I’ll See Your 50 And Raise You…
Not to be outdone by their monetary policy colleagues
south of the border — lest their economy be left behind — the Bank of
Canada exceeded expectations today by lowering a key short-term interest
rate 75-basis points. Most economists expected a .50%, or 50-basis-point
cut.
This brings the Canadian and US rates within one-quarter percent of
each other: federal funds futures stand at 2.50% and the Canadian equivalent
now stands at 2.75%. Both rates are at their lowest levels in over four
decades and are designed to provide the octane believed necessary to pull
both countries out of economic doldrums.
In Friday’s Nightly
Futures Traders Report, one of several new nightly reports on
stocks, options and futures traders available on TradingMarkets.com, the “expectation (was) for a bounce off the triple bottoms (includes the April lows)
before a move lower.” After hammering a bottom at the .6320 level,
the
Canadian dollar
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two weeks, adding .0031 to .6360. The powerful surge today alters a more
bearish view of the market and implies a bigger upside correction off the
bottoms before a possibly completing a “measured move out of its
head-and-shoulders top formation.”
Mentioned in last night’s Nightly
Futures Report, T-bonds
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action out of their double-top formation.” While it would have been
difficult to catch the majority of the three-quarter-point move down due to a
morning gap down, T-bonds retraced and closed at pivotal resistance, down 6/32
at 106 7/32. See tonight’s report for another key level to consider the short
side.
Ending in positive territory, the Nasdaq 100 futures
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showed better relative strength compared with S&P futures
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and Dow futures
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Pullback From Highs List
and triggered by trading above yesterday’s high.
In shortened trading,
coffee
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trigger of a Turtle Soup Plus One Buy signal.
Unleaded gasoline
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continues to be capped by the resistance level spelled out in Monday’s
report and now have a 1-2-3-4 Pullback from lows setup after closing near
their lows, down .0078 at .5901.