Temperate Temps Torture Nat Gas Longs

October 30, 2000
Marc Dupee

Forecasts for temperate temperatures across the Northeast, a
region that is a primary consumer of natural gas for heating, blunted an early
rally in the futures in a volatile day that sent the December contract for its
fifth consecutive loss. Nat gas fell back, after attemped a breakout of Friday’s last-hour’s high, bruising traders hoping for a reversalbreakout. The Dec. contract closed near its low in an area that saw heavy consolidation over the summer consolidation, ending down .167 at 4.485.

Oil traders were in a “show me the oil” mood,
skeptical that OPEC’s pledge to raise production by the 500,000 barrels called
for in its $22-$28 price-band mechanism will result in any new supply. Some
observers believe no new supply will actually hit the market and/or that the any
new output has already been discounted by the market. Lingering doubts about the
Israel-Palestine conflict, Iraq’s threat to disrupt its 2.1 million-barrel-a-day
output (unless it is paid in euros), news that Mexican output may be at
capacity, and a refinery closure in the states all worked toÂ create a
negative perception about supply and sparked a rally in energies.Â

A Lehman Brothers report paring back earlier growth forecasts
at the world’s largest maker of networking gear bifurcated stock index futures
as traders shunned tech and snapped up interest sensitive blue-chip equities.

Nasdaq 100 futures
(
NDZ0 |
Quote |
Chart |
News |
PowerRating) were unable to
capitalize on a retracement of Monday morning’s gap-down opening. Naz traders
first looked at the rally in Dow/S&Ps futures and the continued strong showing in
Microsoft (which weights 6% on the Naz 100) and were inspired to drive the
contract to fill the gap. But weakness in the other heavy
hitters on the 100 cash index (Qualcomm, SDLI, Cicso, Oracle, and JDS Uniphase) overwhelmed MSFT strength and
threw the NDZ for a 115.00 loss to 3107.50.

Grains tilted lower after soybean oil and soybeans
registered on the Implosion-5
List. Bean oil closed at a multi-month low, down .0800 at 14.5700. Grain
contracts are poised for a larger-than-normal move as corn and bean oil are both
Multiple Days Low
Volatility markets.

Cotton
(
CTZ0 |
Quote |
Chart |
News |
PowerRating) traded at a 10-day high and in an outside-day bar that closed on its high. This is a potentially strong technical indicator
predicating further upside. Cotton closed up .85 at 63.99.

Temperate Temps Torture Nat Gas Longs

BUY THE FEAR, SELL THE GREED

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