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October 2, 2015 Newsletter

Trading Futures versus ETFs and Stocks. Ultra bonds bull acceleration.

October 2nd, 2015 - Issue #803

In This Issue

1. Trading 202: Trading Futures Vs. Trading ETFs
2. Hot Market Report: Ultra T Bonds - Bull Trend Accelaration
3. Economic Calendar

1. (Day) Trading Futures vs. ETFs, Stocks

By: John D Thorpe, Cannon Trading Senior Commodities Broker

According to the Wall Street Journal, assets in Exchange Traded Funds (ETFs) have grown to roughly $2 trillion dollars since their inception. Exchange Traded Funds were created to compete with the $20 trillion dollar Mutual Fund Market as it was the only market in which you could achieve broad class diversity outside of individual stocks. ETFs were also designed to overcome the drawback that mutual funds could only settle on the close of daily business at their Net Asset Value (NAV). Previously, broad diversification across market sectors could only be purchased or sold at the close of the business day based on the equity, bond or raw material elements included in the weighted averages of every component of the sector mutual fund—thus, ETFs came into play.

The first Exchange Traded Fund, the Spider or SPDR, was the S&P 500 depository receipt which was designed to track the S&P 500 stock market Index and began trading in January of 1993. No longer could an investor achieve broad market exposure on just the close of the business day, but could now buy and sell the broad market at any time throughout the trading day. Market makers and specialists provided liquidity for ETFs and continue to do so today.

During the May 2010 so called “Flash Crash”, the NYSE cancelled all trades .....


 

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2. Hot Market Report: Ultra T Bonds - Bull Trend Acceleration

From our friends at JS Services

Click on image below to enlarge

bullish ultrabonds;Technically the MKT has produced a big positive signal. On the SELL side REVERSAL strategies can be executed off the UP and +c. Expectations should be for an immediate exhaustive turn with the MKT quickly moving away from the area. Avoid SELL UP FADE strategies even with confirmation. SELL DP BREAKOUT strategies are not recommended but can be used as a signal for a FADE against the DIR. - On the BUY side accept FADE, REVERSAL and BREAKOUT strategies above the previous session’s low point. UP BREAKOUT strategies should just "go", so do not risk much. Be wary of these strategies early in the session and look to exit on the 1st break in structure. BUY DP FADE strategies are recommended over REVERSAL strategies as the MKT is expected to hold higher structure and any failure should be considered a potential negative corrective shift.

3. Economic Calendar

Source: Moore Research Center, Inc.

Date Reports Expiration & Notice Dates
10/05
Mon
9:00 AM CDT - ISM Services(Sep)
FN: Oct Live Cattle(CME)
  
10/06
Tues
7:30 AM CDT - Trade Balance(Aug)
  

10/07
Wed
6:00 AM CDT - MBA Mortgage Purchase Index
9:30 AM CDT - API & DOE Energy Stats
2:00 PM CDT - Consumer Credit(Aug)
2:00 PM CDT - Dairy Products Sales

10/08
Thurs
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
9:30 AM CDT - EIA Gas Storage
1:00 PM CDT - FOMC Minutes
3:30 PM CDT - Money Supply
 
LT: Oct Cotton(NYM)
Nov Sugar-16(ICE)
10/09
Fri
7:30 AM CDT - Export(ex-ag) & Import(ex-oil) Prices(Sep)
9:00 AM CDT - Wholesale Inventories(Aug)
11:00 AM CDT - WASDE Report & Crop Production
 
FN: Nov Sugar-16(ICE)
LT: Oct Canadian Dollar Options(CME)
Oct Currencies Options(CME)
Oct US Dollar Index Options(ICE)
Nov Coffee Options(ICE)
10/12
Mon
COLUMBUS DAY
1:00 PM CDT - Treasury Budget(Sep)
  

  

* 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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