Thursday’s Setups

The trend is your friend but when will it end? Obviously
cotton traders are asking themselves that question as the fiber plunges to a new
15-year low.
December cotton
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 has
had only six higher weekly closes this year! But anything is
possible in the markets, including taking out the 1972 all-time low (futures) of
26.82. Although the contract trades for only 90 minutes a day due to the
destruction of Lower Manhattan — between 1:30 and 3:00 PM ET — aggressive
traders may want to consider a long position as the market is very oversold
after a five-day losing streak and hit a key extension level (support) at 28.59.
This suggests a short-term reversal (up) before being magnetized to the all-time
low level in the 26.82 area.  

As mentioned recently, March 2002 sugar
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 continues
to display signs of momentum. Another market with shortened trading hours (11:30
to 12.55), sugar hit a 10-day high, making it eligible for an Off The Blocks
long. 

In currencies, a head and shoulders top (and break below the neckline) in the
yen
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continues to weigh heavy on the Japanese unit. This is
an Implosion
market, also eligible for an Off The Blocks,
only short. 

Looks like the third time may be a charm for


unleaded gasoline

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. The .6090 to .6110 level specified
as resistance in Monday’s
Report
has been hit, but not broken, for the third straight day. Today’s
higher close outside bar (or near outside bar) (in all of the major energy
contracts too)  suggests unleaded is primed to break this level and
continue to “.6235 and .6330.”

Natural gas
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(also from Monday’s Setups) continues to
impress with its 11% move today. Big momentum here. 

Finally, bonds broke the 106 21/32 area that
was maintaining the bearish argument in this market. Look for contract highs,
which were nearly achieved today on a more than one point rally. Big economic
reports day Thursday as well. Euro zone monetary policy (interest rates), durable goods, jobless claims,
employment cost index, and existing home sales are slated for release
tomorrow. 

Contract

Symbol
Setup
Direction

Trigger
Cotton


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 Counter-trend,
over sold, held at support

 
Up, short-term
Against
28.91 low. Tight Stop. Next support at 28.35-60.


Sugar



  


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Nascent momentum
continuing

Up


OTB or intraday
pullback

Japanese


yen


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Implosion



market
Down 

OTB 



U
nleaded gasoline



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.

Poised
to break resistance
Up


Above .6110
pivot

Natural gas  

 
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Raw momentum
Up

OTB 



T-bonds



 

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 Break of
key level


Up


Intraday
pullbacks such as at 106 28/32 — 31/32 support























 

Be wise. Do not enter a trade without a defined plan of where to exit if you’re wrong.