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Support & Resistance Levels Daily Support & Resistance Levels

This Blog provides futures market outlook for different commodities and futures trading markets, mostly stock index futures, as well as support and resistance levels for Crude Oil futures, Gold futures, Euro currency and others. At times the daily trading blog will include educational information about different aspects of commodity and futures trading.


COT reports and other valuable information available from the CFTC 4.20.2018

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Voted #1 Blog and #1 Brokerage Services on  TraderPlanet   for 2016!!

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Dear Traders,

 

A Quick Review of Valuable  Reports Made Available by the C.F.T.C. for All Traders
By John Thorpe, Cannon Trading Senior Broker
A data source that escapes many futures traders and should be reviewed if you are a serious position trader are the reports compiled on a weekly basis by our chief regulator, The Commodity Futures Trading Commission CFTC. These reports offer insight into market imbalances, liquidity, and large bank, both domestic and international, participation. I encourage all traders, even day traders, to familiarize yourself with these reports as they provide a salient view of market structure given a particular futures contract as the structure changes over time.
There is:
1.) BPR’s “Bank Participation Rate” reports which, by open interest you can view market imbalances. Bank Participation Rate Webpage
Another report compiled by the CFTC is the:
2.) Net position changes. The Large Trader Net Position Changes and the Trading Account Net Position Changes data provides the public with a view of the amount of trading that results in net changes to positions at the trader level and at the account level. Net Position Changes Webpage
And Finally:
3.) COT reports provide a breakdown of each Tuesday’s open interest for futures and options on futures markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. Commitment of Traders Report Webpage
Below is an example of the COT Report Webpage.

Read the rest of this entry »

Posted in: Future Trading News  

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7 things to know before trading Wheat Futures 4.19.2018

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Voted #1 Blog and #1 Brokerage Services on  TraderPlanet   for 2016!!

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Dear Traders,

7 Things to Know Before you Start Trading Wheat Futures

Author: Joseph Easton, Senior Broker at Cannon Trading
  1. The Basics:
There are two types of Wheat most commonly traded…
“Chicago Soft Red Winter (SRW) and KC Hard Red Winter (HRW) are the global industry standards for wheat. Chicago SRW Wheat is the most liquid Wheat futures contract in the world, trading the equivalent of more than 15 million tons each day in 2013-9 ½ times more than the largest European contract. Producers, processors, millers and exporters continue to look to Chicago SRW and KC HRW Wheat for the liquidity that is critical for any risk management solution.
Liquidity means that you can execute positions quickly, effectively and efficiently. Liquidity offers more flexibility in structuring hedging strategies to meet your timing and market needs. And when the world is facing new challenges in Wheat risk management, liquidity provides the security you need in order to respond with confidence” – CME Group

 

Read the rest of this entry »

Posted in: Future Trading News  

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A Quick Review of Valuable Reports Made Available by the C.F.T.C. for All Traders

A Quick Review of Valuable  Reports Made Available by the C.F.T.C. for All Traders

By John Thorpe, Cannon Trading Senior Broker

 

A data source that escapes many futures traders and should be reviewed if you are a serious position trader are the reports compiled on a weekly basis by our chief regulator, The Commodity Futures Trading Commission CFTC. These reports offer insight into market imbalances, liquidity, and large bank, both domestic and international, participation. I encourage all traders, even day traders, to familiarize yourself with these reports as they provide a salient view of market structure given a particular futures contract as the structure changes over time.

There is:

1.) BPR’s “Bank Participation Rate” reports which, by open interest you can view market imbalances. Bank Participation Rate Webpage

Another report compiled by the CFTC is the:

2.) Net position changes. The Large Trader Net Position Changes and the Trading Account Net Position Changes data provides the public with a view of the amount of trading that results in net changes to positions at the trader level and at the account level. Net Position Changes Webpage

And Finally:

3.) COT reports provide a breakdown of each Tuesday’s open interest for futures and options on futures markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. Commitment of Traders Report Webpage

Below is an example of the COT Report Webpage.

 

 

Commitments of Traders (COT) Reports Descriptions

Introduction and Classification Methodology

The Commodity Futures Trading Commission (Commission or CFTC) publishes the Commitments of Traders (COT) reports to help the public understand market dynamics. Specifically, the COT reports provide a breakdown of each Tuesday’s open interest for futures and options on futures markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC.

The COT reports are based on position data supplied by reporting firms (FCMs, clearing members, foreign brokers and exchanges). While the position data is supplied by reporting firms, the actual trader category or classification is based on the predominant business purpose self-reported by traders on the CFTC Form 401 and is subject to review by CFTC staff for reasonableness.2 CFTC staff does not know specific reasons for traders’ positions and hence this information does not factor in determining trader classifications. In practice this means, for example, that the position data for a trader classified in the “producer/merchant/processor/user” category for a particular commodity will include all of its positions in that commodity, regardless of whether the position is for hedging or speculation. Note that traders are able to report business purpose by commodity and, therefore, can have different classifications in the COT reports for different commodities. For one of the reports, Traders in Financial Futures, traders are classified in the same category for all commodities.

Due to legal restraints (CEA Section 8 data and confidential business practices), the CFTC does not publish information on how individual traders are classified in the COT reports.

Generally, the data in the COT reports is from Tuesday and released Friday. The CFTC receives the data from the reporting firms on Wednesday morning and then corrects and verifies the data for release by Friday afternoon.

Types of Reports

There are four main reports:

  1. Legacy
  2. Supplemental
  3. Disaggregated
  4. Traders in Financial Futures

The Legacy reports are broken down by exchange. These reports have a futures only report and a combined futures and options report. Legacy reports break down the reportable open interest positions into two classifications: non-commercial and commercial traders.

The Supplemental report includes 13 select agricultural commodity contracts for combined futures and options positions. Supplemental reports break down the reportable open interest positions into three trader classifications: non-commercial, commercial, and index traders.

The Disaggregated reports are broken down by agriculture, petroleum and products, natural gas and products, electricity and metals and other physical contracts. These reports have a futures only report and a combined futures and options report. The Disaggregated reports break down the reportable open interest positions into four classifications:

  1. Producer/Merchant/Processor/User
  2. Swap Dealers
  3. Managed Money
  4. Other Reportables

Please see the “Disaggregated Explanatory Notes” for further information.

The Traders in Financial Futures (TFF) report includes financial contracts, such as currencies, US Treasury securities, Eurodollars, stocks, VIX and Bloomberg commodity index.3 These reports have a futures only report and a combined futures and options report. The TFF report breaks down the reportable open interest positions into four classifications:

  1. Dealer/Intermediary
  2. Asset Manager/Institutional
  3. Leveraged Funds
  4. Other Reportables

Please see the “Traders in Financial Futures Explanatory Notes” for further information.

Short and Long Format of Reports

The Legacy and Disaggregated reports are available in both a short and long format. The TFF report is only available in the long format. The Supplemental report is only available in the short format.

The short format shows reportable open interest and week-to-week open interest changes separately by reportable and non-reportable positions. For reportable positions, additional data is provided for commercial and non-commercial holdings, spreading (in certain categories only), changes from the previous report, percent of open interest by category, and numbers of traders.

The long report, in addition to the information in the short report, groups the data by crop year, where appropriate, and shows the concentration of positions held by the largest four and eight traders.

IMPORTANT PLEASE NOTE:

Trading commodity futures and options involves substantial risk of loss.
The recommendations 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 performance is not necessarily indicative of future results.

 

Posted in: Future Trading News  

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Day Trading Crude Oil Futures & Levels 4-18-2018

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Voted #1 Blog and #1 Brokerage Services on  TraderPlanet   for 2016!!

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Dear Traders,

With the energy numbers coming out tomorrow, which impact crude oil quite a bit, I thought it would be a good time to share this article I wrote once again:

Crude Oil Futures volatility offers a “different market personality” than stock index futures. Here is some of the things you need to know about day trading 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 1000 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.

Read the rest of this entry »

Tags: > > Posted in: Crude Oil   | Day Trading   | Future Trading News  

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7 Things to Know Before you Start Trading Wheat Futures

Author: Joseph Easton, Senior Broker at Cannon Trading

  1. The Basics:

There are two types of Wheat most commonly traded…

”Chicago Soft Red Winter (SRW) and KC Hard Red Winter (HRW) are the global industry standards for wheat. Chicago SRW Wheat is the most liquid Wheat futures contract in the world, trading the equivalent of more than 15 million tons each day in 2013–9 ½ times more than the largest European contract. Producers, processors, millers and exporters continue to look to Chicago SRW and KC HRW Wheat for the liquidity that is critical for any risk management solution.

Liquidity means that you can execute positions quickly, effectively and efficiently. Liquidity offers more flexibility in structuring hedging strategies to meet your timing and market needs. And when the world is facing new challenges in Wheat risk management, liquidity provides the security you need in order to respond with confidence” – CME Group

  • Types of  Wheat Futures: Chicago SRW Wheat Futures  and KC HRW Wheat Futures
  • Contract specifications: One contract (5,000 bushels) of deliverable (~ 136 Metric Tons)
  • Common Symbol:  CME Globex: ZW  and CME Globex: KE

Read the rest of this entry »

Tags: > > Posted in: Commodity Trading   | Future Trading News  

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