Wednesday’s Futures Setups

US equity markets were down,
with the Dow down 79, the Nasdaq down 15, and the S&P down 8. U.S. wholesale
sales were up .4% in July. It looks like the dry western part of the Midwest is
finally getting some rain.

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

. 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

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.

Remember, use stops on all your trades.