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October 16th, 2020 Newsletter

Tight Stops or Wide Stops, which one should you use when trading futures? We also take a look at corn futures trading above the psychological $4 mark.

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 defintely 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?

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2. Hot Market Report: Corn Futures Breaking above $4 per Bushel

By Joe Easton, Senior Broker

Click on image below to enlarge

wheat futures;

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

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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