Posted By: Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
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In the last few weeks we witnessed very low volatility with low volume which encouraged me to share the following with you on the different types of trading days ( PS: The other solution is to also look at other markets for day trading like gold , crude oil and natural gas ) :
- In my opinion there are 3 main types of trading days.
- The most common day are two sided trading action with swings up and down – this type of trading day is most suitable for using support and resistance levels along with overbought/oversold indicators.
- Strong trending days, mostly one directional – this type of trading day is the least common, many times will happen on Mondays and maybe 3-5 times a month at most – this type of trading day is most suitable for using ADX, MACD crossovers and pretty much looking for pullbacks to jump on the trend.
- Slow and/or choppy trading days – this type of trading day is best suited for taking small profits from the market by looking at volume spikes, using stochastics as possible entry signals and usually wait for a pullback before jumping in.
- A good question I’ve been asked is how can one asses what type of trading day we will have while the market is still trading….I have been doing some work in finding the answers and will be happy to hear feedback via email but here are some initial observations:
- Was the overnight session a wide, two sided trading range? If the answer is yes, good chances for similar trading day during the primary session (primary session is when the cash/stock market is open)
- Mondays have the highest chance for trending days
- The behavior of the first hour of trading can also suggests the type of action for the rest of the day.
- If the first 30 minutes of the trading day have good volume, better chances for type 1 or type 2 trading days.
- Low volume during the first 30 minutes can suggest a choppy (type 3 trading day)
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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Levels for Trade Date of 02.22.2017
|Contract March 2017||SP500||Nasdaq100||Dow Jones||Mini Russell||Dollar Index|
|Contract||Apr. Gold||March Silver||April Crude Oil||Mar. Bonds||March Euro|
|Resistance 3||1255.9||18.34||56.34||152 29/32||1.0725|
|Resistance 2||1248.0||18.21||55.68||152 10/32||1.0683|
|Resistance 1||1242.5||18.09||55.03||151 25/32||1.0617|
|Support 1||1229.1||17.83||53.72||150 21/32||1.0509|
|Support 2||1221.2||17.70||53.06||150 2/32||1.0467|
|Support 3||1215.7||17.58||52.41||149 17/32||1.0401|
|Contract||March Corn||March Wheat||Mar. Beans||March SoyMeal||April Nat Gas|
German Ifo Business Climate
Second Estimate GDP q/q
Prelim Business Investment q/q
Index of Services 3m/3m
Final CPI y/y
Final Core CPI y/y
Long Term Refinancing Operation
German 30-y Bond Auction
MPC Member Cunliffe Speaks
Belgian NBB Business Climate
Existing Home Sales
FOMC Member Powell Speaks
FOMC Meeting Minutes
MPC Member Shafik Speaks
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.