How To Separate The Wheat From The Chaff
Certain patterns work out in all markets, and you should make sure you’re aware of the setups in order to identify the markets posing the best chance of moving in a calculated direction.
December wheat
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PowerRating) etched an outside bar yesterday that had closed on its highs at the intermediate-term time frame, but patterns (and the psychology underpinning them)
play out in all markets. Last night’s new Nightly Futures Report pointed out this setup. Wheat closed 6 higher at 294 1/2, its highest level since July.
The fundamental reasons fueling a rally (or decline) generally come to light after a market has already made its move. One factor potentially affecting global wheat supplies is flood conditions in a major world producer, Argentina. Millions of acres have been stricken in the central part of the country, which could eventually reduce supply as the crop rots or develops fungus.
Other grain contracts closed narrowly mixed.
T-bonds
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PowerRating) were primed for a pullback after breaking to new contract
high ground yesterday. Also from last night’s Futures Report, the December contract pulled back to test the 107-even to 107 4/32 area, a level that coincided nicely with a 38% retracement of its most recent swing. T-bonds are also on the Momentum-5 List.
Nasdaq 100 futures
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PowerRating) failed to get going above their initial burst and failed to close down significantly. In a pattern we have been seeing with greater frequency, look for the contract to trade lower Monday in a one-day delayed response to its Turtle Soup Plus One Sell pattern from today (in a Turtle Soup “Plus Two“ setup).
December cocoa
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PowerRating) left a reversal bar that bounced higher off the upper (unfilled) portion of a gap left back on
Sept. 20. Cocoa also left a Turtle Soup Plus One Buy signal and closed right at the trigger, up 8 at 995.