Trigger-Happy
Oil and its derivative products are selling off as
traders ditch longs and enter the weekend flat ahead of yet another highly
anticipated OPEC meeting which will set output policy through the end of the
year.
Energy contracts are trading at 10-year records but comments from the oil
minister of the world’s largest producer, Saudi Arabia, said the cartel would
take action this weekend to bring prices down. The question remains will any
production increase be large enough and soon enough and will any increase be
greater than the 500,000 to 800,000 barrels a day that has already been promised
once oil prices rise for more than 20 days above $28 an OPEC barrel.
The energy complex is showing unusual strength,
dominating the Momentum-5 List. But heating oil registered a Turtle Soup Plus One
Sell signal, tipping off a potential reversal-from-highs. The October
contract is trading right below the trigger of the sell signal (the previous
20-day high) and is down .0206 on the day at 1.0080. Crude and unleaded gasoline
are also down over 3.3% each or 1.19 and .0393, respectively.
Currency traders are ignoring the about-face jawboning of
German Chancellor Schroeder this week, and selling Implosion-5 List
components
Euro FX
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PowerRating) and Swiss francs
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PowerRating) back to multi-year lows. Schroeder said a lower euro would be a “welcomed” benefit to exporters, implying at once that there would be no political pressure to support the currency and a lack of a cohesive vision for Euroland monetary policy. The Chancellor tried to downplay statements to reporters in New York Thursday, but the new lows in the euro FX show traders remain skeptical. The US
economy is also expanding at nearly twice the pace of europe’s with higher
productivity, lower unemployment and higher, more stable interest rates.
September dollar index futures
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PowerRating) are also continuing higher after a
post Thursday on the Momentum-5 List and a
New 10-Day High. The dollar is getting an extra boost from a decline in the
Japanese yen
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PowerRating), which is suffering after Moody’s downgraded the
country’s credit rating. A sharp decline in
British pounds
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PowerRating), also an Implosion-5 member, is also helping to
propel the dollar index to a new contract record.