Message-ID: <28969717.1075857121273.JavaMail.evans@thyme> Date: Wed, 18 Apr 2001 14:09:00 -0700 (PDT) From: evening@ino.com To: alewis@ect.enron.com Subject: Andrew, Wednesday S&P +46.63 USD -0.31 CRB +0.05 DOW +399.10 NAS +156.22 Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "INO.com" X-To: "Andrew Lewis" X-cc: X-bcc: X-Folder: \Andrew_Lewis_Jun2001\Notes Folders\Discussion threads X-Origin: Lewis-A X-FileName: alewis.nsf W E D N E S D A Y E X T R E M E M A R K E T S A complimentary service from INO.com ( http://www.ino.com/ ) Wednesday: The CRB Index has climbed 0.05 points to 214.98. The US Dollar Index moved down 0.31 points to 116.17. The Dow Industrials moved up 399.10 points, at 10615.83, while the S&P 500 rose 46.63 points, last seen at 1238.16. The Nasdaq Composite edged higher by 156.22 points to 2079.44. 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All Products Guaranteed. _____________________________________________________________________ E X T R E M E M A R K E T C O M M E N T A R Y _____________________________________________________________________ The STOCK INDEXES soared to new highs for the month following this morning's surprise move by the Federal Reserve to cut interest rates by 50-basis points to 4.50%. The Nasdaq rallied over 9% as the news ignited a buying frenzy. Traders shifted their focus following the announced rate cut to the positive aspects of quarterly profit statements. Technically, both the Nasdaq and S&P index gapped higher on the open thereby confirming upside breakouts of this year's downtrend lines. This week's gains have turned weekly momentum indicators bullish signaling sideways to higher prices are possible this spring. The Dow also soared to a new high for the month following this morning's unexpected interest rate cut that caught the market off guard. The Dow was up over 460 points during the session and traded above trading range support crossing at 10,292.30 and the February/March downtrend line crossing near 10,600. While a round of profit taking is possible ahead of the weekend, today's strong performance as set the stage for additional gains this spring. INTEREST RATES June bonds posted a key reversal up on Wednesday following today's surprise cut in interest rates. Traders quickly began to speculate on the size of the next rate cut, which traders seem to think will be another 50- basis points at the May 15 FOMC meeting. Additional strength on Thursday would confirm today's reversal pattern thereby signaling that a short-term bottom has been posted. Stochastics and the RSI are very oversold and turning neutral to bullish with today's rebound hinting that a low is in or near. The CRB INDEX closed slightly higher on Wednesday but near session highs following a late session rally in soybeans and copper. Nevertheless, today's close below this month's uptrend line is a clear warning to traders to use caution as a short-term top may be in place. Closes above 216.40 are needed to keep this month's rally alive. ENERGY MARKETS were mixed on Wednesday following Tuesday's bearish API inventory data for crude oil. The latest API data showed that crude oil inventories have risen to 315.2 million barrels, the highest level since August 24, 1999. Today's sell off led to a breakout below April's uptrend line thereby increasing the odds that June crude oil might have posted a short-term top. A short covering bounce ahead of the close tempered some of today's losses leaving the door open for sideways trading on Thursday. Stochastics and RSI are overbought but remain bullish. June heating oil gapped down and closed lower on Wednesday due to spillover weakness from crude oil and the lower than expected decline in distillate inventories on Tuesday's API reports. Today's sell off turned a number of short-term momentum indicators that have become overbought neutral to bearish signaling that a short-term top has likely been posted. Today's mid- range close leaves the door open for sideways trading on Thursday. June unleaded gas soared to new contract highs in afternoon trading due to ongoing concerns over summer gasoline supplies. Session highs fell short of testing weekly resistance crossing at 103.50. The rising ADX (a trend-following indicator) is bullish and suggests that additional strength into early-May is possible. June Henry Hub natural gas extended Tuesday's loss following the latest AGA report that showed natural gas inventories rose by 64 billion cubic feet last week. This increase in inventory was higher than traders had expected and eased concerns over summer natural gas supplies. A short covering bounce ahead of the close tempered some of today's losses leaving the door open for sideways trading on Thursday. CURRENCIES The June Dollar posted a key reversal down after session highs fell short of testing this month's high crossing at 117.89. Today's inter-meeting interest rate cut by the Federal Reserve failed to attract following through buying in the afternoon session. Additional weakness on Thursday would confirm today's bearish reversal pattern thereby increasing the chances that a double top has likely been posted. The June Swiss Franc and D-mark closed higher on Wednesday due to late-session short covering rallies. Early weakness pushed the Swiss Franc toward last fall's lows however, selling dried up near minor support crossing at .5635. Additional strength on Thursday would confirm today's spindle bottoms and would set the stage for additional short covering into early-May. The June Canadian Dollar closed lower on Wednesday but near session highs due to a short covering bounce ahead of the close. The late session bounce could spillover into Thursday's session however, momentum indicators are turning neutral to bearish warning traders that last week's high might have marked a double top. Look for sideways to lower trading into the end of April. The June Japanese Yen closed above last week's high crossing at .8205 to confirm the recent trendline breakout and open the door for a test of the late-March high crossing at .8327. Stochastics and RSI are bullish signaling sideways to higher prices into early-May are possible. PRECIOUS METALS June gold managed to close modestly higher due to a short-covering bounce ahead of the close. Momentum indicators remain bullish signaling that additional gains near-term are still possible if June can clear resistance crossing at 265.50. Closes below April's uptrend line crossing near 259 would signal an end to this month's corrective bounce. July silver extended Tuesday's loss but like June gold managed to close near session highs due to a short covering bounce ahead of the close. Nevertheless, this week's setback suggests that July silver will continue to extend this spring's trading range into early-May. Closes above 4.505 or below 4.31 are needed to confirm a trading range breakout. July copper soared to new highs for the month due to today's strong performance in the equity markets. Prospects for an improving economy due to the latest interest rate cut underpinned today's rally in July copper and confirmed the recent trendline breakout. The stage is set for additional gains with the late-March reaction high crossing at 80.15 marking the next upside objective. GRAINS May corn closed fractionally lower on Wednesday amidst conflicting planting ideas. The latest weather forecast are calling for additional precip across the Midwest, which could delay fieldwork. However, the latest planting progress report shows that corn planting thus far has progressed at an average pace. This week's setback has turned a number of momentum indicators neutral to bearish hinting that Monday's high might have marked a double top. Traders will be looking at Thursday's export sales report for near-term direction. However, bulls are not holding out much hope for a bullish sales report on Thursday. It appears that May corn will remain range bound between 2.15 and 2.02 1/2 for the time being until the market can get a better handle on planting progress and early growing conditions. May wheat posted an upside reversal on Wednesday as spring wheat planting delays offered mild support to the market. Additional support came from this year's winter wheat crop ratings, which remain well below last year's levels. Gains were limited as export demand remains quiet. Technically, momentum indicators remain bullish signaling that sideways to higher prices into early-May are possible. SOYBEAN COMPLEX May soybeans posted a key reversal up on Wednesday due to light fund buying and a tight cash market. May opened under pressure following weakness in overnight trading and posted a new contract low before a short covering bounce unfolded. Light support came from the latest weather forecast, which have taken some of the rain out of next week's outlook. May beans are at an important crossroads. Closes above 4.44 or below 4.26 1/2 are needed to clear up near-term direction in the market. July soybean meal also posted a key reversal up on Wednesday due to spillover strength from soybeans. Additional gains on Thursday are needed to confirm today's bullish reversal pattern. Momentum indicators remain neutral to bearish warning traders to use caution as closes above last week's high crossing at 154 are needed to renew the rally off the late-March low. LIVESTOCK June hogs closed sharply lower on Wednesday due to profit taking and spillover weakness from bellies. Weakness in the product market also weighed on prices. Losses were limited due to mostly steady cash bids as traders began to position themselves ahead of Friday's cold storage report. Today's low-range close leaves the door open for sideways to lower prices on Thursday. Momentum indicators are diverging and turning neutral to bearish warning traders that an important top may be in or near. June cattle settled lower on Wednesday due to rumors of cash bids of $77, which is down $2.00 from last week. Feedlot sources confirmed those rumors after the close, which sets the stage for a softer opening on Thursday. June cattle have spent the past three sessions consolidating above this year's shallow uptrend line crossing near 71.77. Multiple closes below this support level would renew the decline off March's high and open the door for a possible test of this year's low crossing at 70.52 later this spring. Stochastics and RSI are bearish signaling sideways to lower prices near-term are possible. FOOD & FIBER July coffee closed sharply higher on Wednesday due to short covering. Today's high-range close leaves the door open for additional gains on Thursday. However, upside potential appears limited ahead of the upcoming Brazilian harvest. July cocoa closed slightly lower on Wednesday as it consolidates around the 50% retracement level of this winter's rally crossing at 985. While momentum indicators remain bearish they are also diverging, which is a warning to bears not to press their hand at this time as a double bottom might have been posted with this week's low. Closes above 1020 are needed to temper the near-term bearish outlook in the market. July sugar closed lower on Wednesday filling Monday's gap at 800. A late session rebound tempered some of today's losses leaving July above this winter's downtrend line. Momentum indicators remain bullish however, closes above last week's high at 821 are needed to open the door for a larger-degree rebound this spring. July cotton posted a downside reversal on Wednesday after early strength due to short covering lead to a jab above minor resistance crossing at 48.90. However, July failed to attract follow- through buying on today's move to new highs as funds want to look at Thursday's export sales report before deciding weather or not to exit their short positions. Momentum indicators are very oversold warning bears not to press their hand at this time. Daily Extreme Commentary is brought to you by GLOBALcharts, INO.com's end-of-day charting software for Futures, Futures Options and Optionable Stocks. http://www.globalcharts.com Search the INO Store - http://store.ino.com/ _____________________________________________________________________ T O P N E W S _____________________________________________________________________ STOCKS Japan Stocks Review: Nikkei up 4.4% on Intel earnings, US gains http://news.ino.com/summary/?id=25125 Add2: US Equities Review: Stocks surge on surprise rate cut http://news.ino.com/summary/?id=25123 UK Stocks Review: FTSE doubles up after Fed inter-meeting cut http://news.ino.com/summary/?id=25130 FOREX US FX Review: Shock Fed rate cuts vault European currencies http://news.ino.com/summary/?id=25127 Asia FX Review: USD/JPY mixed in two way trading http://news.ino.com/summary/?id=25124 Europe FX Review: Dollar forges higher, but yen outperforms http://news.ino.com/summary/?id=25126 CREDIT US Credit Review: Substantial gains, buoyed by Fed rate cut http://news.ino.com/summary/?id=25122 Europe Credit Review: Bonds mirror equities on up-and-down day http://news.ino.com/summary/?id=25128 Japan Credit Review: Jun falls on stock gains, oversupply fears http://news.ino.com/summary/?id=25129 COMMODITIES US Futures Summary: Natural gas backtracks; palladium, cotton up http://news.ino.com/summary/?id=25131 EXCHANGES E-mini Nasdaq-100 Futures Post New Volume Record http://news.ino.com/press/?release=23504 ____________________________________________________________________________ E X T R E M E F U T U R E S ____________________________________________________________________________ Updated every 10 minutes around the clock. More at http://quotes.ino.com/analysis/extremes/futures/ WINNERS NDM1 NASDAQ 100 Index Jun 2001 1842.00 167.00 +9.99 NKH2 Nikkei 225 Stock Avg Mar 2002 14055 1000 +7.66 SGM1 S&P 500/BARRA Growth Index Jun 2001 615.00 30.00 +5.13 KCN1 Coffee 'C' Jul 2001 61.75 2.75 +4.66 ZDM1 Dow Jones Industrial Avg. Jun 2001 10720 475 +4.64 RM1 Russell 1000 Index Jun 2001 655.00 26.75 +4.26 SPM1 S&P 500 Jun 2001 1245.00 50.70 +4.24 DJM1 Dow Jones Industrial Avg. Jun 2001 10665 420 +4.10 MDM1 S&P Midcap 400 Jun 2001 496.50 19.00 +3.98 LBK1 Random Length Lumber May 2001 270.70 9.60 +3.68 LOSERS PAM1 Palladium Jun 2001 737.00 -26.50 -3.47 PBQ1 Frozen Pork Bellies Aug 2001 85.450 -3.000 -3.39 PNN1 Propane Jul 2001 0.5575 -0.0175 -3.08 CCH2 Cocoa Mar 2002 1030 -29 -2.80 HOU1 Heating Oil Sep 2001 0.7715 -0.0201 -2.58 SBK2 Sugar #11 World May 2002 7.50 -0.15 -1.99 XHM1 Lean Hogs Jun 2001 71.52 -1.42 -1.95 NGM1 Henry Hub Natural Gas Jun 2001 5.193 -0.093 -1.75 CTK1 Cotton May 2001 46.16 -0.82 -1.75 LHM1 Lean Hogs Jun 2001 71.525 -1.250 -1.72 ____________________________________________________________________________ E X T R E M E S T O C K S ____________________________________________________________________________ Updated every 10 minutes around the clock. More at http://quotes.ino.com/analysis/extremes/stocks/ WINNERS IOMT ISOMET CORP 7.76 2.98 +49.67 KOPN KOPIN CORP 7.42 2.38 +47.22 MM MUTUAL RISK MANAGEMENT 5.90 1.77 +44.58 IWOV INTERWOVEN INC 16.36 4.99 +43.89 PXLW PIXELWORKS INC 20.00 6.06 +43.19 MSLV METASOLV INC 12.52 3.56 +39.73 SBSE SBS TECHNOLOGIES 18.20 5.16 +39.57 SITE SPECTRASITE HOLDINGS 7.75 2.16 +39.06 ACTR Acterna Corp 8.65 2.34 +38.61 PRCM PROCOM TECHNOLOGY 8.55 2.59 +36.95 LOSERS CAE CASCADE CORP 9.72 -3.41 -25.62 TESS TESSCO TECHNOLOGIES 12.05 -3.43 -23.02 OBIE OBIE MEDIA CORP 6.70 -1.78 -21.19 NUI NUI CORP 22.40 -4.55 -16.88 GRKA GREKA ENERGY 11.50 -1.89 -14.55 CTAC 1-800 CONTACTS 18.98 -3.07 -13.87 PPD PRE-PAID LEGAL SVCS 15.25 -2.31 -12.97 SFC SFBC INTL 9.17 -1.33 -12.85 LVLT LEVEL 3 COMMUNICATIONS 13.06 -1.84 -12.35 DYII DYNACQ INTL 16.65 -2.22 -11.89 FREE MANAGED FUTURES & IRA RETIREMENT KIT http://www.ino.com/specials/icm/ _____________________________________________________________________ T H A N K Y O U _____________________________________________________________________ Thank you for subscribing to the Extreme Markets Daily Digest from INO.com ( http://www.ino.com/ ). If you want to subscribe to our other email services, or would like to modify your profile please visit http://www.ino.com/email/. To subscribe a friend, visit: http://www.ino.com/email/ To unsubscribe, visit: http://www.ino.com/email/remove/?email=alewis@ect.enron.com&list=evening -- Copyright 1998-2001 INO.com. All Rights Reserved.