Optimists Club

• February 28, 2001
• Marc Dupee

Traders optimistic that an interest rate cut might come
early had their hopes dashed as Fed chief
Greenspan made it clear while speaking to Congress that the
monetary-policy-making body prefers to make interest rate decisions at scheduled
meetings. Optimism for an early cut came from former Fed
governor Wayne Angell, who in recent sessions had handicapped as high as an 80%
chance of an inter-meeting rate cut. Angel retracted the early cut call today. Stock index futures bled lower throughout
Greenspan’s testimony given to the House Financial
Services Committee. 

Nasdaq 100 futures
(
NDH1 |
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Implosion-5 List,
broke to a new contract low of 1882 before settling 56.00 lower at 1913.0. S&P futures
(
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fell 22.10 to1242.00 and

Dow futures
(
DJH1 |
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PowerRating) crumbled 176.0 to 10,499.0.

As the value of the Nasdaq crumbles, it is instructive to
know which stocks will lead the Nasdaq 100
(
NDX |
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a list of the 10 most heavily weighted stocks on the NDX.  These stocks tend
to determine the direction of the NDX as well as the broad technology sector. 

1. Microsoft
(
MSFT |
Quote |
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PowerRating)       
8.28%

2. Intel
(
INTC |
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PowerRating)                 
5.19%

3. Cisco
(
CSCO |
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PowerRating)            
4.68%

4. Oracle
(
ORCL |
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News |
PowerRating)           
3.85%

5. Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating)  3.81%

6. JDS Uniphase
(
JDSU |
Quote |
Chart |
News |
PowerRating)   2.84%

7. Amgen
(
AMGN |
Quote |
Chart |
News |
PowerRating)        2.70%

8. Sun Micro
(
SUNW |
Quote |
Chart |
News |
PowerRating)    2.13%

9. Veritas
(
VRTS |
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Chart |
News |
PowerRating)           
1.89%

10. Immunex
(
IMNX |
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Chart |
News |
PowerRating)     1.81% 

                               
TOTAL =  37.18%

T-bonds
(
USH1 |
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PowerRating) and

10-year notes
(
TYH1 |
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Sell setups, then rebounded and also made good on Momentum-5
List readings by finishing up 4/32 and 14/32, respectively. The June
contract 
(
USM1 |
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PowerRating) became top step today. 

March dollar index futures
(
DXH1 |
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aggressive Fed tightening edged lower. The dollar is more focused on prospects
of economic revival and equity prices than interest rate differentials–at least
temporarily. 

The Japanese yen
(
JYH1 |
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PowerRating) gapped lower after the
Bank of Japan reduced interest rates to even closer to zero percent. A swing
trade entry could have been had at the opening 10-minute bar for a short trade
to a new 10-day low. 

 

April gold
(
GCJ1 |
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PowerRating), which may be short-term overbought, gapped
lower and then recovered. Gold remains just below its
Pullback From Lows
trigger, closing down .6 at 267.8.  

Also in the metals, silver
(
SIK1 |
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PowerRating) traced an engulfing bar just above its contract
low for a gain of 5.8 to 447.2. Engulfing bars generally signal a
reversal. 

Pork contracts pulled back after multiple days of a
powerful rally. April lean hogs
(
LHJ1 |
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PowerRating) closed lower for the first
session in 10, settling .425 lower at 62.800. March pork bellies
(
PBH1 |
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PowerRating)
(another Momentum-5
market), slipped after failing to take out yesterday’s high, settling 1.500
lower at at 76.150.

In the softs, May sugar
(
SBK1 |
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Chart |
News |
PowerRating) also laid an
engulfing bar that completely erased yesterday’s big down thrust to leave an
outside day, three-month low and reversal. Sugar closed .36 higher at 8.99.

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