November 1st, 2019 - Issue #988
In This Issue
1. Trading 101: Free, Interactive Futures Trading Tutorial
2. Hot Market Report: Natural Gas Review ahead of Heating Season
3. Economic Calendar
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1. FREE Futures Forthright Premium eBook
Cannon Trading is pleased to present "Futures Forthright eBook", available for instant download written by Cannon Trading staff
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2. Hot Market Report: Natural Gas - Prices too Low?
By Mark O'Brien, Senior BrokerClick on image below to enlarge
This week’s highlighted Market is Natural Gas futures. Natural Gas is part of the energy sector along with its cousins, Crude Oil, RBOB - Unleaded gas and heating oil. All traded on the NYMEX/GLOBEX exchange.
The undisputed king of the energy futures sector is crude oil. The West Texas crude futures contract traded on the CME/NYMEX is the largest energy futures contract in the world by volume. But, not too far distant from it in terms of volume and over the last decade or so in importance, is natural gas. Coupled with its long-time use as a domestic cooking and heating fuel and its increased use in power generation, natural gas has surpassed the heating oil and unleaded gas futures contracts in terms of trade volume. And because of its tendency to follow annual seasonal patterns – and occasionally sharply deviate from them – non-commercial traders have become growing participants in the natural gas futures market. The heating season for natural gas typically begins on November 1. In preparing, the industry accumulates inventory. Those efforts typically peak in October. Then, as cold weather arrives, distributers begin to aggressively liquidate those supplies, which pressures prices. This year beware, because presently, these are exceptional times for natural gas futures prices. With the exception of a brief foray to all-time lows around Oct.–Nov. of ’15, the price of the December ‘19 contract for Henry Hub natural gas (the leading natural gas futures contract) is trading near lows not seen since 2001. Going into this month, the market will stay keenly focused on weekly Energy Information Administration (EIA) storage data – released each Thursday at 9:30 A.M., Central Time – and comparing weather forecasts 11-15 days out with regional models and patterns.Weekly chart from this morning, Nov. 1st 2019.
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 ( DIAMONDS included) along with other tools, 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: $2700 initial, $2500 maintenance ( as of the date of this newsletter)
Point Value: full point = $100 ( Example: 404.0 to 405.0 ). Min. price fluctuation is 0.1 = $10 ( Example: 404.1 to 404.2)
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 |
|---|---|---|
| 11/01 Fri |
7:30 AM CDT - Ave Workweek & Hourly Earnings(Oct)
7:30 AM CDT - Nonfarm Payrolls(Oct) 7:30 AM CDT - Unemployment Rate(Oct) 9:00 AM CDT - ISM Manufacturing Index(Oct) 9:00 AM CDT - Construction Spending(Sep) 2:00 PM CDT - Cotton System 2:00 PM CDT - Grain Crushings 2:00 PM CDT - Fats & Oils |
FN: Nov Orange Juice(ICE)
LT: Nov Live Cattle Options(CME) Dec Cocoa Options(ICE) |
| 11/04 Mon |
9:00 AM CST - Factory Orders(Sep)
3:00 PM CST - Crop Progress |
FN: Nov RBOB & ULSD(NYM)
|
| 11/05 Tue |
7:30 AM CST - Trade Balance(Sep)
9:00 AM CST - ISM Non-Manufacturing Index(Oct) 3:30 PM CST - API Energy Stocks |
|
| 11/06 Wed |
6:00 AM CST - MBA Mortgage Index
7:30 AM CST - Productivity-Prel(Q3) 7:30 AM CST - Unit Labor Costs-Prelim(Q3) 9:30 AM CST - EIA Petroleum Status Report 2:00 PM CST - Dairy Products Sales |
|
| 11/07 Thu |
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Initial Claims-Weekly 9:30 AM CST - EIA Natural Gas Report 2:00 PM CST - Consumer Credit(Sep) 3:30 PM CST - Money Supply |
|
| 11/08 Fri |
9:00 AM CST - Univ of Mich Consumer Sent-Prelim(Nov)
9:00 AM CST - Wholesale Inventories(Sep) 11:00 AM CST - WASDE Report & Crop Production |
LT: Nov Orange Juice(ICE)
Nov Canadian Dollar Options(CME) Nov Currencies Options(CME) Nov Mx Peso Options(CME) Nov US Dollar Index Options(ICE) Dec Cotton Options(NYM) Dec Coffee Options(ICE) |
| 11/11 Mon |
VETERANS DAY
|
|
| 11/12 Tue |
3:00 PM CST - Crop Progress
|
|
| 11/13 Wed |
6:00 AM CST - MBA Mortgage Index
7:30 AM CST - Core CPI & CPI(Oct) 1:00 AM CDT - Treasury Budget(Oct) 3:30 PM CDT - API Energy Stocks |
|
| 11/14 Thu |
7:30 AM CST - Initial Claims-Weekly
7:30 AM CST - Core PPI & PPI(Oct) 9:30 AM CST - EIA Natural Gas Report 10:00 AM CST - EIA Petroleum Status Report 2:00 PM CST - Dairy Products Sales 3:30 PM CST - Money Supply |
LT: Nov Canola(CBT)
Nov Rough Rice(CBT) Nov Soybeans(CBT) |
| FN=First Notice, OE=Option Expiration, LT=Last Trade | ||
* 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!
