Productive Punch
A sharp rise in quarterly productivity in the US boosted
blue chips and sent
Dow futures
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in Microsoft also provided lift to equity index futures and strong productivity
figures were buck positive for dollar index futures.
Although Dow futures
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opening, the contract, which opens one hour before other stock indexes, showed
higher highs and higher lows early on the intraday chart, a positive sign. Once
the futures cleared the high of the last hour of Monday’s trade, an Off
The Blocks entry was generated and the contract rallied throughout the
session to close 110.0 higher at 11,034.0. September S&P futures
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added 5.60 to 1491.80.
Microsoft
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10-day consolidation and out of an intraday consolidation at high pattern. Of
course, Microsoft exerts a huge impact on the Nasdaq Comp and Nasdaq 100 futures
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Volume was particularly heavy with 12 million shares crossing the tape in the 30
minutes between 1 PM and 1:30 PM ET. This is the type of accumulation off a low,
and out of a consolidation band, that usually signals the start of an up move.
But the rally in Microsoft was still not enough to leave the futures with a
green finish and the NDU0 continued to follow the bellwether of the futures,
JDS Uniphase, with both finishing at a slight loss.
Interest rate futures also interpreted the productivity
figures in a positive light, with the major contracts each closing just one tick
from contract record closes. September T-bonds
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at 99 21/32 and 10-year notes
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Dollar index futures
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highs. Dollar index futures are the leading contract on the Momentum-5
List. The recent strong quarterly GDP outcome, coupled with Tuesday’s
17-year high in productivity–a development which should lead to more economic
growth–enhances the prospect of the dollar increasing in value vis-Ã -vis
competing currencies.
The Swiss franc’s
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also helped cement the argument for a higher dollar. The euro FX, the currency
most heavily weighted in the dollar index has a greater than 90% correlation
with the Swiss franc. A signal by Swiss futures is as good as a signal by the
euro FX and one of the strongest combined signals is a Momentum-5/Implosion-5
divergence in the dollar/euro. Euros and Swiss francs are more liquid than
dollar index futures, and are probably the trade that will allow you to
participate with the least slippage. Again, a way to play any of these would have
been by using my Off
The Blocks method, a strategy that gets you in on futures contracts from our
proprietary futures momentum lists with limited risk.
Also from the Momentum-5
List, natural gas
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back to resistance near contract highs. Nat gas has rallied every day since last
week’s AGA weekly injection figures and declining volume in this contract in
recent days shows traders taking some profits off the table prior to Wednesday’s
report. NGU0 closed .061 higher at 4.409.