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October 30, 2015 Newsletter

Stock Index Futures outlook and Daytrading Crude Oil Futures

October 30th, 2015 - Issue #807

In This Issue

1. Trading 202: Day Trading Crude Oil Futures Techniques
2. Hot Market Report: U.S. Stock Index Bulls Have Technical Powe
3. Economic Calendar

1. Day Trading Commodities with Crude Oil Futures


Crude Oil Futures volatility offers a "different market personality" than stock index futures. Here is some of the things you need to know about day trading crude oil futures:

By: Ilan Levy-Mayer, Cannon Trading Commodities Broker & VP

Crude Oil is one of MY favorite futures market for day trading. Before I dive in and share with you how the volatility in crude oil fits my risk tolerance for day trading and provide a couple of chart examples, we should review some of the specifications of Crude Oil Futures.  

Crude Oil Futures have monthly expiration. So each month we trade a different contract month, so one needs to know when is the first notice day and last trading day for crude oil futures in order to always make sure we are trading the proper month with the most liquidity and avoid any chance of getting into delivery situation.

Next is the contract size. Crude Oil futures are based on 1000 barrels. To be honest from a day trading perspective all I care is that each tick or 1 cent fluctuation is $10 against me or in my favor per contract. That means that a move from 92.94 to 92.74 = $200.

Another factor is trading hours. At the time I am sharing my thoughts with you, April 8th 2013, crude oil futures trade on the CME Globex platform and trade from 5 PM CDT until the next day at 4 PM CDT. That is 23 of straight trading hours. I definitely don't recommend day trading this market 23 hours...but it is good to know the trading hours.

Volume in crude oil futures is pretty good to trade in my opinion. Averaging about 300,000 contracts per day.

One last pointer to touch on is the API (American Petroleum Institute) report that normally comes out Wednesday at 9:30 CDT (on short weeks, holidays etc. , this report will be pushed to Thursday at 10 AM CDT). I tell my clients that this report is way too volatile and I like to be out 5 minutes before and not resume trading 5 minutes until after the report comes out. This report by itself deserves a writing but on short, the report provides information on how our stock pile is doing ( = supply/demand)  and the market will move based on the numbers versus what was expected. Again as a day trader, your main job is to know about this report, when it comes out and in my opinion stay out of the market during this time..Fill out the form below to read the full article.

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2. Hot Market Report: U.S. Stock Index Bulls Have Technical Power

From our friend Jim Wyckoff at JimWyckoff.com

Click on image below to enlarge

stock index futures futures;See on the daily bar chart for the December e-mini S&P futures that prices are in a steep uptrend and have recently hit a 2.5-month high. The U.S. stock market bulls have good upside technical momentum to suggest more price gains are coming. There is very stiff overhead technical resistance at the summertime highs. If those levels are cleared on the upside, look for a significant leg up in prices to follow.

3. Economic Calendar

Source: Moore Research Center, Inc.

Date Reports Expiration & Notice Dates
11/02
Mon
9:00 AM CST - Construction Spending(Sep)
9:00 AM CST - ISM Index(Oct)
LT: Nov Orange Juice(ICE)
  
11/03
Tues
9:00 AM CST - Factory Orders(Sep)
4:00 PM CST - Auto & Truck Sales(Oct)
  
FN: Nov RBOB & ULSD(NYM)
LT: Oct Butter(CME)
Oct Milk(CME)
Oct Butter Options(CME)
Oct Milk Options(CME)
11/04
Wed
6:00 AM CST - MBA Mortgage Purchase Index
7:15 AM CST - ADP Employment Change(Oct)
7:30 AM CST - Trade Balance(Sep)
9:00 AM CST - ISM Services(Oct)
9:30 AM CST - API & DOE Energy Stats
2:00 PM CST - Dairy Products Sales

11/05
Thurs
6:30 AM CST - Challenger Job Cuts(Oct)
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Initial Claims-Weekly
7:30 AM CST - Productivity-Prel(Q3)
9:30 AM CST - EIA Gas Storage
3:30 PM CST - Money Supply
 

11/06
Fri
7:30 AM CST - Ave Workweek & Hourly Earnings(Oct)
7:30 AM CST - Nonfarm Payrolls(Oct)
7:30 AM CST - Unemployment Rate(Oct)
2:00 PM CST - Consumer Credit(Sep)
 
LT: Nov Canadian Dollar Options(CME)
Nov Currencies Options(CME)
Nov Live Cattle Options(CME)
Nov US Dollar Index Options(ICE)
Dec Cocoa Options(ICE)
11/09
Mon

  
LT: Nov Orange Juice(ICE)
  

* 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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