The Buck Stops Here
December dollar index futures
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dived in their biggest decline in over a month, stopping a five-week rally.
The gap-down move in the buck today gives credence to the intermediate-term double
tops formation struck last week and also leaves a dropping right shoulder in
a weekly head-and-shoulders top formation.
Today’s exit out of the buck comes on a week with a
full agenda of economic reports ahead. The dollar responds mostly to
perceptions about economic growth and relative interest rates and early
indications suggest the economy is slamming on the brakes. Gross domestic
product (GDP) figures come out Wednesday, and the number is forecast to be
negative (see below). The European Central Bank (ECB) also met last week and
left short-term rates unchanged, a factor that benefits the euro and hurts
the dollar as investors move money to continental accounts in order to
receive a slightly higher return in euros. The
euro FX futures
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Stock index futures also sold off with blue-chip
Dow futures
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played catch up on the session’s broad downhill slide and overtook on a
percentage basis loss to close down 5.5%, or 80.50, at 1371.00. Dow futures
lost 275.67 to close at 9208.0. Both Dow and S&P futures
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made good on
Turtle Soup Plus One
Sell setups today, and Nasdaq 100 futures
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their signal for a second day after registering a “Soup Sell” signal
Friday.
A flight-to-safety move — and momentum — in T-bonds
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bonds to new contract highs. T-bonds are on the Momentum-5
List market and were highlighted in the Nightly
Futures Report.
Following are reports slated for release this week
and estimates for the data:
Tuesday — The
Conference Board’s Consumer Confidence estimate: 96.6.
Wednesday — Q3 gross domestic product estimate: -1%.
Thursday — Construction spending estimate: -.7%.
Personal income estimate: .1%.
NAPM estimate: 44.5.
Jobless claims last week hit a 10-year high of 504,000.
Friday — Employment
situation estimate: -283,000.
Factor orders: -5%.
Natural gas
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continues to exhibit strong upside momentum, gapping higher today and
continuing to a two-month high close, up .161 at 3.202. Gas was also
featured last week in the Nightly Futures Report.
A bullish hog report as well as a turnaround from a
net short to a net long position among commercials players in the Commitment
of Traders Report pushed the two front-month hog contracts to near limit-up
levels.
December lean hogs
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49.650.