Friday’s Futures Trading Outlook

Stocks suffered their worst losses in three
weeks. The culprits that scared today’s traders were weaker earnings and
more talk of war in Iraq. The futures were negative from the get go, with
Electronic Data Systems
(
EDS |
Quote |
Chart |
News |
PowerRating) issuing an earnings warning for Q3 & Q4. Then Jobless Claims & Housing
Starts came in weaker then expected. This continues to worry traders about the
pace of an economic improvement.

There was one small
piece of good news, but it wasn’t enough to bail out the markets. The Philly Fed
Index jumped to 2.3 (consensus was 2.0) from -3.1.

The Dec. S&P 500
(
SPZ2 |
Quote |
Chart |
News |
PowerRating) is breaking
down from a head-and-shoulders pattern on the daily chart. SPZ2 closed at
842.00, down 21.80, or 2.52%. The next support level is at 829.00.

High-tech was a drag on the major markets today,
and the Dec. Nasdaq 100 futures
(
NDZ2 |
Quote |
Chart |
News |
PowerRating) indicated this. From the open
of trade to the close, NDZ2 slowly and surely drifted off to close at the worst
levels of the day. The Nasdaq 100 for Dec. closed at 872.50, down 12.00, or
1.35%.

With the continued skepticism in the equity
markets, traders continue to flock to the Treasury markets. The Dec. 10-year
note
(
TYZ2 |
Quote |
Chart |
News |
PowerRating) rose .50 to close at 114.57, with the yield dropping to
3.84%. The Dec. 30-year bond
(
USZ2 |
Quote |
Chart |
News |
PowerRating) rose .59 to 113.37, and the
yield dropped to 4.74%.

Possible long candidates: