Take Profits or Wait for Home Run? 8.16.2016 - Cannon Trading

Support & Resistance Levels

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Take Profits or Wait for Home Run? 8.16.2016

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1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Tuesday August 16, 2016

Hello Traders,


Do I hold on for the “big winner” or take small profits?

To start with, this is a good problem…this means you are taking some winning trades. The answer is not a simple yes or no.

One must have a combination of both smaller, consistent winners. Also a few “runners” large profit trades, regardless if you are day trading, position trading or swing trading.

Some traders solve the problem by breaking their trading size into more than just 1 unit.

Entering Multiple Contracts: Philosophy

I think that entering multiple contracts does 3 good things for you…

Reduces fear…

Reduces greed…

And gives you a chance to hang in there for the large winners or what I call a “runner”….

In order to enter multiple contracts while day trading, one has to have the appropriate risk capital and margin requirements. But the advantage of trading more than one “unit” or splitting your trading size into two or more parts is as such:

If you enter a trade with one contract (or if you are treating your trading size as one unit, meaning you enter a trade with 4 contracts and exit the trade with 4 contracts), you can face a very quick dilemma, especially when day-trading. Consider the two following scenarios:

  1. You get in and very quickly you are up 2 mini SP points…what do you do? Do you take profit? Bring your stop loss closer? How do you avoid getting out too early or too late?
  2.  You enter a trade and it goes against you rather quickly…if you get out then it is a loser…but the little voice in your head says “what if the market goes back up?”

In the first case scenario, when the market decided to be nice to us and moved in our direction, I like to exit half of my positions relatively quickly. In the case of the mini SP, this would be around 7 ticks profit.

What I’ve found is that this will allow me to manage the rest of the trade in a much more relaxed manner. Since I’ve already locked profits in, now I can look for a proper stop close to my break-even level. I can analyze my next target more realistically and, if the market provides room for additional gains, be there to participate.

I really think that traders need to give the “runners” (large winners, directional moves) a chance. Obviously, these don’t happen often but if you know the market you’re in (crude versus the mini SP for example) and you look at recent volatility, and behavior you may decide that you will give the chance of a large winner when you are in crude oil trade because the market has been trending and the volatility gives you a chance for a good “runner” (maybe 60 ticks if you are trading a range bar chart, maybe $1.40 or so if you are trading using the hourly chart).

In the second case scenario, I can choose to risk a smaller amount or use a tight stop on the first half of my position and a bit wider stop on the other half of the position. This can help prevent the scenario when one does not get out of a trade because mentally one does not want to accept the loss.

Of course, there is much more to trading and day trading. Entry signals, exit techniques, why and when to get in a trade, and so on — all of these are key.

On the same token you may look at scheduled reports and recent price action (or lack of) in the SP and decide that you will be taking mostly small profits until the market environment changes.

But I hope that this tip will assist you while trading and will prevent some of the instances where you get out of a trade too late or too early.


Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

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Futures Trading Levels

Levels for Trade Date of  8.16.2016

Contract Sept. 2016 SP500 Nasdaq100 Dow Jones Mini Russell Dollar Index
Resistance 3 2201.42 4867.25 18726 1262.67 96.10
Resistance 2 2196.08 4851.25 18675 1252.83 95.93
Resistance 1 2191.17 4837.00 18628 1246.27 95.75
Pivot 2185.83 4821.00 18577 1236.43 95.59
Support 1 2180.92 4806.75 18530 1229.87 95.41
Support 2 2175.58 4790.75 18479 1220.03 95.24
Support 3 2170.67 4776.50 18432 1213.47 95.06
Contract Dec. Gold Sept. Silver Sept. Crude Oil Sept. Bonds Sept.   Euro
Resistance 3 1357.0 20.36 47.91 174 16/32 1.1275
Resistance 2 1353.0 20.21 46.92 173 30/32 1.1247
Resistance 1 1348.8 20.01 46.36 172 25/32 1.1224
Pivot 1344.8 19.86 45.37 172 7/32 1.1196
Support 1 1340.6 19.66 44.81 171 2/32 1.1173
Support 2 1336.6 19.51 43.82 170 16/32 1.1145
Support 3 1332.4 19.31 43.26 169 11/32 1.1122
Contract Dec. Corn Sept. Wheat Nov. Beans Dec. SoyMeal Sept. Nat Gas
Resistance 3 343.4 441.7 1027.17 347.37 2.71
Resistance 2 341.3 435.8 1019.08 341.83 2.67
Resistance 1 339.2 428.9 1014.17 338.27 2.63
Pivot 337.1 423.1 1006.08 332.73 2.60
Support 1 334.9 416.2 1001.2 329.2 2.6
Support 2 332.8 410.3 993.08 323.63 2.52
Support 3 330.7 403.4 988.17 320.07 2.48



All times are Eastern time Zone (EST)

Date 3:30pm Currency Impact Detail Actual Forecast Previous Graph
TueAug 16 4:30am GBP
CPI y/y
0.5% 0.5%
PPI Input m/m
0.6% 1.8%
RPI y/y
1.7% 1.6%
Core CPI y/y
1.3% 1.4%
HPI y/y
8.3% 8.1%
PPI Output m/m
0.3% 0.2%
5:00am EUR
German ZEW Economic Sentiment
2.1 -6.8
ZEW Economic Sentiment
-6.3 -14.7
Trade Balance
23.2B 24.5B
8:30am USD
Building Permits
1.16M 1.15M
CPI m/m
0.0% 0.2%
Core CPI m/m
0.2% 0.2%
Housing Starts
1.18M 1.19M
9:15am USD
Capacity Utilization Rate
75.7% 75.4%
Industrial Production m/m
0.2% 0.6%


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 here in 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 judgement in trading.

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