Monday’s Futures Setups

  • November 10, 2001
  • TradingMarkets Editors

The Japanese yen
(
JYZ1 |
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PowerRating) handled the .8300 area that should have
held it as support. The expansion bar yesterday was essentially the sixth
consecutive day of a rally, putting the yen on the Momentum-5
List. In a narrow day, the yen held near the expansion bar high (though at a
slight loss) and closed near the high. Look for an Off The Blocks. 


Canadian dollars
(
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in the Nov.
5 short setups, have imploded to new lows. However, they are completing the
initial target for a measured move (see the article Defining
Reward/Risk Ratios With Chart Setups) in the .6200 area. Consider covering
in this area for a reaction higher before a test down to the next objective of
.6141. Canadian dollars are on the
Implosion-5 List.

Euro FX futures
(
ECZ1 |
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waterfalled during the CME open outcry session. This market should resolve to
the downside; it has popped or started higher in each of the past seven days and
Friday could only manage a gain of five ticks. The euro FX should open lower and
move to new lows out of Friday’s intraday consolidating triangular wedge. If
that doesn’t occur, if we move higher ,than look for resistance and good risk to
reward entry at .8935 and again at .8950 through 57. Reassess above .8960.

What will happen with the euro FX is important due a 6/100 Low Volatility
signal in dollar index futures
(
DXZ1 |
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PowerRating) and Multiple Days Low
Volatility readings in the euro FX and Swiss francs
(
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Volatility differentials do not anticipate direction, just an outsized move. The
presumption is the downside trend will remain intact for the euro, particularly
in light of this week’s more aggressive half-point (rather than 25 b.p.) rate
cut by the ECB. Europe is behind the curve in stimulating its economy and that
slightly higher interest rates vis-à-vis the US — an attraction for investment
— will about equal out after expected higher inflation is factored in on the
continent. The 50% gains in US speculative equities (semis, bios, nets, and
networkers) off the September lows will also make dollar-denominated assets
appear more attractive than under performing euro-denominated assets. 

With all four contracts down their daily limit, there is little to be bullish
about in the meats. Large sell orders were said to remain unfilled.
December
live cattle
(
LCZ1 |
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PowerRating) and January feeder cattle

(
FCF2 |
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PowerRating) are the top two contracts on the
Implosion-5 List. Ole!

January soybeans
(
SF2 |
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PowerRating) traced another subtle lower high and
a
New 10-Day High. In the bean complex, soy meal
(
SMZ1 |
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PowerRating) is also
a  6/100 Low Volatility
market. Meal’s Nov. 2 hanging man bar portends a move downside. But an expansion
bar in corn
(
CZ1 |
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PowerRating) has taken it to a
New 10-Day Highs and December wheat
(
WZ1 |
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PowerRating) held at 281, leaving
Turbo Tails at the 38% retrace for a potential move up and out of its Pullback From Highs
setup. Grains move better when they move in concert, and could drag soy meal
along for the ride. 

Still short the Dec gold. See yesterday’s setups. 

 




Contract

 Setup
 Direction

 Trigger

Japanese yen
(
JYZ1 |
Quote |
Chart |
News |
PowerRating) 

 Momentum-5
List 		 
Up
Off The Blocks 
Canadian dollars
(
CDZ1 |
Quote |
Chart |
News |
PowerRating)		  Watch
.6200 support, then .6141.
 		Could
retrace before lower 
On
a pullback
Meats 
 Across
the board implosions
 Down 

 Opening
range trades  

 January soybeans
(
SF2 |
Quote |
Chart |
News |
PowerRating)
 New 10-Day
High

 		 
Up
 Off The Blocks.
Euro FX futures
(
ECZ1 |
Quote |
Chart |
News |
PowerRating)
 Implosive
tendencies 
 Down 

 .8918
on lower start. Or see resistances above.  
Wheat
(
WZ1 |
Quote |
Chart |
News |
PowerRating)		 Pullback From Highs,
held, leaving Turbo tails
 		Up 287

Define the risk before every trade and honor your stops.Â