October 16th, 2020 - Issue #1025
In This Issue
1. Day Trading 202: Tight Stops? Wide Stops? Which One Should I Use?
2. Hot Market Report: Corn Futures Above $4
3. Economic Calendar
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1. Day Trading 202: Tight Stops? Wide Stops? Which One Should I Use?
Entry signals are very important but just as important if not more is trade management.
By: Ilan Levy-Mayer, Cannon Trading Commodities Broker & VP
This article was published on FinanceMagnates.com back a couple years ago but is definitely a timeless article.
Today I decided to touch more on an educational feature rather than provide a certain market outlook. Many of my clients and blog readers know that when it comes to short term trading I am a fan of adjusting your trading technique/ game plan according to your assessment of the type of trading day that is developing in front of you.
Many new and advanced traders spend HOURS on looking for entry signals. Back testing historical data, creating algorithms to use and much more. I know. I am one of these traders.
Trade management consists of many factors. Some are psychological and some are more mathematical and many are in between. Some of the basic elements of trade management before even entering the trade are: What will my stop loss be**? will i use a stop loss**? What will my target be? will I use a target or just trail the trade if it goes my way?
....Finish reading rest of the article
Wide Stops? Tight Stops?
Cannon Trading respects your privacy and will never give this information to a 3rd party.
2. Hot Market Report: Corn Futures Breaking above $4 per Bushel
By Joe Easton, Senior BrokerClick on image below to enlarge
This week’s highlighted Market is Corn. Corn futures are part of the GRAINS family which includes 4 types of Wheat, Soybean, Soymeal, Oats, Rough Rice and Bean Oil. All traded on the CBOT/GLOBEX exchange.
This week ZC- Corn Futures has made a new high for 2020! Based on the attached chart, Corn exceeded the highs in January 2020 of 4.05 and is trading currently over those highs at 4.06. This could be the beginning stages of a reversal. On longer term charts, you can clearly see we have been in a range between low $3s and mid $4s since our first low in September 2014 of 3.22. We hit a new low in August 2016 of 3.15 and finally a third low April this year at 3.01. This patterns somewhat resembles a descending wedge. You can see a strong move up, breaking a down sloping trendline. The next resistance is the previous highs from June 2019 of 4.60. Previous to that would be May 2015 of 5.20. Dropping back below the $3.50 support could invalidate the trend change.
December corn traded up to the highest level since January 15. In the wake of their earlier-season purchases, China is seen to continue being an aggressive buyer further into this season. There’s also talk that this season’s yield will come in a bit lower than the current USDA record high forecasts. This has helped trigger strong buying across the board. Outside forces that typically curb price increases – the strong U.S. dollar and weak energy prices – have had little effect this late in the season.
Corn Futures Specs
Hours: 7:00 PM to 1:20 PM next day PM Central Time
Margins: $935 initial, $850 Maint. ( as of the date of this newsletter)
Point Value: full Cent = $50.00 ( Example: $3.60 to $3.61/bu ). Min fluctuation is 2/8ths of a cent = $12.50 ( Example: 3.60 -3.602)
Settlement: Deliverable, FND is last business day preceding the contract month
Months: March (H), May (K), July (N), ,September (U), December (Z)
Weekly Options: YES
The corn market has good volume and can be traded outright in intra and inter market spreads, swing trading, using options and more.
Some of the basic fundamentals to keep in mind when you are considering trading ZC ( corn)
1. Longer term view of current market prices
2. Dates and times of important reports. WASDE, Planting intentions, Crop progress
3. Weather
4. Global Political situation (food often used as a weapon in trade)
4. Dollar strength or lack of, Brazilian Real value
Our brokers here at Cannon will be happy to chat about the Corn market, other grains, 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 |
|---|---|---|
| 10/16 Fri |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Retail Sales(Sep) 7:30 AM CDT - Retail Sales Ex-Auto(Sep) 8:15 AM CDT - Capacity Util & Industrial Prod(Sep) 9:00 AM CDT - Business Inventories(Aug) 9:00 AM CDT - Univ of Mich Consumer Sent-Prelim(Oct) 3:00 PM CDT - Net Long Term TIC Flows(Aug) |
LT: Oct Nikkei Options(CME)
Oct Eurodollar Options(CME) Nov Cotton Options(NYM) Nov Orange Juice Options(ICE) |
| 10/19 Mon |
9:00 AM CDT - NAHB Housing Market Index(Oct)
3:00 PM CDT - Crop Progress |
LT: Oct Eurodollar(CME)
Oct Mx Peso(CME) |
| 10/20 Tue |
7:30 AM CDT - Housing Starts & Building Permits(Sep)
2:00 PM CDT - Milk Production 3:30 PM CDT - API Energy Stocks |
LT: Nov Crude Lt(NYM)
|
| 10/21 Wed |
6:00 AM CDT - MBA Mortgage Index
9:30 AM CDT - EIA Petroleum Status Report 2:00 PM CDT - Dairy Products Sales |
LT: Nov Platinum & Palladium Options(NYM)
|
| 10/22 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 9:00 AM CDT - Existing Home Sales(Sep) 9:30 AM CDT - EIA Natural Gas Report 2:00 PM CDT - Cold Storage 3:30 PM CDT - Money Supply |
FN: Nov Crude Lt(NYM)
|
| 10/23 Fri |
2:00 PM CDT - Cattle On Feed
|
LT: Nov 2,5,10 Year Notes Options(CBT)
Nov Bonds Options(CBT) Nov Canola Options(CBT) Nov Wheat Options(CBT) Nov Corn Options(CBT) Nov Oats Options(CBT) Nov Rough Rice Options(CBT) Nov Soybeans,Soymeal,Soyoil Options(CBT) |
| 10/26 Mon |
9:00 AM CDT - New Home Sales(Sep)
3:00 PM CDT - Crop Progress |
|
| 10/27 Tue |
7:30 AM CDT - Durable Goods-Ex Transportation(Sep)
7:30 AM CDT - Durable Orders(Sep) 8:00 AM CDT - FHFA Housing Price Index(Aug) 8:00 AM CDT - S&P Case Shiller Home Price Index(Aug) 9:00 AM CDT - Consumer Confidence(Oct) 3:30 PM CDT - API Energy Stocks |
LT: Nov Copper Options(CMX)
Nov Gold & Silver Options(CMX) Nov Natural Gas Options(NYM) Nov RBOB & ULSD Options(NYM) |
| 10/28 Wed |
6:00 AM CDT - MBA Mortgage Index
9:30 AM CDT - EIA Petroleum Status Report 2:00 PM CDT - Dairy Products Sales |
LT: Oct Copper(CMX)
Oct Gold & Silver(CMX) Oct Platinum & Palladium(NYM) Nov Natural Gas(NYM) |
| 10/29 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Chain Deflator-Adv(Q3) 7:30 AM CDT - GDP Deflator & Adv(Q3) 9:00 AM CDT - Pending Home Sales(Sep) 9:30 AM CDT - EIA Natural Gas Report 3:30 PM CDT - Money Supply |
FN: Nov Natural Gas(NYM)
LT: Oct Feeder Cattle(CME) Oct Feeder Cattle Options(CME) |
| 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!
