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June 21st, 2019 Newsletter

Gold Futures Safe Haven or inflation hedge along with the five fatal flaws of trading

June 21st, 2018 - Issue #970

In This Issue

1. Trading 101: Five Fatal Flaws of Trading
2. Hot Market Report: Gold Futures Safe Haven or inflation hedge?
3. Economic Calendar

1. Five Fatal Flaws of Trading

Why Do Traders Lose?

From our friend Senior Analyst Jeffrey Kennedy. Eliott Wave


If you’ve been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn’t seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can’t seem to prevent that invisible hand from depleting your trading account funds.

Which brings us to the question: Why do traders lose? Or maybe we should ask, 'How do you stop the Hand?' Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account.

Fatal Flaw No. 1 – Lack of Methodology

If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct won’t work over the long run. If you don’t have a defined trading methodology, then you don’t have a way to know what constitutes a buy or sell signal. Moreover, you can’t even consistently correctly identify the trend.

How to overcome this fatal flaw? Answer: Write down your methodology. Define in writing what your analytical tools are and, more importantly, how you use them. It doesn’t matter whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above. What does matter is that you actually take the effort to define it (i.e., what constitutes a buy, a sell, your trailing stop and instructions on exiting a position). And the best hint I can give you regarding developing a defined trading methodology is this: If you can’t fit it on the back of a business card, it’s probably too complicated. 

Fatal Flaw No. 2 -- Lack of Discipline 
When you have clearly outlined and identified your trading methodology, then you must have the discipline to follow your system. A Lack of Discipline in this regard is the second fatal flaw. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified. The formula for success is to consistently apply a proven methodology. So the best advice I can give you to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously.

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2. Hot Market Report: Gold Futures - Safe Haven or inflation hedge?

By John Thorpe & Ilan Levy-Mayer, Senior Brokers

Click on image below to enlarge

gc futures;

This week’s highlighted Market is Gold. Gold is part of the Precious Metals sector along with "it's" brothers Platinum, Palladium, Silver and Copper.. All traded on the COMEX and NYMEX exchanges.

Gold recently, June 19th made a parabolic move to the upside and closed at price levels not seen since the summer of 2016 and also broke outside of a 6 year channel ,but unable to close above $1400.00 per oz. If we close down on the day, this current rally can be seen as exhausted and look for a correction to test the 1350.00 area basis the August contract. As a rule, I like a close outside a channel for 3 consecutive days to confirm a bottom is in place and a trend has just begun. With inflation running at a roughly .02% clip, the feds’ mandate is solidly within a range of success. An increasingly dangerous global landscape could make this attempted breakout the real deal

Weekly chart from this morning, (June 21st 2019). Note that the market hit the major resistance around 1416 in the overnight session. This is the same level the market has tested back in Sept. 2016, Sept. 2017, Jan. 2018. Each time the market was NOT able to break above that area and reversed. This is not to say that this is what we think will happen, just sharing an observation. Major support at around the 1360 levels

This chart was prepared using CQG Q Trader software, which you can demo for 14 days with real time data.
To access a free trial to the ALGOS shown in the chart ( "early trend identifier" included) along with other tools, visit and sign up for a free trial for 21 days with real time data.


GOLD Futures Specs
Hours: 05:00 PM previous day to 4:00 PM Central Time
Margins: $3740 initial, $3300 Maint. ( as of the date of this newsletter)
Point Value: full point = $100 ( Example: 1285.0 to 1286.0 ). Min fluctuation is 0.1 = $10 ( Example: 1285.5 to 1285.6) Settlement: Physical Delivery
Months: February, April, June, August, October,December. G,J,M,Q,V,Z
Weekly Options:YES

Some of the basic fundamentals to keep in mind when you are considering trading gold futures for this matter:
1. Research supply side in major producing countries.
2. Follow both the jewelry demand and investment demand for silver
3. Focus in macroeconomics not microeconomics
4. Correlation to silver and platinum
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 gold market, other metals, 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
06/21
Fri
9:00 AM CDT - Existing Home Sales(May)
2:00 PM CDT - Cattle On Feed
 
 
LT: Jun E-Mini Dow(CME)
Jun E-Mini S&P 500(CME)
Jun NASDAQ(CME)
Jun Russell(CME)
Jun E-Mini Dow Options(CME)
Jun E-Mini S&P 500 Options(CME)
Jun NASDAQ Options(CME)
Jun Russell Options(CME)
Jul 2,5,10 Year Notes Options(CBT)
Jul Bonds Options(CBT)
Jul Canola Options(CBT)
Jul Wheat Options(CBT)
Jul Corn Options(CBT)
Jul Oats Options(CBT)
Jul Rough Rice Options(CBT)
Jul Soybeans,Soymeal,Soyoil Options(CBT)
Jul Orange Juice Options(ICE)
06/24
Mon
2:00 PM CDT - Cold Storage
3:00 PM CDT - Crop Progress

 
FN: Jul Cotton(NYM)
Jul Crude Lt(NYM)

 
06/25
Tue
7:00 AM CDT - S&P Case-Shiller Home Price Index(Apr)
8:00 AM CDT - FHFA Housing Price Index(Apr)
9:00 AM CDT - Consumer Confidence(Jun)
9:00 AM CDT - New Home Sales(May)
3:30 PM CDT - API Energy Stocks
LT: Jul Copper Options(CMX)
Jul Gold Options(CMX)
Jul Silver Options(CMX)
Jul Natural Gas Options(NYM)
Jul RBOB & ULSD Options(NYM)
06/26
Wed
6:00 AM CDT - MBA Mortgage Index
7:30 AM CDT - Adv Intl Trade In Goods(May)
7:30 AM CDT - Adv Retail Inventories(May)
7:30 AM CDT - Adv Wholesale Inventories(May)
7:30 AM CDT - Durable Orders(May)
7:30 AM CDT - Durable Goods Ex-Transportation(May)
9:30 AM CDT - EIA Petroleum Status Report
2:00 PM CDT - Dairy Products Sales
LT: Jun Copper(CMX)
Jun Gold(CMX)
Jun Silver(CMX)
Jun Platinum & Palladium(NYM)
Jul Natural Gas(NYM)
06/27
Thu
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - GDP-Third Estimate(Q1)
7:30 AM CDT - GDP Deflator-Third Estimate(Q1)
9:00 AM CDT - Pending Home Sales(May)
9:30 AM CDT - EIA Natural Gas Report
2:00 PM CDT - Quarterly Hogs & Pigs
3:30 PM CDT - Money Supply
FN: Jul Natural Gas(NYM)
 
 
 
06/28
Fri
7:30 AM CDT - Personal Income & Spending(May)
7:30 AM CDT - PCE Price Index(May)
7:30 AM CDT - Core CPE Price Index(May)
9:00 AM CDT - Univ of Mich Consumer Sent-Final(Jun)
11:00 AM CDT - Grain Stocks
11:00 AM CDT - Planted Acreage
FN: Jul Copper(CMX)
Jul Gold & Silver(CMX)
Jul Platinum & Palladium(NYM)
Jul Canola(CBT)
Jul Wheat(CBT)
Jul Corn(CBT)
Jul Oats(CBT)
Jul Rough Rice(CBT)
Jul Soybeans,Soymeal,Soyoil(CBT)
LT: Jun 2,5 Year Notes(CBT)
Jun Bitcoin(CME)
Jun Fed Funds(CME)
Jun Live Cattle(CME)
Jul RBOB & ULSD(NYM)
Jul Sugar-11(ICE)
Jun Fed Funds Options(CME)
Jul Lumber Options(CME)
07/01
Mon
9:00 AM CDT - Construction Spending(May)
9:00 AM CDT - ISM Index(Jun)
2:00 PM CDT - Cotton System
2:00 PM CDT - Fats & Oils
2:00 PM CDT - Grain Crushings
3:00 PM CDT - Crop Progress
FN: Jul Orange Juice(ICE)
Jul Sugar-11(ICE)

 
07/02
Tue
3:30 PM CDT - API Energy Stocks
 
 
 
FN: Jul RBOB & ULSD(NYM)
LT: Jun Butter(CME)
Jun Milk(CME)
Jun Butter Options(CME)
Jun Milk Options(CME)
07/03
Wed
6:00 AM CDT - MBA Mortgage Index
7:15 AM CDT - ADP Employment Change(Jun)
7:30 AM CDT - Trade Balance(May)
9:00 AM CDT - Factory Orders(May)
9:00 AM CDT - ISM Non-Manufacturing Index(Jun)
9:30 AM CDT - EIA Petroleum Status Report
11:00 AM CDT - EIA Natural Gas Report
2:00 PM CDT - Dairy Products Sales

 
 
 
07/04
Thu
INDEPENDENCE DAY
 
 
 

 
 
 
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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