Stock Index Futures Volatility Learn to Lose

February 9th, 2018 Newsletter

Stock Index Futures Volatility hits historic highs in one of the craziest weeks we have seen. Trading education article on Learn to Lose

February 9, 2018 - Issue #909

In This Issue

1. Trading 102: Learn to Lose
2. Hot Market Report: Stock Index Futures - What's ahead?
3. Economic Calendar

1. Trading 102: Learn to Lose

Many different factors go into trading. Too many to discuss efficiently in one blog post. Some relate to trading techniques, other to money management, mental aspect, risk capital and much more.

But one that sticks in my eyes is the inability to accept a loss. I see many clients who can make money and have days where they make money but when they lose, they lose much more, sometimes even losing control and losing a big portion of their account.
I am not sure how a trader can embed this into their trading mind, BUT in my opinion if you train your brain to expect losses, understand losses and that losing days will happen, you will increase your chances of surviving in this business, which in return will actually give you a chance to succeed....
Losses are part of trading and as long as your losses are part of the plan and are quantified in advance and you can adhere to your rules, then you have a chance. I think it's easy when traders are winning...making money etc. Much harder when you lose or down. your brain starts playing tricks on tells you to double down, maybe reverse even though your analysis does not say so....all of a sudden you start pulling trades out of instinct, fear rather than a calculated plan that has solid risk/ reward. If a trader learns how to lose, to accept losses, to have realistic expectations, then he/ she can avoid having one of those terrible days when traders can lose almost of all their account.
I went into this subject and detailed day-trading money mgmt in an article I wrote a few years back for SFO magazine. You can read the full article by filling out the form below
Learn to Lose

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2. Hot Market Report: Stock Index Futures and Stock Market - Whats next.....

By Ilan Levy-Mayer, VP

Click on image below to enlarge

mini NASDAQ futures; Last year US stock markets experienced the least volatile year on record, hitting new highs seemingly every day. Then came the tax reform bill to end 2017, and a huge January with the S&P 500 rising 5.6%. Investors, especially individuals who finally became convinced that the rally would go on, piled in. It wasn't massive 1999-style euphoria, but many investors finally succumbed to the fear of missing out.
And as if on cue, sentiment (but not fundamentals) shifted, and stock markets gave up their 2018 gains. The S&P 500 - as of the close on February 8th - was down 10.2% from its all-time closing high set on January 26th.
Many reasons are sited by the "experts": Rising interest rates, fear of wage pressures and much more. I personally think this is just a correction of a market that ran way too fast...This does not mean that: A. we can't go lower - yes we can. B. That the bull market is over - only time will tell. In between, lets look at some technicals.
The mini NASDAQ weekly chart shows a few things from the technical perspective. The first is how strong and powerful the rally of the recent years was! The FIB levels drawn also show that a "normal" correction can still send this market much lower. The volatility is historical. There are more risks for most traders out there but there are also some opportunities and the options volatility is creating some interesting scenarios. Our brokers here at Cannon will be happy to chat about the recent volatility, market outlook and possible trading strategies and much more! please feel free to contact us at any time.

3. Economic Calendar

Source: Moore Research Center, Inc.

Date Reports Expiration & Notice Dates
9:00 AM CST - Wholesale Inventories(Dec)
FN: Mar Sugar-16(ICE)
LT: Feb Canadian Dollar Options(CME)
Feb Currencies Options(CME)
Feb Mx Peso Options(CME)
Feb US Dollar Index Options(ICE)
Mar Cotton Options(NYM)
Mar Coffee Options(ICE)
1:00 PM CST - Treasury Budget(Jan)

3:30 PM CST - API Energy Stocks

6:00 AM CST - MBA Mortgage Purchase Index
7:30 AM CST - Core CPI & CPI(Jan)
7:30 AM CST - Retail Sales(Jan)
7:30 AM CST - Retail Sales Ex-Auto(Jan)
9:00 AM CST - Business Inventories(Dec)
9:30 AM CST - EIA Petroleum Status Report
2:00 PM CST - Dairy Products Sales
FN: Mar Cocoa(ICE)
LT: Feb Lean Hogs(CME)
Feb Lean Hogs Options(CME)
Mar Crude Lt Options(NYM)
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Initial Claims-Weekly
7:30 AM CST - Core PPI & PPI(Jan)
7:30 AM CST - Empire Manufacturing(Feb)
7:30 AM CST - Philadelphia Fed(Feb)
8:15 AM CST - Capacity Util & Industrial Prod(Jan)
9:00 AM CST - NAHB Housing Market Index(Feb)
9:30 AM CST - EIA Natural Gas Report
11:00 AM CST - NOPA Crush
2:00 PM CST - Net Long-Term TIC Flows(Feb)
3:30 PM CST - Money Supply
LT: Mar Sugar-11 Options(ICE)
7:30 AM CST - Building Permits & Housing Starts(Jan)
7:30 AM CST - Export(ex-ag) & Import(ex-oil) Prices(Jan)
9:00 AM CST - Univ of Mich Consumer Sentiment-Prelim(Feb)
LT: Feb Mx Peso(CME)
Feb Nikkei Options(CME)
Feb Eurodollar Options(CME)
Feb Russell Options(CME)
Mar Orange Juice Options(ICE)
LT: Feb Eurodollar(CME)

FN: Mar Coffee(ICE)
LT: Mar Crude Lt(NYM)
6:00 AM CST - MBA Mortgage Applications Index
9:00 AM CST - Existing Home Sales(Jan)
3:30 PM CST - API Energy Stocks
LT: Mar Platinum Options(NYM)
Mar Palladium Options(NYM)

7:30 AM CST - Initial Claims-Weekly
9:00 AM CST - Leading Indicators(Jan)
9:30 AM CST - EIA Natural Gas Report
10:00 AM CST - EIA Petroleum Status Report
2:00 PM CST - Cold Storage & Annual
2:00 PM CST - Dairy Products Sales
3:30 PM CST - Money Supply
FN: Mar Cotton(NYM)
Mar Crude Lt(NYM)
LT: Mar Copper Options(CMX)
Mar Gold Options(CMX)
Mar Silver Options(CMX)
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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