Natural Gas Swelters
Natural gas gapped open to a new multi-year high,
rallying on forecasts for warmer temperatures in the Northeast and one day
before the release of the American Gas Association’s weekly report on stocks.
The most active August contract popped out of an expanded consolidation range
after closing at a contract record on Monday. Monday’s strong finish placed the
contract on Tuesday’s Momentum-5
List and was a tip-off to a possible continuation move today. The AGA report
will be released one hour prior to the close on Wednesday and early forecasts
are for a weak "injection."
High natural gas prices boosted prices in the broad
energy sector. Heating oil led. Heating oil can serve as a substitute to natural
gas as many co-generation electrical plants can burn both heating oil and
natural gas to make electricity. August heating oil
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PowerRating), another
member from the Momentum-5
List, rallied .0171 to .8190 and dragged another component of the list,
crude oil
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PowerRating), .42 higher to 32.05.
More signals of a US economic slow down were dollar
negatives as dollar index futures
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PowerRating) fell from a 16-day high, losing
.79 to 106.98 after finishing poorly Monday. Traders juxtaposed lower consumer
confidence numbers with the highest retail sales numbers in 10-months out of
France, Euroland’s second largest economy, reinforcing the impression that
European economies will start to perform relatively better than the US
economy and boost the euro. The euroFX
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PowerRating), from the
Pullback From Highs List,
was the biggest mover against the buck, gaining .00830 to .95130. Swiss francs
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PowerRating),
another pullback market, added .0064 to close at .6170.
Gold
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PowerRating) jumped $1 an ounce in the last hour,
rallying as the dollar declined. Gold purchases are usually dollar-denominated
and declines in the dollar often spur gold purchases. August gold closed 2.0
higher at 287.5.
Weak cash prices pressured pork contracts for a second day. Lean hogs
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PowerRating)
continued making good on Monday’s Turtle Soup Plus One sell signal, losing 1.075
to 68.700. After the close, the CME reported nearly two million pounds of net
out flow, which could be a plus for the market Wednesday. August pork bellies
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PowerRating)
also fell sharply for a second day, losing 2.275 to close at 82.500.
Orange juice, from the Momentum-5
and Pullback From Highs
lists, gapped above its pullback-entry trigger (above the high of
the three-bar pullback low bar) and rallied to close at its highest level of the
year. This contract got stuck at
its year-to-date high at 88.40 and pulled back into Tuesday’s range. This sets
up a short-term reversal in this market.
July cocoa
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PowerRating) rebounded from losses
that had taken the contract down more than 100 points in two days. The attempt
at a rebound was weak with a close just 9 points higher at 829.
