range
trades, intraday pullback from highs, and trades above the morning expansion
bar that initially took coffee above 50 cents all worked out before the
final explosion bars into the finish that left the contract up 10.58%, or
5.20 at 54.35.
Also in softs and fibers,
December cotton
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PowerRating) made
good on its
Implosion-5 List reading in an Off The Blocks
short entry. Since the market lapped open, the short entry came on a move
below the low of Thursday’s last-hour’s low and left cotton at a new decade
low.
Going the other way, T-bonds
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PowerRating) and 10-year notes
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TYU1 |
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PowerRating)
registered on the New 10-Day Highs List,
a sign of momentum that made them eligible for an Off The Blocks
entry. As these contracts gapped up rather than down, the setup goes long
on a move above the opening five-minute bar and both contracts rallied to
new multi-month highs following evidence of continuing economic weakness
from yesterday’s Philadelphia Fed, declining international trade (both
imports and exports fell in the trade figures), and the Michigan consumer
sentiment index. Both contracts rallied nearly a point and closed on their
highs. The 10-year contract closed at its highest level of the year.
Making good on its
Implosion-5 List reading with downside momentum,
Nasdaq 100 futures
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NDU1 |
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PowerRating) lapped lower, erased some of their loss,
but broke down below their opening bar to make good on an Off The Blocks
short entry. The 1546 low became resistance as the market chopped in an
options expiration Friday, but the level thwarted any advance as the NDU1
broke down to close at a four-month low. The big-picture daily technical
view suggests this contract will undercut the April lows.
The outside-day-bars down pointed out two days ago in the Futures Market
Recap in the energies lead to a second consecutive day of sharp declines.
Notice how little
heating oil
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HOU1 |
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PowerRating),
unleaded gasoline
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HUU1 |
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PowerRating) and crude oil
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CLU1 |
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PowerRating)
pulled back from their opening levels prior to their more than 4.5%
descents. Lower prices in the energies were in part exacerbated by the
perception that less oil and fewer products will be demanded as the economy
wanes. Crude slipped .72 to 26.68, unleaded fell .0350 to .7395, and heating
oil fell .0364 to .7051.