THE PACIFIC COMMODITY LETTER
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360-289-9441(March 12, 2000) ENERGY COMPLEX: Nothing much new with the energies except that they are driven by the headlines...and continue in their uptrends. Very volatile; some of my very stubborn students are still holding longs in unleaded and heating oil...they must be using very loose "stops."
Natural gas futures stalled at resistance Friday, despite higher cash bids. March was strong as forward spreading was evident (buying the nearby and selling the future). April declined slightly despite March's strength. Mild weather helped prices ease. Now it is a matter of buying-for-the-summer strength against weakness from the spread and the weather. The technical strength as support held this week was very positive for the market.
On the April chart, stochastics are bearish in all time frames; RSI is below 60%; direction and momentum indicators are all bullish and 9- and 18-day moving averages remain in the "buy" mode with wide divergence. I would recommend looking at cycle turns only if you like intra-day trading; they "work," but the turns are short and swift. For example, Thursday's binge from the low 2.670 to the close, 2.786 was very substantial, but only a buy at the close, watching that gap higher and a short sale at 2.840 intra-day, leading to a close at 2.774 would have succeeded. Other day-traders take note of this market; the range and "bang for the buck" is considerable.
Martin B. Miller
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