April 4th, 2014 - Issue #731
In This Issue
1. There is more to daytrading than the mini SP 500...
2. Hot Market Review: Wheat Market
3. Economic Calendar
1. There is more to daytrading than the mini SP 500...
Different market, Different Trading Environments
Each market has a different personality and behavior is dependent on the time of day when it's most active.. If you are finding that the ES ( mini SP) is not giving you enough risk/opportunities then start monitoring a couple of other markets and perhaps explore them in the demo / simulated mode.
There are more than a few markets that I think are suitable for day-trading. Below you will find some observations, tips along with what is unique about these markets, their personality and the most active trading hours.
| Interest Rates, 10 year and 30 year. | |
| In most platforms, the symbols are ZB for 30 year bonds and ZN for 10 year notes. The current front month is June which is M. So ZBM4 for example. | |
| Product Symbol | ZB |
| Contract Size | The unit of trading shall be U.S. Treasury Bonds having a face value at maturity of one hundred thousand dollars ($100,000) or multiples there of |
| Price Quotation | Points ($1,000) and 1/32 of a point. For example, 134-16 represents 134 16/32. Par is on the basis of 100 points. |
| Product Symbol | ZN |
| Underlying Unit | One U.S. Treasury note having a face value at maturity of $100,000. |
| Deliverable Grade | U.S. Treasury notes with a remaining term to maturity of at least six and a half years, but not more than 10 years, from the first day of the delivery month. The invoice price equals the futures settlement price times a conversion factor, plus accrued interest. The conversion factor is the price of the delivered note ($1 par value) to yield 6 percent. |
| Price Quote | Points ($1,000) and halves of 1/32 of a point. For example, 126-16 represents 126 16/32 and 126-165 represents 126 16.5/32. Par is on the basis of 100 points. |
| Tick Size (minimum fluctuation) |
One-half of one thirty-second (1/32) of one point ($15.625, rounded up to the nearest cent per contract), except for intermonth spreads, where the minimum price fluctuation shall be one-quarter of one thirty-second of one point ($7.8125 per contract). |
| Contract Months | The first five consecutive contracts in the March, June, September, and December quarterly cycle. |
These contracts are often affected by many of the economic reports that come out at 8:30 Am Eastern and there is very active volume between the hours of 8 am EST and 3 PM EST
Volume on both contracts is very good. Ten years will often have 1 million contracts traded per day
(might be the second most active US futures market after the mini SP 500) and the bonds will avg. around 300,000 contracts.
These markets can experience very volatile movements during and right after different reports but then will often trade smooth or in an intraday trend the rest of the day.
Currency Futures Markets.
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2. Hot Market Review: Wheat Market
From our friend Jim Wyckoff
Jim has an excellent daily newsletter where he reviews different markets, alerts you for potential trades and much more. Included is his great bi-weekly newsletter with charts and a little longer term outlook. We recommend checking out his website, educational CDROM, and services at www.jimwyckoff.com. Click on image below to enlarge
See on the daily bar chart for May soft red winter wheat futures that bulls have faded this week as a fledgling downtrend line has formed to compete with an uptrend line. The wheat market bulls need to step up and show power soon, or else it will quickly become evident that that market has topped out.
3. Economic Calendar
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
| 04/07 Mon |
2:00 PM CDT - Consumer Credit(Feb) | FN: Apr Live Cattle(CME) |
| 04/08 Tues |
9:00 AM CDT - JOLTS - Job Openings(Feb) |
LT: May Sugar-16(ICE) |
| 04/09 Wed |
6:00 AM CDT - MBA Mortgage Index 9:00 AM CDT - Wholesale Inventories(Feb) 9:30 AM CDT - API & DOE Energy Stats 11:00 AM CDT - WASDE Report & Crop Production 1:00 PM CDT - FOMC Minutes 3:00 PM CDT - Dairy Products Sales |
FN: May Sugar-16(ICE) |
| 04/10 Thurs |
7:30 AM CDT - USDA Weekly Export Sales 7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Export(ex-ag) & Import(ex-oil) Prices(Mar) 9:30 AM CDT - EIA Gas Storage 1:00 PM CDT - Treasury Budget(Mar) 3:30 PM CDT - Money Supply |
|
| 04/11 Fri |
7:30 AM CDT - Core PPI & PPI(Mar) 8:55 AM CDT - Mich Sentiment(Apr) |
LT: Apr Eurodollar Options(CME) May Cotton Options(NYM) May Coffee Options(ICE) |
| 04/14 Mon |
7:30 AM CDT - Retail Sales(Mar) 7:30 AM CDT - Retail Sales-Ex Auto(Mar) 9:00 AM CDT - Business Inventories(Feb) |
LT: Apr Eurodollars(CME) Apr Lean Hogs(CME) Apr Lean Hogs Options(CME) |
* 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!
