Wednesday’s Futures Setups

After yesterday’s reversal, bonds attempted a late-day rally. You can see that
there were two possible trendlines to draw on momentum, both of which provided a
decent entry. The other aspect here is the double bottom on the indicator. Try
things like this — experiment.

 

I saw the guy talking about cattle on CNBC again today. Maybe you saw him too —
the guy with the beard and bow tie? He’s a futures analyst for one of the
houses. Anyway, he again said that the demand for cattle was out of control.
Call me cynical, skeptical, jaded — whatever, but when I hear things like this,
it’s a red flag to me. Today’s shooting Star on cattle MAY be a top. September
Wheat on 8/18 worked quite well, if you’ll recall. Now, this is a risky short
as cattle has very strong momentum, but I do think it’s worth watching. Bring it
on down to your lower time frames and draw the momo lines. I do things like draw
trendlines over the momentum tops. Look for

1,2,3s. Keep this on your watchlist.

Still in the meats, pork bellies made a pretty bearish bar. When you see this,
you have a pretty good idea that the bears are winning out — at least for the
very short term.

 

We’re up against this line again in Beans on the daily.

 

On Soy meal, we’re close to a possible double top — on decreasing momentum.

 

The longer term chart of sugar is sick, but on this 30-min chart, you can see
that we may be setting up for a long. On the daily, we closed in a doji
(indecision).

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.