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August 24th, 2018 Newsletter

Knowing what you don't know when it comes to trading, an article on ranking market events and Nat gas outlook and information. Natural Gas futures may be a good alternative for day trading as well.

August 24th, 2018 - Issue #933

In This Issue

1. Trading 101: Knowing What You Don't Know....
2. Hot Market Report: Natural Gas Futures
3. Economic Calendar

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1. Trading 101: Ranking Market Events ( knowing what you don't know...)

by: Cannon Trading Staff

Every trader has done it. You've done it, your friends have done it, even your broker has done it at one point early in their career.

Here’s the scenario:

You've finally finished your futures education at Cannon Trading Company. You've done you're homework on stops, limits, indicators and price movements for the market you're trading. You're ready to go, you enter your limit order and you wait.

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**DING**

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You get filled. Your heart rate picks up, a wry smile crosses your face and you begin to imagine the possibilities of the one trade you're in: How much can I make? How much can I lose before it's too much? You’ve waited through months of technical trading and deep meditation to get here, and now it’s finally paying off with one of your first trades in the live market. Sayonara paper trading; aloha live futures.

Then, all of a sudden, the top of the hour hits and the market starts acting up. It's getting more volatile and more volatile; it’s picking up speed and taking an unforgiving turn against you. You can’t think straight, all you can think about is your losing position that could get worse and worse as the seconds go by. You race to put in a stop order, but you finally have to settle for a market order just to stop the bleeding. You stare.

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**DING**

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You’re out of the market. What the hell just happened? You stare at the screen; did your indicators lie to you? Is your system faulty? Did you not listen to your broker? Well, probably not. But you're down several handles, you’ve lost some money and your pride is aching...


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2. Hot Market Report: Natural Gas Futures NOT the "Step child of the energy sector".....

By Ilan Levy-Mayer

Click on image below to enlarge

Natural gas futures; Natural Gas is an interesting market. It has experienced periods of extreme volatility – often exceptional even in its own right – and it’s endured long periods – frequently several months – of very low volatility. Indeed, over the last few months “Nat Gas” prices have sustained a course of lower volatility.
I personally like the Nat Gas market and over the years have employed a wide range of strategies, including options with a directional approach, long term futures and futures spread trades, day trades and net short options positions. This is a liquid futures market; if you’ve never traded Nat Gas, I recommend adding it to your watch list to get a feel for its behavior.
If you are a day-trader, Nat Gas offers you a market whose behavior is conspicuously differs from other markets, like stock indexes and even the other petroleum-based energy markets many of you are currently day-trading and is worth observing.

Daily chart of Nat Gas for your review – current as of this morning ( Aug. 24th 2018). You can see the market has traded within a range roughly between 2.70 to 3.00 for a good few weeks now and as of today, it looks like the market is trying to turn lower after hitting resistance at the 3.00 level.

On Thursday(yesterday), the EIA announced a storage build of 48 Bcf, bringing total stocks to 2.345 Tcf for the week-ending August 17. Total stocks are 684 Bcf less than inventories one year ago and 599 Bcf less than the five-year historical average, simply the EIA announced lower than expected. With that fundamental, the storage deficit widened so the prices are going down. If there are some deferred contract traders (October and November) like the strong production fundamentals because it increases the chances of a supply deficit at the start of heating season in November.

To access a free trial of the ALGOS shown in the chart, visit and sign up for a free trial for 21 days with real-time data.
Natural Gas Futures Specs. (this market also offers a mini Nat Gas futures contract which is half the size)
Hours: 5:00 PM to 4:00 PM the following day, Central Time
Margins: $1300 initial, $1200 maintenance ( as of the date of this newsletter)
Point Value: full point = $100 ( Example: 294.0 to 295.0 ). Min. price fluctuation is 0.1 = $10 ( Example: 294.1 to 294.2)

Settlement: Physical, deliverable commodity

Months: Monthly cycle, All Months

Weekly Options:YES
Some of the basic fundamentals to keep in mind when you are considering trading the Nat Gas market:
1. Longer term view of current market prices
2. Supply and Demand
3. Seasonality, i.e. heating and cooling cycles
4. Be aware of Thursday morning’s EIA gas storage report at 9:30 AM CDT

Our brokers here at Cannon will be happy to chat about the Natural Gas 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.

Date Reports Expiration & Notice Dates
08/24
Fri
7:30 AM CDT - Durable Goods-Ex Transportation(Jul)
7:30 AM CDT - Durable Orders(Jul)
2:00 PM CDT - Cattle On Feed
 
LT: Sep 2,5,10 Year Notes Options(CBT)
Sep Bonds Options(CBT)
Sep Wheat Options(CBT)
Sep Corn Options(CBT)
Sep Oats Options(CBT)
Sep Rough Rice Options(CBT)
Sep Soybeans,Soymeal,Soyoil Options(CBT)
08/27
Mon

 
 
 

 
 
 
08/28
Tue
7:30 AM CDT - Adv Int Trade In Goods(Jul)
7:30 AM CDT - Adv Wholesale Inventories(Jul)
8:00 AM CDT - S&P Case-Shiller Home Price Index(Jun)
9:00 AM CDT - Consumer Confidence(Aug)
3:30 PM CDT - API Energy Stocks
LT: Aug Butter(CME)
Aug Milk(CME)
Aug Butter Options(CME)
Aug Milk Options(CME)
Sep Copper Options(CMX)
Sep Gold Options(CMX)
Sep Silver Options(CMX)
Sep Natural Gas Options(NYM)
Sep RBOB & ULSD Options(NYM)
08/29
Wed
6:00 AM CDT - MBA Mortgage Index
7:30 AM CDT - GDP-Second Estimate(Q2)
7:30 AM CDT - GDP Deflator-Second Estimate(Q2)
9:00 AM CDT - Pending Home Sales(Jul)
9:30 AM CDT - EIA Petroleum Status Report
2:00 PM CDT - Dairy Product Sales
LT: Aug Copper(CMX)
Aug Gold(CMX)
Aug Silver(CMX)
Aug Platinum(NYM)
Aug Palladium(NYM)
Sep Natural Gas(NYM)
08/30
Thu
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - PCE Prices & Core(Jul)
7:30 AM CDT - Personal Income & Spending(Jul)
9:30 AM CDT - EIA Natural Gas Report
3:30 PM CDT - Money Supply
FN: Sep 2,5,10 Year Notes(CBT)
Sep Bonds(CBT)
Sep Natural Gas(NYM)
LT: Aug Feeder Cattle(CME)
Aug Feeder Cattle Options(CME)

08/31
Fri
8:45 AM CDT - Chicago PMI(Aug)
9:00 AM CDT - Univ of Mich Consumer Sent-Final(Aug)
 
 
FN: Sep Copper(CMX)
Sep Gold & Silver(CMX)
Sep Palladium & Platinum(NYM)
Sep Wheat(CBT)
Sep Oats(CBT)
Sep Corn(CBT)
Sep Rough Rice(CBT)
Sep Soybeans,Soymeal,Soyoil(CBT)
LT: Aug Fed Funds(CME)
Aug Live Cattle(CME)
Sep RBOB & ULSD(NYM)
Aug Fed Funds Options(CME)
Sep Lumber Options(CME)

09/03
Mon
LABOR DAY
 
 
 

 
 
 
09/04
Tue
9:00 AM CDT - Construction Spending(Jul)
9:00 AM CDT - ISM Index(Aug)
1:00 PM CDT - Auto & Truck Sales(Aug)
2:00 PM CDT - Cotton System
2:00 PM CDT - Grain Crushings
FN: Sep Orange Juice(ICE)
 
 
 
09/05
Wed
6:00 AM CDT - MBA Mortgage Index
7:30 AM CDT - Trade Balance(Jul)
3:30 PM CDT - API Energy Stocks
 
FN: Sep RBOB & ULSD(NYM)
 
 
 
09/06
Thu
7:15 AM CDT - ADP Employment Change(Aug)
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - Productivity-Rev(Q2)
7:30 AM CDT - Unit Labor Costs-Rev(Q2)
9:00 AM CDT - Factory Orders(Jul)
9:00 AM CDT - ISM Services(Aug)
9:30 AM CDT - EIA Natural Gas Report
10:00 AM CDT - EIA Petroleum Status Report
2:00 PM CDT - Dairy Products Sales
3:30 PM CDT - Money Supply

 
 
 
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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