Wednesday’s Futures Setups
An up day, but very
disappointing in the end. However if you are a sequence trader and trade
both sides of the market it was an opportunity type trading day. Stock opened
higher as a bounce after the large sell-off yesterday. The positive tone led to
a surge in the indices around 10:30 A.M. ET when Federal Reserve Vice Chairman
Ferguson hit the wires with generally upbeat comments about the economic
outlook. The Dec. S&P 500
rallied all the way up to the 1.50 Vol Band and formed a 1,2,3 top. The reverse
dropped it down to the lows of the day. SPZ2 closed at 884.79 up 7.40.
December wheat futures
rallied early and then sold off today despite a bullish monthly USDA supply and
demand report. Any time a market sells off in the wake of bullish fundamental
news, that is a warning signal to holders of long
positions. In the chart above, on the daily bar chart wheat is having a hard
time holding prices above the key 40-day moving average. This is the moving
average that the “commodity funds†like to watch very closely. Bulls will gain
significantly more power if they can push and close prices above the October
high of $4.18 ¾. The bears will pick up some good momentum if they can push and
close prices below the $3.70 level. A drop and close below the October low of
$3.60 would put holders of long positions in serious trouble.
Possible
short candidates:
| Contract |
|
|
|
|
|
Possible Turtle Soup Sell |
down |
break below
|
|
Dec. lean hogs
|
|
|
|
|
|
|
|
|
Possible
long candidates:
|
|
|
|
|
|
Jan. frozen orange juice |
Pull back from the high |
up |
break above 102 |
|
Dec coffee |
|
up |
Trade above 67.00 |
|
Dec. gold |
Break above 20-day high |
up |
Trade above 321.00 |
| Mar. sugar ( SBH3 | Quote | Chart | News | PowerRating) |
|
up |
Trade above 7.60 |
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.