Monday’s Futures Setups
T-bonds, cocoa, and crude (energies) have been the markets of the week, going
parabolic — but in opposite directions.
T-bonds
(
USZ1 |
Quote |
Chart |
News |
PowerRating) blew through support levels suggested last night,
including the 105 5/32, 50% retracement of its run since last May. Bonds kept
trading lower in the Eurex session
(
ZBZ1 |
Quote |
Chart |
News |
PowerRating), and rebounded from the next
level at 104 21/32-22/32. Next, consider 104 11/32-6/32 for a reaction to the
selling. T-bonds were in last week’s Friday’s
Futures Setups.
March cocoa
(
CCH2 |
Quote |
Chart |
News |
PowerRating) gapped above yesterday’s high and anticipated
resistance, negating the theory that 1245 would contain this market. If you
played the dynamics right in this market, then an Off The Blocks
long worked out here instead. This market has not done anything wrong, so it
remains a Momentum-5 leader and another Off The Blocks Long Monday.
(Crude was in this Thursday’s
and last Friday’s
setups).
A reversal-of-a-reversal pattern was pointed out in last Thursday’s
Futures Setups in January soybeans
(
SF2 |
Quote |
Chart |
News |
PowerRating), which rallied to
nearly close the 10/12 gap. Until this market indicates otherwise, it remains a
long.
December wheat
(
WZ1 |
Quote |
Chart |
News |
PowerRating) caught on late in the session to close at
a
New 10-Day High List. This sets it up for an Off The Blocks
long Monday.
There is a little trick in dealing with markets that gap (like currencies)
when trying to calculate how far they could pull back. As discussed last week,
price action in euro FX futures
(
ECZ1 |
Quote |
Chart |
News |
PowerRating) has been down. The 11/13
bar works to confirm this and we are still in the bottom half of its range. In
reference to calculating the retracement from the most recent high on 11/1,
subtract the gap, the difference between the 11/8 low at .8894 and today’s high
at .8856. This equals 58 ticks. Move your Fib retracement “high” down
58 ticks (to .9013) from the 11/1 high at .9104 to get the retracements that exclude
the unfilled gap. The 38.2% level from this most recent
significant swing comes right at today’s high. This is day-two of a Pullback
From Lows, increasing the likelihood of another day of backing and filling since
markets often work in threes. This means we could re-test this area. Hence,
below .8854 could provide another opportunity to get on a southbound train.
Natural gas
(
NGZ1 |
Quote |
Chart |
News |
PowerRating)
closed just below its
Turtle Soup Plus One Buy trigger from today. We like a Turtle Soup Buy
signal at a contract low in this market going into winter. “Cheaters”
on the pure Turtle Soup Plus One setup setup will already have gotten in on
essentially a weekly TS+1. Consider getting a jump on this setup at 2.610, but the prior 20-day low trigger
comes at 2.625. Other energy markets will likely back and fill, as OPEC has plans
to talk to Norway this week about cutting its oil output.
|
Contract
|
Setup |
Direction |
Trigger |
( USZ1 | Quote | Chart | News | PowerRating) |
Reaction rally anticipated |
Up |
104 21/32 |
| Cocoa ( CCH2 | Quote | Chart | News | PowerRating) |
Unrequited Momentum |
Up |
Off The Blocks |
( WZ1 | Quote | Chart | News | PowerRating) |
New 10-Day High |
Up |
Off The Blocks |
| Euro FX futures ( ECZ1 | Quote | Chart | News | PowerRating) |
back to gap-modified level |
Below .8854 |
|
Gas ( NGZ1 | Quote | Chart | News | PowerRating) |
Turtle Soup Plus One Buy |
Up |
2.625 (or sooner) |
| Â | |
|
|
Define the risk before every trade, and honor your stops.