Friday’s Futures Setups

• November 27, 2002
• TradingMarkets Editors

The
pre-opening futures
pointed to a positive open, and several positive economic reports helped
propel the major future indices up. US personal income was up .1% in October
while consumer spending was up .4%. US jobless claims were down 17,000 last week
to 364,000, less than expected. This pushed the Dec. 10 year T-notes
(
TYZ2 |
Quote |
Chart |
News |
PowerRating)
sharply lower to 112 055, down -1 090, and the Dec. 30-year bond
(
USZ2 |
Quote |
Chart |
News |
PowerRating) fell -2 ’06 to 108 ’23. Today’s trading session as well as Friday’s
session was shortened.

The University of
Michigan’s consumer sentiment index was 84.2 in November, up from 80.6 in
October. The December S&P 500
(
SPZ2 |
Quote |
Chart |
News |
PowerRating) rose 26 points or 2.85 to
close at 938.00. The Nasdaq 100 for Dec.
(
NDZ2 |
Quote |
Chart |
News |
PowerRating) continued to power
higher, closing at 1124 up 36.50 or 3.36%.

US durable goods orders were up 2.8% in October, stronger than expected. March.
copper
(
HGH3 |
Quote |
Chart |
News |
PowerRating) ended up 1.95 at 75.70. In the chart above,
copper pulled back from its high to test the 20-day moving average. This is also
the key 50% retracement level. The strong move on Wednesday put copper above its
61.8% retracement level of .75 cents a pound. The next resistance point is at
.77 cents a pound. Some potential good news for the world economy? Industrial
demand is ordinarily the main driver of this market. It should surprise no one
that when demand for copper slacks off, copper prices drop, and the warehouses
accumulate inventory. When industrial demand picks up, prices rise, and the
stocks diminish. The whole idea of paying special attention to copper prices
gains credibility from the fact that because copper plays an important role in the
manufacture of a broad range of goods, copper purchase must occur
early in the process.

Possible
short candidates:

March cocoa
(
CCH3 |
Quote |
Chart |
News |
PowerRating) has broken below the 1723 trigger. On Wednesday cocoa ended up $16
at $1,703, spurred by reports that rebels in the Ivory Coast attacked government
forces in the western part of the country, ending the truce. Looking at a daily
chart, a break below 1680 could trigger another move to the downside. 1619 the
61.8% retracement level looks to be the next support level on a break below
1680.

Possible
long candidates:

The
Dec. S&P 500 E-Mini
(
ESZ2 |
Quote |
Chart |
News |
PowerRating) broke through the 84.1% retracement line at 933.978, the
short-term resistance level. This line was drawn from the Aug
high to the Oct low. A further move up from this level, will have the ESZ2 challenging the 940
area then after that the 950 area.

Feb. lean hog futures’
(
LHG3 |
Quote |
Chart |
News |
PowerRating) rally
on Wednesday not only centered on expectations of the monthly hog and pig
report, but hog cholera in South Korea and increased incidents of swine flu in
the western corn belts, according to Futuresource.com. If the swine flu
mortality estimates are correct, it could mean 5% fewer hogs, in addition to
fewer hogs projected by the last government quarterly hog report, during the
February to March time frame. A further rally could see the LHG3 test the 57.00
area.

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.

Use stops on all your trades.