Tuesday’s Futures Setups

Momentum will frequently turn before price. Draw trendlines on the indicator
itself — if you do this, you’ll be in the small minority, trust me. Let’s just
keep it a secret among ourselves, shall we? You can see that when the momentum
trendline was broken at (A), price flattened out. The first momentum pullback,
(B) was a possible entry. Notice how the pullback occurred above the
trendline– this is important. And also that the trendline of the momentum (not drawn) is rising. The other possible entry here would be at the next
pullback at (C). Again, the trendline of the momentum itself (not drawn) is
rising. This is key, and crucial to getting this. Also, by the time we got to
(C), the moving average had flattened out, and had even started a mild upswing.

Now let’s look at this Corn chart:

Several things are lining up here: 1. we’re at the trendline that began at the
end of March; 2. we’re at a .618 retracement; 3. we’ve broken a trendline on
momentum; and 4. we’ve got some negative divergence on the momentum. 

Let’s bring it down to the 30-min time frame:

As you can see, price is increasing while the momentum tops are declining. This
is not set up yet, but it’s certainly one to watch.

Again, please let me know if this type of analysis is helpful to you. I’ve heard
from a few of you, but I want to be of assistance to the maximum number of
people. Feel free to call me at 888.484.8220 x242.

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.


Be advised that some futures contracts are prone to gaps.