Natural Gas Breathes Again

  • August 2, 2000
  • Marc Dupee

Newspaper headlines threatening “rolling brownouts” to electricity-users across California due to hot temperatures, a lack of generation capacity, and depleted national stockpiles gave traders a reason to
place heavy buy orders for a second straight day in the New York natural gas pit.

The American Gas Association (AGA) reported that the
industry injected 63 billion cubic feet into storage last week. This figure came
in as expected but was, nonetheless, bullishly construed. In a demonstration of how patterns
work in multiple timeframes, nat gas surged after registering an intraday Turtle
Soup Plus One buy signal and ended .227 higher at 4.214.

Slower home sales and an unchanged leading economic
indicators statistic turned around an early head fake down in stock index
futures but the early gains failed to hold and steep declines in Nasdaq 100
heavyweights Cisco
(
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session’s gains to lead the September futures to their 10th loss in 12 sessions, The September Naz futures closed down 59.50 at 3510.00.

One dozen stocks comprise more than 50% of the weighting
of the Nasdaq 100
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PowerRating). Nice gains in the most representative stocks of the
closely watched index powered tech higher in the early-going Wednesday and then
lower late in the session. JDS Uniphase, although not the most heavily weighted
stock on the Nasdaq 100 at 5.17%, has been acting as both a leader of the index
and of the broader tech sector. JDSU tumbled lower on the opening to tag its
50-day moving average, and from there received (institutional) buying support in
a repeat of Monday’s price action at the 50-line. But the stock couldn’t sustain gains and
closed with the biggest losses among the big cap techs, down 4 1/4 at 112 5/8.
When JDSU’s merger with SDLI is completed, the implied weighting of the combined
company will be 6.7%, giving it the third highest weighting on the NDX, just
behind Cisco and Intel which currently have weightings of  7.8% and 7.5%,
respectively. Microsoft’s NDX weighting now stands at 6.2%. 

Traders fled to blue chip techs as Dow futures
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of 5.50 to 1453.00. Hewlett-Packard rallied on word that it will jointly develop
hardware, software, and networking solutions with ATT (T) in an online commerce
venture.  

In other markets, the biggest drop in weekly inventories
in six months took energy markets by surprise and fueled a rally in crude
oil, unleaded gasoline and heating oil. The American Petroleum Institute said
crude reserves dropped by a whopping three million barrels, which has lead to an
average 1.8% jump in futures prices across the oil patch. 

In currencies, dollar index futures made good on their Momentum-5
List reading and ended .61 higher at 110.48. The yen failed to hold on to
early gains after a Bank of Japan governor said the central bank could soon
raise interest rates from near-zero levels. The yen closed down .0006 at .9248.

Sugar surged back up after a two-day sell off and a
“tail” left on Tuesday’s daily bar. Sugar has been in a solid up trend
and has been a consistent leader on the Momentum-5
List. The October contract closed .44 higher at 10.79.