Wednesday’s Futures Setups

Futures led the charge on the first
day of the last Quarter of 2002. US stocks rallied after Fannie Mae, the largest
home-mortgage buyer, reassured investors falling interest rates won’t crimp its
earnings and Verizon Communications
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said it will meet its 2002
profit forecast. At the end of trade, Dell Computer
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announced
that it will exceed earnings expectations for the third quarter.

In a separate newsworthy story, UN officials said Iraq agreed to terms for the
return of weapons inspectors, helping send the Standard & Poor’s 500
Index

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to its biggest gain since August and the Dow Jones
Industrial Average to its largest advance in more than two months. The S&P
futures for Dec.

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rallied strong to close above the 62%
retracement drawn from the July low to the August high. This is also above where
the 2.0 Volatility Band is on the S&P 500 cash index. SPZ2 closed higher by
39.50 or 4.85% at 854.10.

After hitting extreme lows yesterday, the Nasdaq 100 futures for Dec.
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rallied back strongly today, moving up by 6.29% to 886.50. the
Nasdaq 100 futures had a gain of 52.50.

US Treasuries dropped for the first day in three after Fannie Mae said it
increased its protection against falling interest rates. This is fueling
speculation the mortgage financier would buy fewer government securities.
Treasuries briefly pared losses as an industry report showed US manufacturing
contracted for the first time in eight months. Bonds are on the decline. The
10-year note for Dec.

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is trading at 115 070 down 220 and the
Dec. 30 year

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bond is trading at 113’10 down ’30.


Possible
short candidates:



Contract


Setup


Direction


Trigger

Dec. cocoa
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possible turtle soup plus
one sell


Down


break below 2100



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. Nov. crude oil

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possible turtle soup plus one sell

Down


break below 30.00

Dec. gold
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possible turtle soup plus one sell

Down


break below 320.00

Nov. heating oil

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possible turtle soup plus one sell

Down


break below .8000


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

Mar sugar
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Pullback from high

UP


break up above 6.60

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.