Setups To Focus On For Monday
The Japanese yen
(
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PowerRating) again failed for a second day to make
any headway into the 10/22 gap. A head and
shoulders top looms and the 50% retracement of its Oct. 8 to Oct. 25 swing held
again as resistance. This contract remains a Pullback
From Lows setup with the daily trigger coming at Friday’s low of .8212. The
.8200 area is also pivotal.
Although you would have been whipped out of an Off The Blocks
had you noticed (and traded the) British pound’s
(
BPZ1 |
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PowerRating)
ascension to the Momentum-5
List today, the powerful daily bars this week suggest the pound will
break to new multi-month highs. Consider OTB longs again.
Gold has significant resistance at yesterday’s 282.3 high — a close,
defined-risk stop-loss area for a short. Gold is also a nine-day Pullback From
Low setup. Putting these factors together with its Multiple Days Low
Volatility reading sets up the the chance to participate in a
larger-than-normal move with a downside edge and a close stop. Gold has been up
on safe-haven buying. There are significant deflationary forces at work on the
global scene, a negative for the metal known as an inflation hedge. Trigger =
280.4, or short on the open if below 282.3.
December
live cattle
(
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PowerRating) have failed to close above resistance
or the 10/12 downside expansion bar that defines the downside momentum argument.
Lives also branded an outside day/expansion bar on the daily chart. This implies
lower lows below Friday’s 67.250 low.
Yesterday’s
outside, expansion bars in November soybeans
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PowerRating) and
soy meal
(
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PowerRating), occurring at 10-day highs defines the upside
argument for beans. Although today’s hanging man candlesticks in both are
troubling (they suggest a change in the immediate trend), the contracts still
closed near Thursday’s highs, maintaining the view of additional upside, and for
beans to attempt closing the huge overhead gap. These contracts both closed just
above intraday support. Although a lower start in these contracts would normally
delay an Off The Blocks
long entry until beans and/or meal traded above the high of the last hour
of trading on Friday, a slightly down open that holds at 432 3/4 and at 164.0,
respectively, could provide a defined-risk, earlier shot at getting on board
potential upside momentum here. (Protective stops go right below these
levels).
There is a mixed message in stock index futures. Blue chip equity index
futures — S&P futures
(
SPZ1 |
Quote |
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News |
PowerRating) and
Dow futures
(
DJZ1 |
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PowerRating) — have failed to close above the level they were
at prior to the 9/11 shocker. That level is 9665 and 1101.40, respectively.
December Nasdaq 100 futures
(
NDZ1 |
Quote |
Chart |
News |
PowerRating), on the other hand, have
successfully held above this chronological milestone, but have done so, in part,
due to volatility in the SOX index and in relief of Microsoft’s
(
MSFT |
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PowerRating)
apparent early anti-trust settlement. This price action suggests further
decoupling of tech and the blue chip order.
Still, the index futures are gleaning intermediate-term head and shoulders
tops with the 10/26 Turtle Soup Reversal “head” Bars dominating. A
failure to get above the 10/26 head suggests a test of the 9/21 lows. The
above-mentioned decoupling factor may imply certain sectors within tech will out
perform blue chip stalwarts — or not tumble as severely. Abysmal economic
statistics this week are only the beginning indications of a recession, the
severity and length of which will be in large measure be predicated on how fast
businesses continue to cut payrolls. Bush, Ashcroft, Ridge & Co. continue to
warn of “credible” terrorist threats. Not to be alarmist, but consider
the economic havoc caused by 9/11. Another unseemly even could also have equally
grave economic consequences and would likely send equity futures into a
tailspin.
|
Contract
|
Setup |
Direction |
Trigger |
Japanese yen ( JYZ1 | Quote | Chart | News | PowerRating) |
Pullback From Lows |
Down |
.8212 |
British pound ( BPZ1 | Quote | Chart | News | PowerRating) |
Momentum |
Up |
Off The Blocks |
Gold
|
Resistance holding, Pullback From Lows, Volatility setup |
Down |
280.4 |
| Soybeans ( SX1 | Quote | Chart | News | PowerRating) |
|
Up |
Off The Blocks or at 432 3/4. |
Meal ( SMZ1 | Quote | Chart | News | PowerRating) |
Momentum | Up |
Off The Blocks or at 164.0 |
| Blue chip stock index futures: ( SPZ1 | Quote | Chart | News | PowerRating) and ( DJZ1 | Quote | Chart | News | PowerRating) |
Failure to clear Turtle Soup “Heads.” |
Down |
Bearish below 10/26 highs. Looking for intraday pullbacks. |