See on the daily bar chart for the Goldman Sachs Commodity Index that the raw commodity sector is presently in a very bad way--this week hitting a 27-month low.
In This Issue
1. Day Trading Commodities with Crude Oil Futures
2. Bears Continue Strangle-Hold on Raw Commodity Sector
3. Economic Calendar
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 100,000 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..
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From our friend Jim Wyckoff
See on the daily bar chart for the Goldman Sachs Commodity Index that the raw commodity sector is presently in a very bad way--this week hitting a 27-month low. Until the daily chart for the GSCI starts to show some technical strength (namely breaking the downtrend and forming a fledgling uptrend), most raw commodity market bulls will continue to suffer. By the way, if you need better methods to improve upon your selection of trades, and on entry and exit strategies?
When looking at Stocks in general, I like to look at the SP500 as I feel this index is the leader amongst stock index futures. Looking at a daily chart below we see that the market has a LOT of respect to some timing symmetry.
Source: Moore Research Center, Inc.
Date | Reports | Expiration & Notice Dates |
09/22 Mon |
9:00 AM CDT - Existing Home Sales(Aug) 2:00 PM CDT - Cold Storage |
LT: Oct Crude Lt(NYM) |
09/23 Tues |
8:00 AM CDT - FHFA Housing Price Index(Jul) |
|
09/24 Wed |
6:00 AM CDT - MBA Mortgage Index 9:00 AM CDT - New Home Sales(Aug) 9:30 AM CDT - API & DOE Energy Stats 3:00 PM CDT - Dairy Products Sales |
FN: Oct Cotton(ICE) Oct Crude Lt(NYM) |
09/25 Thurs |
7:30 AM CDT - USDA Weekly Export Sales 7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - GDP-Second Estimate(Q2) 7:30 AM CDT - GDP Deflator-Second Estimate(Q2) 9:00 AM CDT - Pending Home Sales(Jul) 9:30 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply |
LT: Sep Feeder Cattle(CME) Sep Feeder Cattle Options(CME) Oct Copper Options(CMX) Oct Gold & Silver Options(CMX) Oct Natural Gas Options(NYM) Oct RBOB & ULSD Options(NYM) ) |
09/26 Fri |
7:30 AM CDT - GDP-Third Estimate(Q2) 7:30 AM CDT - GDP Deflator-Third Estimate(Q2) 8:55 AM CDT - Michigan Sentiment-Final(Sep) 2:00 PM CDT - Quarterly Hogs & Pigs |
LT: Sep Copper(CMX) Sep Gold & Silver(CMX) Sep Platinum & Palladium(NYM) Oct Natural Gas(NYM) Oct 2,5,10 Year Notes Options(CBT) Oct Bonds Options(CBT) Oct Wheat Options(CBT) Oct Corn Options(CBT) Oct Rough Rice Options(CBT) Oct Oats Options(CBT) Oct Soybeans,Soymeal,Soyoil Options(CBT) |
09/29 Mon |
7:30 AM CDT - PCE Prices-Core(Aug) 7:30 AM CDT - Personal Income & Spending(Aug) 9:00 AM CDT - Pending Home Sales(Aug) |
FN: Oct Natural Gas(NYM) |
* 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!