Tuesday’s Futures Setups

Long
Candidates:

The Canadian dollar
(
CDH3 |
Quote |
Chart |
News |
PowerRating) made new highs again, with a wide-range
bar. It’s overbought, but could still move higher. Very tough to pick a top, but
just be aware a short-term top is possible.

Bonds
(
USH3 |
Quote |
Chart |
News |
PowerRating) and 10-year notes
(
TYH3 |
Quote |
Chart |
News |
PowerRating) pulled back,
and are still near the top of large triangles.

Corn
(
CH3 |
Quote |
Chart |
News |
PowerRating) and possibly Wheat
(
WH3 |
Quote |
Chart |
News |
PowerRating) may be setting up soon.
Corn is at the 84.1% retracement, and is pretty oversold. Again, I’m not trying
to pick a bottom — it’s better to look for some sign of strength (i.e., an
up-day) — but it’s also good to be ready for a potential reversal. Soybeans
(
SH3 |
Quote |
Chart |
News |
PowerRating) are trading in an ascending triangle, and a breakout above it would be
bullish.

Coffee
(
KCH3 |
Quote |
Chart |
News |
PowerRating) may be setting up soon, too. It’s oversold, and
it’s the third time at this level.

Short
Candidates:

Cocoa

(
CCH3 |
Quote |
Chart |
News |
PowerRating) is trading in a pullback from lows off that nasty 2/20 bar.

We may have a short-term top in
Copper
(
HGH3 |
Quote |
Chart |
News |
PowerRating). Today was its first down day in five, closing at its
78.6% retracement. This one is tricky, as the trend may carry it to the recent
highs. I feel it’s best to look for a 1,2,3 reversal pattern for entries.

Natural Gas
(
NGH3 |
Quote |
Chart |
News |
PowerRating) spiked on sub-zero temperatures
in the Central Plains, and rumors are that inventories may hit new lows. The
question here obviously is: How much higher will natural gas go? It is
overbought on both daily and weekly charts, so a pullback could be in the
offing, but this is a very strong trend, one that you don’t necessarily want to
get in front of.

Cotton
(
CTH3 |
Quote |
Chart |
News |
PowerRating) gapped down, below its 200-day moving
average. These are tricky, as the oversold situation may provide a short-term
bounce — or, more selling comes in immediately. A 1,2,3 pattern is probably
your best entry here, as well.

Here are the intraday numbers for the E-minis (ESH3):

Please
note that while there are strong trends, one bar or a series of bars
forming a setup can sometimes indicate a contra move for the next day.
This contra move may not be long-lasting — maybe only for a day or
two. Trading with the main trend is always the highest probability
trade. Be
advised that some futures contracts are prone to gaps.