No Confidence Vote Nicks Yen
Japanese Prime Minister Yoshiro Mori triumphed against a no confidence vote
of the ruling Liberal Democratic Party and will stay in power, but the Japanese yen
(
JYZ0 |
Quote |
Chart |
News |
PowerRating),
nonetheless faltered and hit a contract low, losing .0090 to .9141. The yen
gapped down on the open in response to overnight action in the cash market, but
still provided opportunities to get short. The yen had been set up in a weak
pattern, hitting 10-day lows on Thursday, a situation pointed out in this space
Friday. Although Mori will remain in office, his public approval rating stands
at an abysmal 15%, and political observers believe the no confidence vote will
leave his party fractionalized and unable to bring meaningful reform to Japan’s
economy.
December dollar index futures
(
DXZ0 |
Quote |
Chart |
News |
PowerRating) fell slightly after registering a
New 10-Day High. Dollar index futures, Swiss francs
(
SFZ0 |
Quote |
Chart |
News |
PowerRating), and euro FX
futures
(
ECZ0 |
Quote |
Chart |
News |
PowerRating) all registered on the
6/100 Low Volatility
List. This implies the contracts are setting up to make a larger-than-normal
move as short-term (six-day) volatility returns to its normal, 100-day
volatility. While this indicator does not suggest market direction–only the
likelihood of an explosive move–the Swiss franc and
Canadian dollar’s
(
CDZ0 |
Quote |
Chart |
News |
PowerRating)Implosion-5 List,
yen weakness, a
New 10-Day Low reading in the ECZ0, and a Pullback From Lows
setup in the
British pound
(
BPZ0 |
Quote |
Chart |
News |
PowerRating), all suggest that the dollar will continue to rally as
these currencies weaken. Historically, in six of the seven periods following a
US Presidential election, the dollar has rallied 5%, contributing a
seasonal/fundamental bias to the stronger dollar-weaker euro argument.Â
Stock index futures continued trading lower after Morgan Stanley downgrades
of Cisco and networkers and the second loss in four months of a top Oracle
executive.
NASDAQ 100 futures
(
NDZ0 |
Quote |
Chart |
News |
PowerRating) continued lower out of their Pullback From Lows
setup as the Nasdaq cash index
(
NDX |
Quote |
Chart |
News |
PowerRating) closed at its lowest level of the year.
The futures tumbled nearly 100 points from their high of the day in a volatile
last hour, settling on the lows of the session, down 122.50 at 2814.50. December S&P futures
(
SPZ0 |
Quote |
Chart |
News |
PowerRating)
fell 23.00 to 1347.00 and Dow futures
(
DJZ0 |
Quote |
Chart |
News |
PowerRating) slumped 153.0 to 10,500.0.
Lower-than-normal temperature forecasted for the upcoming Thanksgiving
holiday in the Northeast and unusually low inventories spiked energy prices,
driving heating fuel contracts to new highs. The leading contract on the Momentum-5
List, Dec. heating oil
(
HOZ0 |
Quote |
Chart |
News |
PowerRating), matched
a contract high before settling .0192 higher at 1.0980. The January heating oil
contract
(
HOF1 |
Quote |
Chart |
News |
PowerRating) traded to a 20-year high.Â
A new round of violence in the Middle East also put pressure on energies.
Israeli gunships responded by firing at selected targets in Palestinian-occupied territories after a bomb exploded near a school bus, killing and
injuring children and teachers. January crude oil
(
CLF1 |
Quote |
Chart |
News |
PowerRating), also from the Momentum-5, closed at a new contract record, up .21
at 35.24.
 Â
Soymeal (SMZ0)
jolted higher after the European Parliament and Italian government said they
favored banning the use of bone-and-meat meal as animal feed (due to a mad cow
scare). Soymeal is a high protein substitute. Soymeal is set up in a two-month,
upper-level base. Friday’s expansion bar, up 6.0 at 175.8, is still below the
pivot (the top of the base) and the futures shows plenty of gaps and laps,
defining it as a possible runaway market. This setup was pointed out
in Friday’s
Futures Market Recap and Futures Market Trading Outlook.