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Category: Futures Trading

Futures trading is done by two main parties, one of which is the hedger and the other one is the speculator. Where a speculator is there to trade for either their own accounts or that of their clients, a hedger always uses futures as a possible protection from losses. Hedgers can also be described as individuals or business owners who are more risk averse. Speculators and hedgers are likely to benefit from futures trading if the trader has a strong ability to analyze the markets and understands that future behavior. Though futures can behigh risk, they offer an equally high return and are thus very tempting.

In case you are new to futures trading you need to understand how things work. We at Cannon Trading are there to help with your understanding of all the elements of futures trading and also counsel and advise you with the same. Our knowledge base featured on our website, is a store house of information. In order to know every aspect of futures trading, you must read through these articles that have been listed in this category archive. Go through it and get better informed!

Higher Market Volatility During Labor Day Weekend | Support and Resistance Levels

Posted on by Ilan

In this post:

1. Market Commentary
2. Support and Resistance Levels
3. Economic Reports
4. Highlighted Earnings Releases

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1. Market Commentary

Next two days are full of economic reports and ahead of Labor Day weekend.

I expect even higher volatility the next two trading days.

Wishing you a great trading month in September.

Our weekly newsletter, includes a good article on volume/ open interest along with Holiday Trading Hours.

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. Continue reading “Higher Market Volatility During Labor Day Weekend | Support and Resistance Levels”

Higher Volume in Futures Markets | Support and Resistance Levels

Posted on by Ilan

In this post:
1. Market Commentary
2. Daily Futures Chart for Mini S&P 500
3. Support and Resistance Levels
4. Economic Reports
4. Highlighted Earnings Releases

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1. Market Commentary

Interesting price action today.

Market visited both positive and negative territory with better volume than last few sessions.

Market made recent highs at 1218.75 yet finished slightly lower to unchanged.

Tomorrow is the last trading day of the month.

Overall as one can see from chart below, open interest has risen since we first sold off hard, while volume has dropped since the sell off during the first few days of August.

What does it mean to me? My guess is that the bounce we have seen after the 1077 Aug 9th low on the SP500 is a bear market rally. While we may see a bounce to 1244 -1283 levels, I feel there are bigger chances for the downtrend to resumeand for the market to visit Aug 9th lows and perhaps lower.

As always the “Million $$ questions” are:

When does one enter?

How does one protect oneself in case this analysis is wrong?

How does one manage the trade once one has answered the first two questions above….

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2. Support and Resistance Levels!

Contract (Sept. 2011) SP500 (big & Mini) Nasdaq100 (big & Mini) Dow Jones (big & Mini) Mini Russell
Resistance 3 1244.33 2300.83 11823 755.33
Resistance 2 1231.42 2275.17 11721 743.47
Resistance 1 1219.83 2252.58 11620 734.03
Pivot 1206.92 2226.92 11518 722.17
Support 1 1195.33 2204.33 11417 712.73
Support 2 1182.42 2178.67 11315 700.87
Support 3 1170.83 2156.08 11214 691.43

 

Contract Dec. Gold Sept. Euro Oct. Crude Oil Dec. Bonds
Resistance 3 1865.0 1.4672 92.56 138 10/32
Resistance 2 1850.7 1.4601 90.88 137 29/32
Resistance 1 1845.6 1.4522 89.81 137 16/32
Pivot 1831.3 1.4451 88.13 137 3/32
Support 1 1826.2 1.4372 87.06 136 22/32
Support 2 1811.9 1.4301 85.38 136 9/32
Support 3 1806.8 1.4222 84.31 135 28/32

Continue reading “Higher Volume in Futures Markets | Support and Resistance Levels”

Key Resistance Level in Futures Trading Price Action | Support and Resistance Levels

Posted on by Ilan

Market rallied close to 3% on the SP and Dow Jones. Again it did so on much lighter volume than when it sold off last few weeks but nonetheless one CANNOT argue with price action. We are approaching the 50% retracement level from the highs made on July 8th to lows made Aug 9th. That level on the mini SP is 1212.50. I believe that the 1212 to 1219 zone is an important resistance level to watch. If we break above it with meaningful volume, it may be a sign of further room to the upside, on the other hand if we fail against it and volume picks up with price action going lower, it may be a sign of resumed selling. As always in our business… time will tell. Plenty of economic reports this week, both in the US and in Europe. Last but not least it is the end of the month…. Wishing you great trading this week and Daily chart of the mini SP 500 for your review below.

Daily Futures chart for Mini S&P 500 from August 29th, 2011

Daily Futures chart for Mini S&P 500 from August 29th, 2011

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. Continue reading “Key Resistance Level in Futures Trading Price Action | Support and Resistance Levels”

Using Algorithms During High Market Volatility | Support and Resistance Levels

Posted on by Ilan

Another day full of two sided moves and volatility.

This type of trading action works well for a set of studies/ ALGO I developed.

You can see a screen shot below which pretty much speaks for itself.

Minute Futures chart for 10,000 Contracts CVB from August 26th, 2011

Minute Futures chart for 10,000 Contracts CVB from August 26th, 2011

I share my studies and ALGO in two ways.

The first is by having a daily live chart service, where subscribers/ trial members get a unique invitation to view my screen along with live charts, trade signals and trade philosophy. I call it live webinar.

The second method is available for sierra charts / ATcharts users . Those who are interested will get my ALGO/ study pac via email and will be able to apply it on their sierra charts for different markets, different time frames etc.

Both methods are available for a free trial if you did not have one yet.

To read more and request a trial, visit our futures trading webinar page or simply send me an email with your sierra/ ATcharts user name.

Have a great weekend!

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. Continue reading “Using Algorithms During High Market Volatility | Support and Resistance Levels”

Futures Trading Levels, Stock Indeces Bounce Back

Posted on by Ilan

Strong bounce on stock indices today across the board. As one can see, market is volatile and one day it seems the market just can’t stop selling, the next it flips around and runs higher….part of volatility, part of uncertainty, fear and greed.

the only advice I can share at this point is be ready for the unexpected. Know yourself, what your goals are out of each trade, how much risk tolerance you have the stomach for and then and only then decide on a trading strategy.

Levels to be aware of as volatility will resume in the mini S&P 500 below:

Daily Futures chart of the S&P 500 from August 23rd, 2011

Daily Futures chart of the S&P 500 from August 23rd, 2011

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. Continue reading “Futures Trading Levels, Stock Indeces Bounce Back”

Futures Trading Levels, Trading Plans

Posted on by Ilan

On Friday I wrote the following regarding today’s session:

I have no idea of what to expect of this market for next week. Probably more volatility?

I guess I will wait and see price action Sunday night and Monday morning before forming an opinion.

Well after today’s price action I favor the downside as I see the close today to be bearish to neutral.

As I wrote before, you can have the right market direction and feel for the market and still lose… Maybe more important is the trading plan, i.e entry level, potential targets and stops etc. or to make it short….PLAN YOUR TRADE, TRADE YOUR PLAN.

Daily chart of the DOW JONES CASH index for your review below:

Daily Futures chart of the Dow Jones Cash Index from August 22nd, 2011

Daily Futures chart of the Dow Jones Cash Index from August 22nd, 2011

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. Continue reading “Futures Trading Levels, Trading Plans”

Futures Trading Levels, Uncertain Near Future Expectations

Posted on by Ilan

Another interesting option expiration day. Many changes in market direction, volatility in both sides of the market.

I have no idea of what to expect of this market for next week. Probably more volatility?

I guess I will wait and see price action Sunday night and Monday morning before forming an opinion.

Wishing you a great weekend and recharge for next week trading.

Mini Russell 2000 daily chart for your review below:

Daily Futures chart of the Mini Russell 2000 from August 19th, 2011

Daily Futures chart of the Mini Russell 2000 from August 19th, 2011

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. Continue reading “Futures Trading Levels, Uncertain Near Future Expectations”

Futures Trading Levels, It Is a Bear Market

Posted on by Ilan

Per my comments yesterday, we did see the market take the next leg after consolidating for a few days and it was a down leg….and again volume was significantly higher than we had during the bounce.

The trend is obviously down, but bear markets can also have powerful rallies, intraday and on daily chart basis. Separate the daily chart from your minute to minute trading action. Know what time frame you are trading and know your trading goals. If you are a swing trader then look at the daily chart AND hourly chart but don’t let the shorter time frame picture distort your longer term view. On the flip side, if you are a day trader who is using primarily 1 min chart or tick charts etc., understand what the daily and hourly picture looks like but make your trading decisions based on the time frame you are working with.

Daily chart for your review with some FIB extensions on the way down. 1206.75 is now the first MAJOR resistance, 1103 is the first defense before we visit the 1077 lows made August 9th

Daily Futures chart of the Mini S&P 500 from August 18th, 2011

Daily Futures chart of the Mini S&P 500 from August 18th, 2011

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. Continue reading “Futures Trading Levels, It Is a Bear Market”

Futures Trading Levels, Next Leg: Up or Down?

Posted on by Ilan

Stock indices are consolidating for the last 3 sessions, trading between 1176 and 1207 on the mini SP 500.

The fact that the consolidation is taking place after a big move down and on lesser volume suggests to me that we are about to see another big move. My guess is that if we break below 1180 on the way down, the next big leg is lower and if we break above 1212 then the next big leg will be towards the 1280 region. Only time will tell if my speculation is correct. In the mean time, know the time frame you are trading, the risk you are willing to take, calculate probabilities and risk / reward and then once you have planned your trade, trade your plan. And yes, I know, it is much easier said than done…..

Daily Mini SP500 chart for your review below with the levels I mentioned above

Daily Futures chart of the Mini S&P 500 from August 17th, 2011

Daily Futures chart of the Mini S&P 500 from August 17th, 2011

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. Continue reading “Futures Trading Levels, Next Leg: Up or Down?”

Futures Trading Levels, Resistance at the Fibonacci Level

Posted on by Ilan

Many of our International clients trade European indices, mostly the DAX and Euro Stoxx 50.

Daily chart of the EuroStoxx 50 for your review below, note that the recent rally has stopped right against the 38.2% FIB level. Short term resistance is 2348.5 , near term support is 2242.0

Daily Futures chart of the EuroStoxx 50 from August 16th, 2011

Daily Futures chart of the EuroStoxx 50 from August 16th, 2011

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. Continue reading “Futures Trading Levels, Resistance at the Fibonacci Level”

RISK DISCLOSURE: Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.