Nat Gas Back Months Burn

  • July 7, 2000
  • Marc Dupee

Winter contracts in natural gas soared after the U.S.
Energy Information Administration (EIA) said in its Short-term Energy Outlook
that prices could increase as much as 60% by next March. Rising demand for
natural gas–both for cooling and heating–as well as a “sluggish injection
rate for gas into storage” continues to fan the rally in natural gas which
could soon trade at all-time highs. 

March 2001 natural gas
(
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2001 gas shot up 5.07%. The nearby August contract
(
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Pullback From Highs
signal, adding one-half of its .196 gain to 4.262 after trading above its entry
signal at Thursday’s high. 

Other energies steadied after recent, steep declines:
August crude oil
(
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(
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An anticipated employment report Friday morning provided
further evidence that the US economy is ticking healthily along, but at a pace
slow enough to take the Federal Reserve off its year-long program of interest
rate hikes. The employment situation report released by the Labor Department
showed that unemployment in June fell from 4.1% to 4.0% and wages rose a
predicted .4% an hour, on average. 

Although the drop in unemployment leaves the jobless figure
just .1% above its 30-year low of 3.9%, traders focused in on the 11,000
additional jobs added to nonfarm payrolls, a figure well below analysts’
expectations. Thursday’s reports of slower retail sales, coupled with signs of
underlying strength in the industrial economy as depicted by the highest level
of monthly factory orders in seven years, lent additional credence to the idea
that the Fed has engineered a “soft landing” and that it may not need
to raise interest rates at its next FOMC meeting in August. 

T-bonds futures
(
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successful Turtle Soup Plus One Sell setup on the news and filled the window
left from the gap down opening to close back near two-month highs, up 14/32 at
97/20. Ten year notes
(
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PowerRating) also closed at one of the highest levels of
the year with a 10/32 gain to 98 27/32. 

Stock index futures were also favorably bid on the jobs
report. Two positive Market
Bias Indicators left a strong clue that index futures could trade higher.
The September S&P futures
(
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PowerRating) rallied 21.00 to 1494.70,
NASDAQ 100 futures
(
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PowerRating) traded to triple-digit gains before pulling back
to close up 43.50 at 3877.50 and
Dow futures
(
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PowerRating) added 147.0 to 10,740.0 in their best day in a
month.  

From the Momentum-5
List, August  pork bellies
(
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move by touching limit-lock levels again before backing off to end 2.075 higher
at 90.275. August lean hogs
(
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PowerRating) also tacked on 1.075 to 70.500.

Grains got some relief from a technical bounce off
year-to-date lows. Soybeans
(
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468 while wheat and corn’s reactions were muted. 

From the 10-day lows list, September coffee
(
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traded to a new contract low and six-year low. Contracts registering on the
10-day lows list also make good shorting candidates utilizing my Off
The Blocks Method for entry. Â