Thursday’s Futures Setups

The big news today
that moved all of the markets was that Iraq has accepted the Security
Council resolution setting terms for unconditional weapons inspections and
threatening “serious consequences” for non-compliance. Iraq’s ambassador to
the UN made the announcement. From that point, markets either dropped or rose,
depending on how the news would affect them. The market that was probably
impacted the most was the energies.

Energy dropped in price
across the board on the news. Crude oil for December delivery
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CLZ2 |
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PowerRating)
broke below its 25.00 support line before closing at $25.17 a barrel. This was a
decline of .72 or 2.78%. Prices have dropped 16% since the end of September on
reduced chances of a US military attack on Iraq. The trading range has been
between $25.00 and $30.00. The drop in crude set the tone for other energies.
Looking at the chart above, the blue shorter-term moving average is the 9-day
SMA and the red is the 18-day longer-term SMA. The 9-day crossed below back in
Oct, signaling the break down in price. If Saddam–and that is a big “IF”–doesn’t
play games, crude could fall below the $24.00 support level to around $21.00 a
barrel.

Possible
short candidates: