Crude Oil & Nat Gas Numbers Tomorrow! +Futures Trading Levels for 01.04.24

What to look for in the last two trading days of the 1st trading week of 2024:

By Mark O’Brien, Senior Broker

General:  

Welcome to 2024 and best wishes in all your ventures for this year, including your trading, of course.  No matter what markets you’re following and trading, keep an eye out for those forces that move them for directional signals.  And in this inter-connected world there are some big-picture forces to watch as they develop in the coming months.

Inflation: Although many futures markets react to national inflation readings, global, regional and other state inflation readings will also move the markets.  Think Europe and China as important areas where inflation fluctuations can influence futures prices.

China: All by itself – its overall economic health, its GDP, its demand for the very commodities traded on U.S. futures exchanges – is a major point of reference for commodities prices.

U.S. monetary policy: plainly tied in part to inflation, our Central Bank is on the verge of entering a new phase in their unceasing mandate to control inflation and foster employment.  Financial markets are entering this year confident that rate cuts are in store beginning sometime this year – and other advanced economies will be striving and acting similarly as they see fit.

The U.S. dollar: our currency is forecast to depreciate as U.S. real economic growth and inflation slows.  Added to the pull, the country’s debt to GDP ratio as reflected in our current account deficit has become unsustainably high. Futures traders should be aware of the general inverse relationship between the value of the dollar and commodities prices. Prices of commodities tend to drop when the dollar strengthens against other major currencies. When the dollar weakens, prices of commodities generally move higher.

A busy U.S. electoral calendar:  Get ready for the Iowa Caucus (Jan. 15) and New Hampshire primary (Jan. 23).  They kick off our nation’s election cycle to November 5th when we elect our 47th president among other important state and federal office holders and with tensions already high among the major parties along with differences in economic policies, look for the futures markets to also trade with this tension in the air.

A busy international electoral calendar: South of our border, Mexico will hold a presidential vote in June. Taiwan, seemingly a pawn in U.S. – China relations, but an economic force to be reckoned with, holds its presidential election on Jan. 13.  India, now the world’s most populous nation and a rapidly developing manufacturing powerhouse also goes to the polls in April and May.  While no surprises are in store with both countries’ leaders expected to remain in power, Russia and Ukraine hold elections in March.  Everything from energy to grains have been impacted by the war between the two.

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 when it comes to Futures Trading.

Futures Trading Levels

01-04-2024

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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.