March 21, 2014 - Issue #729
In This Issue
1. Day Trading Commodities with Crude Oil Futures
2. Hot Market Review: Gold Market Update
3. Economic Calendar
1. Day Trading Commodities with Crude Oil Futures
By: Ilan Levy-Mayer, Cannon Trading Commodities Broker & VP
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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2. Hot Market Review: Lean Hogs
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 April gold futures prices are still in a 2.5-month-old uptrend on the daily bar chart and seeing a decent corrective pullback after hitting a six-month high Monday. The gold still bulls have the overall near-term technical advantage, but need to step up and show some fresh power soon. Bulls' next upside near-term price breakout objective is to produce a close above technical resistance at this week's high of $1,392.60. Bears' next near-term downside breakout price objective is closing prices below technical support at the March low of $1,326.60.
3. Economic Calendar
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
| 03/24 Mon |
FN: Apr Crude Lt(NYM) |
|
| 03/25 Tues |
8:00 AM CDT - Case-Shiller 20-City Index(Jan) 8:00 AM CDT - FHFA Housing Price Index(Jan) 9:00 AM CDT - Consumer Confidence(Mar) 9:00 AM CDT - New Home Sales(Feb)) |
|
| 03/26 Wed |
6:00 AM CDT - MBA Mortgage Purchase Index 7:30 AM CDT - Durable Goods-Ex Transportation(Feb) 7:30 AM CDT - Durable Orders(Feb) 9:30 AM CDT - API & DOE Energy Stats 3:00 PM CDT - Dairy Products Sales |
LT: Apr Copper Options(CMX) Apr Gold Options(CMX) Apr Silver Options(CMX) Apr Natural Gas Options(NYM) Apr RBOB Gasoline & ULSD Options(NYM) |
| 03/27 Thurs |
7:30 AM CDT - USDA Weekly Export Sales 7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Export(ex-ag) & Import Prices(ex-oil)(Feb) 7:30 AM CDT - Retail Sales(Feb) 7:30 AM CDT - Retail Sales(ex-auto)(Feb) 9:00 AM CDT - Business Inventories(Jan) 9:30 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply |
LT: Mar Copper(CMX) Mar Gold(CMX) Mar Silver(CMX) Mar Platinum(NYM) Mar Palladium(NYM) Mar Feeder Cattle(CME) Apr Natural Gas(NYM) Mar Feeder Cattle Options(CME) |
| 03/28 Fri |
7:30 AM CDT - PCE Prices-Core(Feb) 7:30 AM CDT - Personal Income & Spending(Feb) 8:55 AM CDT - Michigan Sentiment-Final(Mar) |
FN: Apr Natural Gas(NYM) |
| 03/31 Mon |
8:45 AM CDT - Chicago PMI(Mar) 11:00 AM CDT - Grain Stocks 11:00 AM CDT - Prospective Plantings |
FN: Apr Copper(CMX) Apr Gold(CMX) Apr Silver(CMX) Apr Platinum(NYM) Apr Palladium(NYM) LT: Mar 2,5 Year Notes(CBT) Mar Fed Funds(CME) Apr RBOB Gasoline & ULSD(NYM) Mar Fed Funds Options(CME) Apr Lumber 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!
