April 13th, 2018 Newsletter

Cotton Market Chart Outlook along with key information about cotton futures market. Also an article about "what the big boys are up to", review of the Commitment of Traders Report ( COT) and what it means.

April 13th, 2018 - Issue #917

In This Issue

1. Commitments of Traders: What are the Big Boys Up To?
2. Hot Market Report: Cotton
3. Economic Calendar

1.   Commitments of Traders: What are the Big Boys Up To? 

By Jim Wyckoff


I have discussed in past articles how volume and open interest can be used to help identify and confirm market situations and trading opportunities. I'll take open interest one step farther in this column by examining the Commitments of Traders (C.O.T.) report, issued by the Commodity Futures Trading Commission (CFTC).

The C.O.T. report is released bi-weekly--every other Friday afternoon. There is also a C.O.T. report issued on the following Mondays that includes futures and options data. However, this report is not as closely followed as the Friday afternoon report that covers only futures, because the combined futures and options report has less history.

The CFTC requires futures traders and hedgers who hold market positions larger than the CFTC's required reporting levels to report their positions on a daily basis. This is how the C.O.T. report is derived.

The C.O.T. report breaks down by open interest large trader positions into "Commercial" and "Non-Commercial" categories. Commercial traders are required to register with the CFTC by showing a related cash business for which futures are used as a hedge. The Non-Commercial category is comprised of large speculators--namely the commodity funds. The balance of open interest is qualified under the "Non-reportable" classification that includes both small commercial hedgers and small speculators.


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2. Hot Market Report: Cotton Futures

By John Thorpe & Ilan Levy-Mayer, Senior Brokers

Click on image below to enlarge

cotton futures; Cotton, grains and a few other commodities been impacted with short term volatility as "trade war talks and talks about tarrifs" are heating up between the US and China.
Daily chart of cotton Futures for your review above. It seems that the market "relaxed a bit of the tarrif fears" and is now trying to resume an uptrend move and possible test recent highs. I got a buy signal based on "trend resumption ALGO" recently, now we need to see if the signal materilizes. This is my opinion. We are entering the planting and growing season for cotton in the northern hemisphere so the weather should be playing an important role in the quality of the bolls, as always. This chart was prepared using our CQG Q trader software, which you can demo for 14 days with realtime data.
Cotton Futures Specs
Hours: 8:00 PM previous day to 1:20 PM Central Time next day.
Margins: $2200 initial, $2000 Maint.
Point Value: full point = $500 ( Example: 82.80 to 83.80 ). Min fluctuation is 0.01 = $5 ( Example: 82.80 to 82.81)
Some of the basic fundamentals to keep in mind when you are considering a trade in the cotton market:
1. USDA reports will move this market. make sure you know the resport dates, times and expectations.
2. Weather. Mostly in South US, cotton region growing areas
3. Relationship with other markets
4. Cotton does have limits in place, initially 300 points

Our brokers here at Cannon will be happy to chat about the cotton market, meats and grains, 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
04/13
Fri
9:00 AM CDT - Mich Sentiment(Apr)
9:00 AM CDT - JOLTS-Job Openings(Feb)
 
 
LT: Apr Lean Hogs(CME)
Apr Eurodollar Options(CME)
Apr Lean Hogs Options(CME)
May Cotton Options(NYM)
May Coffee Options(ICE)
04/16
Mon
7:30 AM CDT - Empire Manufacturing(Apr)
7:30 AM CDT - Retail Sales(Mar)
7:30 AM CDT - Retail Sales Ex-Auto(Mar)
9:00 AM CDT - Business Inventories(Feb)
9:00 AM CDT - NAHB Housing Market Index(Apr)
11:00 AM CDT - NOPA Crush
3:00 PM CDT - Net Long-Term TIC Flows(Feb)
LT: Apr Eurodollar(CME)
Apr Mx Peso(CME)
May Sugar-11 Options(ICE)
04/17
Tue
7:30 AM CDT - Housing Starts & Building Permits(Mar)
8:15 AM CDT - Capacity Util & Industrial Prod(Mar)
3:30 PM CDT - API Energy Stocks
 
FN: May Cocoa(ICE)
LT: May Crude Lt(NYM)
 
 
04/18
Wed
6:00 AM CDT - MBA Mortgage Purchase Index
9:30 AM CDT - EIA Petroleum Status Report
1:00 PM CDT - Beige Book(Mar)
2:00 PM CDT - Dairy Products Sales
LT: May Platinum Options(NYM)
May Palladium Options(NYM)

 
04/19
Thu
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - Philadelphia Fed(Apr)
9:00 AM CDT - Leading Indicators(Mar)
9:30 AM CDT - EIA Natural Gas Report
3:30 PM CDT - Money Supply

 
 
 
04/20
Fri
2:00 PM CDT - Cattle On Feed
2:00 PM CDT - Milk Production
 
 
FN: May Coffee(ICE)
LT: May Crude Lt(NYM)
Apr Nikkei Options(CME)
Apr Russell Options(CME)
May 2,5,10 Year Notes Options(CBT)
May Bonds Options(CBT)
May Canola Options(CBT)
May Corn Options(CBT)
May Wheat Options(CBT)
May Oats Options(CBT)
May Rough Rice Options(CBT)
May Soybeans,Soymeal,Soyoil Options(CBT)
May Orange Juice Options(ICE)
04/23
Mon
9:00 AM CDT - Existing Home Sales(Mar)
2:00 PM CDT - Cold Storage
 
 

 
 
 
04/24
Tue
7:30 AM CDT - New Home Sales(Mar)
8:00 AM CDT - FHFA Housing Price Index(Feb)
9:00 AM CDT - Consumer Confidence(Apr)
3:30 PM CDT - API Energy Stocks
FN: May Cotton(NYM)
May Crude Lt(NYM)

 
04/25
Wed
6:00 AM CDT - MBA Mortgage Applications Index
9:30 AM CDT - EIA Petroleum Status Report
2:00 PM CDT - Dairy Products Sales
 
LT: May Copper Options(CMX)
May Gold Options(CMX)
May Silver Options(CMX)
May Natural Gas Options(NYM)
May RBOB & ULSD Options(NYM)
04/26
Thu
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - Durable Orders(Mar)
7:30 AM CDT - Durable Goods-Ex Transportation(Mar)
9:30 AM CDT - EIA Natural Gas Report
3:30 PM CDT - Money Supply
LT: Apr Copper(CMX)
Apr Gold(CMX)
Apr Silver(CMX)
Apr Platinum & Palladium(NYM)
Apr Feeder Cattle(CME)
May Natural Gas(NYM)
Apr Feeder Cattle 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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