Wednesday’s Setups
Unleaded gasoline
(
HUX1 |
Quote |
Chart |
News |
PowerRating)
held “the upside test … at .6090 to .6110” suggested in
Monday’s setups. Unleaded is now in a 1-2-3-4
Pullback From Lows setup and closed near the trigger, today’s low.
The
British pound
(
BPZ1 |
Quote |
Chart |
News |
PowerRating) remains an Implosion
market and could continue to head south out of its bearish flag, pointed out in Friday’s
Setups.
The collective downside movement in all of the major
currencies — the
Japanese yen
(
JYZ1 |
Quote |
Chart |
News |
PowerRating),
euro FX futures
(
ECZ1 |
Quote |
Chart |
News |
PowerRating),
Swiss francs
(
SFZ1 |
Quote |
Chart |
News |
PowerRating), and British pounds
(
BPZ1 |
Quote |
Chart |
News |
PowerRating)— all hit
New 10-Day Lows vis-Ã -vis the dollar and point to higher ground for dollar index futures
(
DXZ1 |
Quote |
Chart |
News |
PowerRating).
The DXZ1 is also a Momentum-5
market. With the major currencies imploding against the buck, their collective
demise makes the dollar a slightly safer bet than targeting any single (of the
above-listed) currency futures. Since the dollar index hit a two-month high, consider establishing
longs in an Off The Blocks
entry or on a pullback from the high.
After four down days, February 2002 pork bellies
(
PBG2 |
Quote |
Chart |
News |
PowerRating)
are a bit oversold and could get some upside action off their
Turtle Soup Plus One Buy setup.
T-bonds’
(
USZ1 |
Quote |
Chart |
News |
PowerRating) close at the top of their range suggests
they could break through what amounts to triple tops on today’s 5-minute chart
and test to the 106 9/32-12/32 resistance area to fill this morning’s gap. A break above
106 21/32 casts into doubt the argument for double tops and suggests new highs.
A fundamental factor supporting higher highs is deflation in commodity prices.
I.e., the CRB index is nearly at a three-year low. Grains are at contract lows
(with beans matching the 1999 and 1973 lows) and selected softs, cotton and
coffee, are at multi-year lows. Further, oil and products prices
(unleaded) are down as much as 30% in three months. While low interest rates are
very inflationary, low commodity prices may hold inflation at bay — for a
while.
|
Contract
|
Symbol |
Setup |
Direction |
Trigger |
| ( HUX1 | Quote | Chart | News | PowerRating) |
Pullback From Low |
Down |
.5880 |
|
British pound |
( BPZ1 | Quote | Chart | News | PowerRating) |
Implosion market, bearish flag |
Down |
Off The Blocks shorts or intraday Pullbacks. |
Dollar index futures
|
( DXZ1 | Quote | Chart | News | PowerRating) |
Currencies down vs. buck, Momentum |
Up |
Off The Blocks longs or intraday Pullbacks. |
Pork bellies |
( PBG2 | Quote | Chart | News | PowerRating) |
Turtle Soup Plus One Buy |
Up |
68.100 (the prior 20-day low). |
| ( USZ1 | Quote | Chart | News | PowerRating) |
Double Tops |
Down |
Against resistance at 106 7/32 and 106 10/32 |