November 16th, 2018 Newsletter

TradeTheNews.com global markets outlook for Nov-Dec along with a review and outlook of the historic moves which took place in natural gas market.

November 16th, 2018 - Issue #944

In This Issue

1. TradeTheNews.com Global Markets Review: The Results Are In
2. Hot Market Report: Natural Gas - Wow!
3. Economic Calendar

ThanksGiving Holiday next week. Markets will have modified trading hours and some are closed on Thursday/Friday.

1. TradeTheNews.com Global Markets Review: The Results Are In

TradeTheNews.com November/December Outlook

The return of volatility has created dread in some investors and excitement in others that see opportunity in a less complacent market. The stock market had a classic October sell off, but other markets also suffered. The junk bond market had its worst month in a decade, and the 10-year Treasury yield hit a 7-year high as markets reassessed sentiment about Fed rate tightening, even at a “gradual” and predictable pace.

With the resolution of the US midterm elections, at least one of the key uncertainties of the last year is now resolved. The outcome of the election will not only change the tenor of US politics for the next two years, but it will also influence the other major outstanding geopolitical issues that play into the assessment of the balance of risks. Now risk analysis will focus squarely on Fed rate policy, the final outcome of the Brexit deal, and the nascent trade war between the world’s largest economies.

US Election ‘Blues’ In the US, the House going ‘blue’ thwarts any White House dreams of additional tax cuts, but could result in some bipartisan issues getting more attention, particularly infrastructure spending – though it remains to be seen if Trump and the Democrats can agree on the structure of any such spending legislation (highways vs. walls). A Democratic House does give Trump a foil to run against for the next two years and he will definitely use the “obstructionist Democrats” to share the blame for any policy failures, stock market weakness, or economic downturn. On the policy level, the absence of any new fiscal stimulus could give the Federal Reserve some room to slow its monetary tightening if any red flags appear in the economic data, even as it deflects criticism from President Trump about higher rates.

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2. Hot Market Report: Natural Gas Making Historic Moves

By Mark O'Brien, Senior Broker

Click on image below to enlarge

natural gas futures;

After trading between ±2.85 and ±3.20 for more than two years – a veritable 35-cent stupor – natural gas futures (Dec.) broke out of that price range early this month and proceeded to rocket up ±$1.13 (an $11,300 move) in four days to $4.69 which included on Wednesday an intra-day high of 4.92– an additional 23-cent spike before the close and the largest daily percentage gain for the energy contract in 14 years.


Weekly chart from this morning, (Nov. 16th 2018). As of the time I am typing this newsletter, Natural gas is up almost 19 cents ( $1900 per contract, against or in your favor...) trying to build a base above the $4 mark. 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.

Not to be outdone, on Thursday the market staged its biggest one-day retreat ever, selling off a whopping 79 cents. Drastic changes from one day to the next in weather forecasts for the coming months seemed to be the major catalyst.

The whipsaw in price resulted in the CME Group’s NYMEX exchange taking “emergency action” to maintain orderly trading by widening price fluctuation limits on the eight front month futures contracts.


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: $4070 initial, $3800 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
11/16
Fri
7:30 AM CST - USDA Weekly Export Sales
8:15 AM CST - Capacity Util & Industrial Prod(Oct)
3:00 PM CST - Net Long-Term TIC Flows(Aug)
 
FN: Nov Lumber(CME)
Dec Cocoa(ICE)
LT: Nov Nikkei Options(CME)
Nov Eurodollar Options(CME)
Nov Russell Options(CME)
Dec Orange Juice Options(ICE)
11/19
Mon
9:00 AM CST - NAHB Housing Market Index(Nov)
2:00 PM CST - Milk Production
 
 
LT: Nov Eurodollar(CME)
Nov Mx Peso(CME)
Dec Crude Lt(NYM)

11/20
Tue
7:30 AM CST - Housing Starts & Building Permits(Oct)
3:30 PM CST - API Energy Stocks
 
 

 
 
 
11/21
Wed
6:00 AM CST - MBA Mortgage Index
7:30 AM CST - Initial Claims-Weekly
7:30 AM CST - Durable Goods-Ex Transportation(Oct)
7:30 AM CST - Durable Orders(Oct)
9:00 AM CST - Existing Home Sales(Oct)
9:00 AM CST - Leading Indicators(Oct)
9:30 AM CST - EIA Petroleum Status Report
11:00 AM CST - EIA Natural Gas Report
11:00 AM CST - Cattle On Feed
11:00 AM CST - Cold Storage
2:00 PM CST - Dairy Product Sales
FN: Dec Coffee(ICE)
Dec Crude Lt(NYM)
LT: Dec Platinum Options(NYM)
Dec Palladium Options(NYM)
11/22
Thu
THANKSGIVING DAY
 
 
 

 
 
 
11/23
Fri
7:30 AM CST - USDA Weekly Export Sales
9:00 AM CST - Mich Sentiment-Final(Nov)
3:30 PM CST - Money Supply
 
LT: Dec 2,5,10 Year Notes Options(CBT)
Dec Bonds Options(CBT)
Dec Canola Options(CBT)
Dec Wheat Options(CBT)
Dec Corn Options(CBT)
Dec Oats Options(CBT)
Dec Rough Rice Options(CBT)
Dec Soybeans,Soymeal,Soyoil Options(CBT)
11/26
Mon

 
 
 
FN: Dec Cotton(NYM)
 
 
 
11/27
Tue
8:00 AM CST - FHFA Housing Price Index(Sep)
9:00 AM CST - Consumer Confidence(Nov)
3:30 PM CST - API Energy Stocks
 
LT: Dec Copper Options(CMX)
Dec Gold Options(CMX)
Dec Silver Options(CMX)
Dec Natural Gas Options(NYM)
Dec RBOB & ULSD Options(NYM)

11/28
Wed
6:00 AM CST - MBA Mortgage Index
7:30 AM CST - GDP-Second Estimate(Q3)
7:30 AM CST - GDP Deflator-Second Estimate(Q3)
9:00 AM CST - New Home Sales(Oct)
9:30 AM CST - EIA Petroleum Status Report
2:00 PM CST - Dairy Products Sales
LT: Nov Copper(CMX)
Nov Gold(CMX)
Nov Silver(CMX)
Nov Platinum(NYM)
Nov Palladium(NYM)
Dec Natural Gas(NYM)
11/29
Thu
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Initial Claims-Weekly
7:30 AM CST - PCE Prices(Oct)
7:30 AM CST - PCE Prices-Core(Oct)
7:30 AM CST - Personal Income & Spending(Oct)
9:00 AM CST - Pending Home Sales(Oct)
9:30 AM CST - EIA Natural Gas Report
3:30 PM CST - Money Supply
FN: Dec 2,5,10 Year Notes(CBT)
Dec Bonds(CBT)
Dec Natural Gas(NYM)
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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