Cannon Futures Weekly Letter
In Today’s Issue #1253
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The Week Ahead – Sanctions, Tariffs, CPI, WASDE and more earnings
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Futures 101 – Day Trading MES vs MNQ?
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Hot Market of the Week – September Natural Gas
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Broker’s Trading System of the Week – Mini NASDAQ Day Trading System
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Trading Levels for Next Week
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Trading Reports for Next Week
WEBINAR: Futures trading offers exciting opportunities—but it’s not for everyone. In this informative webinar, Advanta IRA’s Larissa Greene is joined by Ilan Levy-Mayer, an Associated Person with Cannon Trading Company, to break down the basics of the concept and how it can fit into a self-directed IRA strategy.
This webinar takes place at 12 pm ET on Tuesday, 8/12, don’t miss out! Register now.
https://www.advantaira.com/event/futures-trading/
#FuturesTrading #InvestingForRetirement #InvestingWebinar #AdvantaIRA
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Important Notices: The Week Ahead
By John Thorpe, Senior Broker
Sanctions, Tariffs, CPI, WASDE and more earnings, predominantly tier 2.
Aside from a big Tuesday CPI report and World Agricultural Supply and Demand Estimates, Tariff impacts are creating volatility in commodity markets (industrial metals, Orange Juice, Coffee, Grains) look for news about China, Canada Tariffs in addition to whatever rumblings are leaked about Russia/US talks. The on again off again nature of the talks has created golden opportunities for breakouts in some markets, rangebound trades in others. (see gold commentary below)
The potential Trump-Putin meeting has become the main commodity market news of this week, with analysts speculating about the likelihood of a comprehensive deal and the impacts this could have on oil markets. ICE Brent has been gradually sliding closer to $65 per barrel as lower sanction risks on Russia could further erode the market’s in-built risk premium, however a potential failure in the talks could spark another price rally above $70. Remember that current market drivers for Equities are hard data on Jobs, Inflation, Trump tweets and Geopolitics. Two weeks ago, I wrote this: Watch for the gold market to maintain its rangebound stance, close below 3350 (basis December) or above 3500 should denote a breakout, begin trading the December(Z) contract next week. Last week I wrote: Dec gold traded below 3350 today and the past three days but never closed meaningfully below 3350.0 (3348.60 Thurs.) Today we have breached $3500.00 oz with a high in the $3543.00 area per oz. while currently trading @$3493.00 oz as of this writing. Look for a close above $3500.00 on successive days to again accumulate longs. This may be the break from this range we are looking for. Manage your downside risk according to your account size, risk no more than 15-20% whether with options or futures.
Continued volatility to come as next week all markets will be reacting to whatever comes out of U.S. Govt leadership relating to conflicts cessation and trade deals, especially with China, India and Russia, remember that Mexico is currently under a 90-day extension.
Earnings Next Week:
- Mon. Quiet
- Tue. Sea Limited, CoreWeave
- Wed. Cisco
- Thu. Alibaba, Applied Materials, Ross Stores
- Fri. Quiet
FED SPEECHES: (all times CDT)
- Mon. Quiet
- Tues. 9 am Barkin, 9:30 am Schmid
- Wed. 6:30 am Barkin, Noon Goolsbee, 1:30 pm Bostic
- Thu. 1 pm Barkin,
- Fri. Quiet
Economic Data week:
- Mon. Quiet
- Tue. CPI, Redbook, WASDE
- Wed. EIA Crude Stocks, 17-week Bill auction
- Thur. PPI, Jobless claims, EIA NAT GAS Storage, Fed Balance sheet
- Fri. Empire State data, Retail sales, Cap Utilization, Business inventories, Mich. Consumer Sentiment
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Day trading futures using correlated markets for spread strategies
By Ilan Levy-Mayer, VP
Day trading futures using correlated markets for spread strategies—such as trading the Micro Nasdaq (MNQ) against the Micro S&P 500 (MES)—offers a powerful way to manage directional risk while capitalizing on relative performance.
These two indices often move in tandem, but subtle divergences can emerge intraday due to sector weightings, earnings reports, or macro headlines. By going long one and short the other, traders can isolate relative strength or weakness between tech-heavy Nasdaq and broader-market S&P exposure. This approach reduces exposure to broad market swings and instead focuses on the spread between the two instruments, which tends to revert to a mean over time.
To execute this effectively, traders should monitor correlation metrics, use synchronized charting (e.g., Renko or range bars), and define clear entry/exit rules based on spread behavior rather than outright price movement. It’s important to size positions proportionally—since MNQ and MES have different volatility profiles—and to track the spread ratio rather than individual P&L. Economic releases, Fed commentary, and sector rotation can all influence spread dynamics, so staying nimble and avoiding over-leverage is key.
This strategy works best in liquid hours (8:30 AM–11:30 AM EST) when volume and volatility are high but more predictable.
Next steps for exploring and refining your MNQ vs MES spread strategy:
Step-by-Step Exploration of the MNQ/MES Spread Strategy
To begin, monitor both MNQ and MES in real time using side-by-side charts and DOMs (Depth of Market) to observe how they move in relation to each other. Pay attention to divergences during key market events, such as economic releases or sector rotations. Start in a simulated environment to test your thesis without capital risk. Try creating an order ticket that treats the spread as a unified trade—some platforms allow custom spread orders, while others may require manual execution through two DOMs. Compare both methods to see which offers better control and execution efficiency.
Refinement Through Data and Journaling
Track daily price movements and note how the spread behaves—record the dollar value difference between MNQ and MES and how it would have impacted your P&L if traded as a spread. Consider experimenting with different ratios, such as 2 MES contracts versus 1 MNQ, to balance volatility and margin requirements. Keep a detailed journal of your observations, trade setups, and emotional responses. This will help identify patterns and refine your edge.
Finally, reach out to to our series 3 licensed brokers with ANY questions! who specialize in index spreads—they can offer insights on execution, risk management, and platform-specific tips that accelerate your learning curve. |
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Hot Market of the Week
Hot market of the week is provided by QT Market Center, A Swiss army knife charting package that’s not just for Hedgers, Cooperatives and Farmers alike but also for Spread traders, Swing traders and shorter time frame application for intraday traders with a unique proprietary indicator that can be applied to your specific trading needs.
September natural gas broke down into a new contract low where it satisfied its third downside PriceCount objective. It would be normal to get a near-term reaction in the form of a consolidation or corrective trade, at least. At this point, IF the chart can resume its break with new sustained lows, we are left with the low-percentage fourth count to the 1.77 area that we view as highly unlikely. |
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The PriceCount study is a tool that can help to project the distance of a move in price. The counts are not intended to be an ‘exact’ science but rather offer a target area for the four objectives which are based off the first leg of a move with each subsequent count having a smaller percentage of being achieved.
It is normal for the chart to react by correcting or consolidating at an objective and then either resuming its move or reversing trend. Best utilized in conjunction with other technical tools, PriceCounts offer one more way to analyze charts and help to manage your positions and risk. Learn more at www.qtchartoftheday.com
Trading in futures, options, securities, derivatives or OTC products entails significant risks which must be understood prior to trading and may not be appropriate for all investors.
Past performance of actual trades or strategies is not necessarily indicative of future results.
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Brokers Trading System of the Week
Sentinel E-mini Nasdaq 15′
Markets Traded: Mini NASDAQ Futures NQ
System Type: Swing Trading
Risk per Trade: varies
Trading Rules: Partially Disclosed
Suggested Capital: $20,000
Developer Fee per contract: $120 Monthly Subscription
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| Disclaimer The risk of trading can be substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance is not necessarily indicative of future results.
IMPORTANT RISK DISCLOSURE
Futures trading is complex and carries the risk of substantial losses. It is not suitable for all investors. The ability to withstand losses and to adhere to a particular trading program in spite of trading losses are material points which can adversely affect investor returns.
The returns for trading systems listed throughout this website are hypothetical in that they represent returns in a model account. The model account rises or falls by the average single contract profit and loss achieved by clients trading actual money pursuant to the listed system’s trading signals on the appropriate dates (client fills), or if no actual client profit or loss available – by the hypothetical single contract profit and loss of trades generated by the system’s trading signals on that day in real time (real-time) less slippage, or if no real time profit or loss available – by the hypothetical single contract profit and loss of trades generated by running the system logic backwards on backadjusted data (backadjusted).
Please read carefully the CFTC required disclaimer regarding hypothetical results below. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING.
FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS.
THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
Please read full disclaimer HERE.
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Would you like to get weekly updates on real-time, results of systems mentioned above?
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Trading Levels for Next Week
Daily Levels for August 11th, 2025
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Would you like to receive daily support & resistance levels?
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Trading Reports for Next Week
First Notice (FN), Last trading (LT) Days for the Week:
www.mrci.com
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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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