Last Gust For Gas?

  • August 1, 2000
  • Marc Dupee

The threat of a hurricane developing from a tropical
depression in the Gulf of Mexico sent natural gas racing higher Tuesday, but
some traders felt the rally was overblown and may just be just the last gasp of
a jittery market before a selloff. Although forecasts of slightly
higher-than-normal temperatures in the eastern half of the country also gave the
trade reason to bid nat gas higher, the market remains heavy and has traced a
head-and-shoulders top at near-historic levels. The September contract rose .213
to 3.987 with back months rising less than 4%. 

Other energy markets fell as OPEC told members to slow
output as prices fall. September crude oil
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heating oil
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Turtle Soup Plus One Buy
 set up to end .0119 higher at .7684.

Confirmation of a moderating economy did little to
embolden traders to initiate fresh long positions in the face of a sketchy
Nasdaq Composite chart. Back-to-back reports showing a slow down
in manufacturing activity both in the Midwest and nationwide Monday and Tuesday could have
provided the spark for the Nasdaq to extend Monday’s Nasdaq rally, but traders
sold big caps. Dell
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loser among big-cap Nasdaq 100 (NDX) stocks and led the futures
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47.50 to 3569.50.
Dow futures
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added 8.60 to 1447.50.

A slight drop in US manufacturing activity kicked
T-bonds to the top of their recent range and lent a bullish slant for more
potential upside. The National Association of Purchasing Management’s index
showed manufacturing grew at a slower-than-expected pace in July rising 51.8.
The number was unchanged from the previous month and slightly less than analysts
expected. Slower economic growth is good for bonds because it reduces the
likelihood that the Fed will raise interest rates at its Aug. 22 meeting.
T-bonds are on the Momentum-5
List and have been indicating they could make a larger-than-expected move by
registering on the Multiple Days Low
Volatility List. The September contract closed 12/32 higher at 98
31/32.

In an interesting development in the credit market,
TradingMarkets.com Bond Analyst Tony Crescenzi reported on the TradersWire that
“There is speculation in the bond market that the Treasury department will announce the elimination of 30-year bonds when they make their refunding
announcement tomorrow afternoon.” The upshot of this development is that this could also spur demand for 30-year
T-bonds as large institutions seeking to cover their longer-term obligations
(30-year) will compete for a dwindling supply of debt. 

September dollar index futures
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List reading and finish up .51 at 109.88. The dollar rose despite a
weakening economy depicted in the NAPM figures. The euro FX
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currency most heavily weighted in the dollar index, slipped to a two-month low,
falling .0060 to .92300. Swiss francs
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low, down .0032 to .5985.

 

Orange juice continued to new lows after registering
on the Implosion-5 List
and closed down .25 at 75.50.