Friday’s Futures Setups

Traders were looking for
a turnaround in the second half of trading, but it never came. In
fact it only got worse. The first half of trading for the S&P 500 and Nasdaq 100
futures was plagued by negative economic reports. What traders were looking for
was what happened the past two sessions — markets affected by bad economic
reports ended up rallying in the second half. They did not get it.

The Sept S&P 500 futures (SPU2)
fell to the 884 support area, which was the -2.0 Volatility Band level (885) on
the S&P 500 cash Index. SPU2 closed lower at 884.79 down 26.69 or 2.93%. There
were some key areas of retracement in today’s activity.

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On the Sept. Nasdaq 100 (NDU2),
Software ($GSO.X)
was the major contributor to the sell-off. The -2.0 Volatility Band (916) was
passed up by the closing bell. The NDX closed at 917 down 47.50 or 4.92%.

Nov. Soybeans (SX2)
had the biggest gain on the day after it was reported that hot and dry
conditions were forecast through mid-August, the same news that rallied soybeans
higher on Wednesday. According to forecasters, nearly half of the soybean belt
will see crop pressure associated with the extreme heat and the drier areas will
see some crop losses. Soybeans for Nov. rose 4 1/2 to $5.41 a bushel. Soybeans
pulled back from the high to test the 50-day moving average. It has now rallied
up above the 20-day moving average. Look for a break above the 5.60 resistance
level.

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