Monday’s Futures Setups

The futures opened lower and then ended the
day on a sour note
, closing near the lows. The Nasdaq Composite ($COMPQ) was
trading just below the session and weekly highs most of the day, battling to
stay above key support around 1200. The Dec. Nasdaq 100
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closed just above the worst levels of the day at 861.50 down 10 or 1.15%.

The S&P 500 cash Index lost 27.59, or 3.2% to 827.36. General Electric, Philip
Morris and Wyeth were responsible for 15% of the loss. The Dow declined 295.67,
or 3.7%, to 7701.45. The Nasdaq Composite Index dropped 22.53, or 1.8%, to
1199.08.

For the week, the S&P 500 lost 2.1%, the Dow 3.6% and the Nasdaq 1.8%. The
benchmarks’ last weekly gains came Aug. 23.

The Dec. S&P 500 futures
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dropped 3.38% closing near the lows of the day at 825.29 down 28.28.

The declines in the markets are showing that
investors are concerned that the expected rebound in corporate earning may not
happen.

The Dec.
10-year Treasury note

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closed at 115 090 up 185 and the
30-year bond for Dec.

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rose ’23 to 113 23. These were six-week
gains as some investors anticipated a weak economic recovery will prompt the
Federal Reserve to cut interest rates before year-end.


Possible
short candidates:



Contract


Setup


Direction


Trigger

Dec. cocoa
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possible turtle soup plus
one sell


Down


break below 2000



Dec. 30-year bond
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possible turtle soup plus one sell


Down



break below 112^00


Sept 10-year note
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possible turtle soup plus one sell

Down




break below 114

Dec. cotton
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Pullback off of the
low

Down


break below
43

Dec. Nov. crude oil

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possible turtle soup plus one sell

Down


break below 29.00

Dec. gold
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possible turtle soup plus one sell

Down


break below 325.00

Oct. heating oil

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possible turtle soup plus one sell

Down


break below .7800


Possible long candidates:








Contract


Setup


Direction


Trigger


Dec. wheat
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Pullback from high


Up



break above 4.06


Soybean Meal
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Pullback from high


Up


break above 184

Dec. corn
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Pullback from high


Up



break above 2.80

Nov. frozen orange juice
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Pullback from high



Up



break above 103

Oct. live cattle

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Bullish Flag Pattern

UP

break above 70.20

Oct. feeder cattle

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Saucer Pattern

UP

break up above 81.60

Please note that while there are
strong trends, one bar or a series of bars forming a setup can sometimes
indicate a contra move for the next day. This contra move may not be
long-lasting — maybe only for a day or two. Trading with the main trend is
always the highest probability trade.

Use stops on all your trades.