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June 7th, 2019 Newsletter

Commitment of traders report along with eurodollar and bonds analysis

June 7th, 2019 - Issue #968

In This Issue

1. Trading 102: Commitment of Traders Report - What Lies beneath
2. Hot Market Report: Financial Futures ( Bonds, Eurodollars) have Spoken!
3. Economic Calendar

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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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* History of the COT report
* Why is this report important?
* The new COT report
* How can you use the information in this report?
* And much more....

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2. Hot Market Report: Financial Futures ( Bonds, Eurodollars) have Spoken!

By John Thorpe, Senior Broker

Click on image below to enlarge

ZB futures;
Back on may 24th the first time the ZB traded all day above the 150.00 mark. We suggested the market entered a new trading zone . The Market quickly fulfilled it’s promise within 10 trading days

With an intensifying global economic disjointing underway, Price action on the stock, energy, metals and currency markets not to mention the forsaken farm belt participants demand side drag in the name of global fair trade, dynamic changes and opportunities should continue to allow traders flexibility in trading among all of the futures classes. The Eurodollar, The Grand Champion of futures open interest and Volume year in and year out at the CME is also a proxy for Interest rate changes whose POTENTIAL for changes by Central Banks are what is currently moving markets significantly.

To the right, is a continuation chart with both the ZB (30 yr Bond Futures)and GE (Eurodollar Futures)

Record Volume at the CME in Eurodollar Futures Options the past 4 days. You can use the long EURO$ (Symbol GEU19 for the September contract) to hedge your long stocks or any other Central bank sensitive assets. (notice Bond prices never broke below the Euro Dollar on the chart above)

Open Interest

Over 4.5M contracts of open interest were added, pushing total OI to a new high of 67.8M with notable gains in the 97.500/97.625 EDU9 puts and 98.125/98.250 EDU9 calls. The Eurodollar can have a higher interest rate attached rather than US Dollar deposits in US Banks. Simply put Eurodollar deposits as US Dollars deposited outside of the US ANYWHERE, not just in the Eurozone, Call ‘em offshore US Dollar holdings. Like the U.S. Treasury market, these markets tend to move in anticipation of central bank moves thereby impacting the price of assets around the globe, These are tremendous trading vehicles and you can trade a lot of size in these markets. As with any trade, Risk management will be key, please speak with one of our brokers who can assist you with techniques to trade the most liquid futures market at the CME,: Eurodollar Futures. GE futures; Bonds are a very liquid market with a relatively LARGE tick size of $31.25. This market offers different type of day-trading vehicle. Different behavior and personality. I like to look for set ups in this market and the 10 year notes in different ways. One is trying to "SCALP" the large tick size and the other, which I prefer is to look for "longer day trades " using the 15, 30 and 60 minutes charts. If you are a day-trader, you may want to watch this market, get a feel for the different type of trading it offers versus Indices or crude oil for example and see if it is a "worthy" market to add to your day-trading markets list. It goes without saying that bonds are an excellent market for options, swing trading and long term trading as well with 23 hours trading, strong volume and excellent liquidity. To access a free trial to the ALGOS shown in the chart visit and sign up for a free trial for 21 days with real-time data.

30 yr Treasury Bond Futures Specs
Hours: 05:00 PM previous day to 4:00 PM Central Time
Margins: $2530 initial, $2300 Maint. ( as of the date of this newsletter)
Point Value: full point = $1000 ( Example: 144.16 to 145.16 ). Min fluctuation is 0.01 = $31.25 ( Example: 144.16-144.17) Settlement: Physical Delivery
Months: Quarterly (March,June,Sep,Dec)
Weekly Options:YES

Some of the basic fundamentals to keep in mind when you are considering trading the U.S. 30yr Treasury Bonds for this matter:
1. Interest Rates.
2. FOMC Rate decisions and Language
3. Focus in macroeconomics
4. Bond Prices have an inverse relationship to Interest rates
5. Correlation to US Dollar prices
6. Inflationary prospects
7. Geopolitical Stability
8. U.S. Fiscal and Monetary Stability

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

3. Economic Calendar

Source: Moore Research Center, Inc.

Date Reports Expiration & Notice Dates
06/07
Fri
7:30 AM CDT - Nonfarm Payrolls(May)
7:30 AM CDT - Ave Hourly Earnings & Workweek(May)
7:30 AM CDT - Unemployment Rate(May)
9:00 AM CDT - Wholesale Inventories(Apr)
2:00 PM CDT - Consumer Credit(Apr)
LT: Jun Canadian Dollar Options(CME)
Jun Currencies Options(CME)
Jun Live Cattle Options(CME)
Jun Mx Peso Options(CME)
Jun US Dollar Index Options(ICE)
Jul Cocoa Options(ICE)

06/10
Mon
3:00 PM CDT - Crop Progress
 
 
 
FN: Jun Live Cattle(CME)
LT: Jul Sugar-16(ICE)
 
 
06/11
Tue
7:30 AM CDT - Core PPI & PPI(May)
11:00 AM CDT - WASDE Report & Crop Production
3:30 PM CDT - API Energy Stocks
FN: Jul Sugar-16(ICE)
 
 
 
06/12
Wed
6:00 AM CDT - MBA Mortgage Applications Index
7:30 AM CDT - Core CPI & CPI(May)
9:30 AM CDT - EIA Petroleum Status Report
1:00 PM CDT - Treasury Budget(May)
2:00 PM CDT - Dairy Products Sales

 
 
 
06/13
Thu
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - Export(ex-ag) & Import(ex-oil) Prices(May)
9:30 AM CDT - EIA Natural Gas Report
3:30 PM CDT - Money Supply
LT: Jun Nikkei(CME)
Jun Nikkei Options(CME)
Jul Coffee Options(ICE)

06/14
Fri
7:30 AM CDT - Retail Sales(May)
7:30 AM CDT - Retail Sales Ex-Auto(May)
8:15 AM CDT - Industrial Prod & Capacity Util(May)
9:00 AM CDT - Business Inventories(Apr)
9:00 AM CDT - Univ of Mich Consumer Sent-Prelim(Jun)
LT: Jun Lean Hogs(CME)
Jun Lean Hogs Options(CME)
Jul Cotton Options(NYM)
06/17
Mon
7:30 AM CDT - Empire State Manufacturing(Jun)
11:00 AM CDT - NOPA Crush
2:00 PM CDT - Net Long Term TIC Flows(Apr)
3:00 PM CDT - Crop Progress
FN: Jul Cocoa(ICE)
LT: Jun Currencies(CME)
Jun Eurodollar(CME)
Jun Mx Peso(CME)
Jun US Dollar Index(ICE)
Jun Eurodollar Options(CME)
Jul Crude Lt Options(NYM)
Jul Sugar-11 Options(ICE)
06/18
Tue
7:30 AM CDT - Building Permits & Housing Starts(May)
3:30 PM CDT - API Energy Stocks
 
 
LT: Jun Canadian Dollar(CME)
 
 
 
06/19
Wed
6:00 AM CDT - MBA Mortgage Index
9:30 AM CDT - EIA Petroleum Status Report
1:00 PM CDT - FOMC Rate Decision
2:00 PM CDT - Dairy Products Sales
LT: Jun 10 Year Notes(CBT)
Jun Bonds(CBT)
Jul Platinum Options(NYM)
Jul Palladium Options(NYM)
06/20
Thu
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - Philadelphia Fed Index(Jun)
9:00 AM CDT - Leading Indicators(May)
9:30 AM CDT - EIA Natural Gas Report
3:30 PM CDT - Money Supply
FN: Jul Coffee(ICE)
LT: Jun S&P 500(CME)
Jul Crude Lt(NYM)
Jun S&P 500 Options(CME)
FN=First Notice, OE=Option Expiration, LT=Last Trade

Disclaimer: This calendar is compiled from sources believed to be reliable. Moore Research Center, Inc. assumes no responsibility for any errors or omissions. It is meant as an alert to events that may affect trading strategies and is not necessarily complete. The release dates for certain economic reports may have been rescheduled.

* 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!

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