May 25th, 2018 - Issue #921

In This Issue

1. Futures Trading 201: COT Commitment of Traders Report
2. Hot Market Report: Crude Oil and the Energy Sector
3. Economic Calendar

Memorial Day Hoiliday this Monday. Markets will have modified trading hours and some are closed on Monday.

1. Trading 102: Commitment of Traders Report - What Lies beneath

In this 24 page PDF booklet, Gary Kamen of Trends in Futures reviews the commitment of traders report, what it means, how traders can utilize it and much more.

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2. Hot Market Report: Crude Oil and the Energy Sector

Click on image below to enlarge

Crude Oil futures, along with other energies, enjoyed a choppy ride up these past few weeks on the heels of mideast tensions, Iran nuclear deal, trade truce with China and more
Daily chart of crude oil for you review from this morning ( May 25th 2018). We got a possible sell signal in the shape of a red diamond. That signal appears when the ALGO "thinks" the market is extremely overbought and has a chance to reverse. I normally like to use this signal for a swing trade of 1-5 days. The longer term time frames still suggest we have more room to go to the upside. In general the energy sector been in backwardation ( i.e. the front months are trading higher than the back months) Normally this points out a tighter, short term market and can push prices higher. That being said....My colleague has pointed out to me that both in 2007 and 2014 the energy sector was in backwardation before a big correction took place..... To access a free trial to the diamond ALGo shown in the chart as well as other signals sign up for a free trial for 21 days with realtime data.
Crude Oil Futures Specs
Hours: 5:00 PM to 4:00 PM next day PM Central Time
Margins: $2560 initial, $2200 Maint. ( as of the date of this newsletter)
Point Value: full point = $1000 ( Example: 71.80 to 72.80 ). Min fluctuation is 0.1 = $10 ( Example: 71.80 to 71.81)
Crude Oil is one of my favorite markets for Day Trading because of the intraday voilatility and movements. Be careful, these factors can work against you or in your favor.
Some of the basic fundamentals to keep in mind when you are considering a trade in the crude oil as well as other energies:
1. Longer term view of current market prices
2. Dates and times of important reports. Namely, Tuesday afternoon report (API) and the DOE report on Wednesday mornings at 10:30 Am EST
3. Weather and Seasonality
4. Correlation to US Dollar prices
5. Inflationary prospects
6. Geopolitical Stability
7. U.S. Fiscal and Monetary Stability

Our brokers here at Cannon will be happy to chat about the crude olil market, other energies, other futures, options, futures spreads and much more! Feel free to contact us at any time.

3. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!