Support & Resistance Levels

This Blog provides futures market outlook for different commodities and futures trading markets, mostly stock index futures, as well as support and resistance levels for Crude Oil futures, Gold futures, Euro currency and others. At times the daily trading blog will include educational information about different aspects of commodity and futures trading.

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News on Stock Indices, Economic Reports & Levels 8.26.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

Stock Indices continue to make new highs but on VERY light volume….although I think the trend is up and the chart is more bullish than bearish, it is extremely hard for me to enter fresh longs at these prices because of two main reasons:

1. Very light volume

2. Extremely volatile Geo political arena

 

Even though I think there is a higher probability of a move higher, the chances for a BIG move is larger to the down side. So for now….I am staying on the sidelines ( swing trading wise).

 

As I sometimes like to do on Mondays, in order to have a perspective on the fundamentals behind the market, I share the weekly recap from our friends atwww.TradeTheNews.com

 

TradeTheNews.com Weekly Market Update: Feasting on Doves

– A slightly more hawkish tone was heard from the Fed this week, in the minutes of the July FOMC meeting and in speeches from leading officials. Fed Chair Yellen’s presentation at Jackson Hole was restrained and balanced, but the dovish Williams and moderate Lockhart both conceded that rate hikes would likely begin by mid-2015. The US yield curve flattened notably after all the talk. August Flash PMI manufacturing readings provided a view of the global economy at the midpoint of the third quarter: in the US, the Markit survey hit its highest level since April 2010, with big gains in all sub-indices; in Europe, the French data sank deeper into contraction while Germany flat-lined; in Asia, the China HSBC manufacturing PMI sank to a three-month low, while Japan’s rose to a five-month high. Violence in Iraq, Syria, and Ukraine kept markets jumpy, although it hardly prevented material gains in equities worldwide. For the week, the DJIA gained 2%, the S&P500 rose 1.7% and the Nasdaq added 1.6%.

– The FOMC minutes out on Wednesday indicated that the Fed appears to be shifting to a more balanced view of the economy from a more dovish position. The changes were of tone rather than anything material, although the minutes also showed a growing debate regarding the labor market. The minutes added a controversial new statement: “…a range of labor market indicators suggested that there remained significant underutilization of labor resources.” Both Bullard and Plosser have disagreed with the novel use of “significant” to describe labor resource underutilization. Yellen’s speech at Jackson Hole on Friday was balanced and pragmatic, noting both the positive developments in the jobs market and more negative trends, including slack in the mortgage market.

– The Ukraine situation seemed to be easing early in the week, as Kiev and Russian officials met and seemed to agree to protocols for allowing the Russian humanitarian mission into Ukraine. Meanwhile the Ukraine armed forces made even more gains against the rebels. By Friday, relations between Kiev and Moscow had soured again after the Russian side forced in the convoy without permission, prompting the Ukrainians to call it an invasion. In Iraq, the killing of a US journalist by ISIS hardened the US stance against the group, prompting very hawkish rhetoric out of administration figures, who suggested airstrikes against ISIS might be expanded into Syria.

– Shares of major US homebuilders gained steadily this week thanks to another month of strong gains in the August NAHB report and the July housing starts. The NAHB’s 55 reading was the third month of gains for the index, while July housing starts rose 8%, halting two straight months of declines. Some skeptics pointed out that multi-family units were the lion’s share of the gain, but single-family starts also saw solid improvement.

– Target’s earnings slid as its Canada operations continued to drag on results, and management cuts its FY view for the second time as traffic declined, even as the firm has ramped up promotional activity. TJX saw its earnings grow by single digits and the firm hiked its FY guidance. Teen retailer American Eagle topped very low expectations on a negative comp. L Brands saw modest growth and positive comps. Both Home Depot and Lowes saw very good quarterly results, and Home Depot said the housing market remains a modest tailwind for its business, and it observed an acceleration of big-ticket spending in the quarter.

– Bank of America reached a $16.7 billion agreement with DoJ to settle charges it misled investors into buying troubled MBS, confirming numerous reports from earlier in August. BoA will pay a $9.65 billion in cash and provide $7 billion of consumer relief to struggling homeowners and communities. The deal resolves nearly all of the legacy issues left over from the hastily-arranged crisis-era acquisitions of Countrywide and Merrill Lynch. The accord is expected to reduce Q3 earnings by about $5.3 billion, or about $0.43/share.

– Various long-running M&A dramas saw new developments this week. Valeant extended the expiration of its exchange offer to acquire Allergan to December 31, and there were reports that Allergan had approached Salix Pharmaceuticals or Jazz about a possible merger to fend off Valeant’s advances. CNBC threw cold water on the story, reporting that any potential deal could be months away, perhaps in December. Dollar General rolled out a $9.7 billion cash offer for Family Dollar, topping the $8.95 billion bid made in late July by Dollar Tree. Family Dollar rejected the proposal on the basis of antitrust regulatory considerations, although there were unconfirmed reports that it was open to concessions to resolve the compliance issues.

– EUR/USD hit one-year lows around 1.3220 this week as headwinds strengthened for the European economy. The Ukraine conflict continues to weigh on the single currency, and the opposite trajectories for EU and US monetary policy become even starker. Cable slumped to its lowest level since April thanks to soft July UK CPI inflation data and a significant decline in July PPI inflation numbers. GBP/USD tested below 1.6565 on Friday afternoon. The minutes for the BoE’s August meeting disclosed the first dissent on the committee since July 2011. The vote was 7-2, with Weale and Mccafferty dissenting.

– The surprise slowdown in China manufacturing in the first half of August prompted fresh speculation over a further policy stimulus from Beijing. The August HSBC flash manufacturing PMI turned lower for the first time since March, hitting a 3-month low of 50.3 and widely missing consensus of 51.5. Growth in new orders slowed and disinflationary trends resurfaced with a decrease in both input and output price components. Later on the Friday, China’s MIIT warned the economy is faced with strong downward pressure, while analysts with Barclays noted this PMI slump could result in as many as two interest rate cuts by the PBoC before the end of 2014.

– An underwhelming run of July economic data in Japan continued with a wider than expected trade deficit. Exports rose for the first time in three months, but soft yen boosted the import value of energy, contributing to the 25th consecutive month of negative trade. On Thursday, local press reported that Japan is looking to set aside as much as ¥1.0T in stimulus funds in the 2015 budget supporting small business, presumably to help soften any further blow to the economy if PM Abe decides to proceed with a second increase in consumption tax.

 

Source: http://www.tradethenews.com/?storyId=1590961

 

Continue reading “News on Stock Indices, Economic Reports & Levels 8.26.2014”

Trading Futures Spreads & Options, Reports & Levels 8.22.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

 

 

Most of the time I write about day trading, psychology of day trading, techniques etc. but I must say that day-trading is only one way of trading futures.

Over the years I have been exposed and used the following techniques / methods in trading:
buying options
selling options
using options spreads
swing trading using futures
position trading using futures and options
break out trading
and of course day-trading….

All methods can lose money, make money and in between. Some carry higher degree of risk than others, some have better probability of success but losses can be significant….The bottom line is each trader is different and may find a method that he/she feels more comfortable with. I actually wrote an article for SFO magazine a few years back about this subject, called “trading for your blood type” ( email me for a copy if you like).

One method I like for trading futures that can be applied both for day-trading but usually more common for swing/longer term trading is futures spreads. My colleague here at Cannon, Mark O’Brien wrote a good article about it last year which you can access at:

 

Continue reading “Trading Futures Spreads & Options, Reports & Levels 8.22.2014”

Different Methods to enter in Futures Trades, Reports & Levels 8.20.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

 

 

Few ways to enter a trade….

 

There are so many different aspects to trading.

From financial, emotional aspects to actual details of when to enter a trade, when to exit a trade and SO MUCH more in between…..

An important part of trading is trade entry. Assuming a trader knows why he/ she about to enter a trade the next step sounds simple right? simply buy or sell the contract you wish to trade….

Many times it is that simple, depending on the time frame you are trading you may simply buy @ market and get the market price at that time. Some traders try to make small profits where every tick counts hence they may use the “buy bid” or “sell ask” button in order to get in at the best market price at that time. Many times you may save a tick by doing so but other times you may find yourself chasing the bid or the ask…

 

Another way is for a trader to decide that yes she wants to enter the specific market but she would like to get in at a price that is better and will use a limit order. Example may be, trader got the signal she was looking for to sell the mini SP 500 futures. The September contract was at 1982.75. Trader decided that she is willing to take the risk of not getting into the trade but she will only sell if the market hits her limit price of 1983.75 for example. There are times that this patience will allow for a better entry price, hence better chances to meet target but there are times that trader will not get in and “miss a possible winning trade”

One more common way that some traders use is to enter on a stop. Most beginner traders will use stops for protection and not as much for trade entry. Traders with a bit more experience will at times use stops to enter a trade. Example may be that Joe decided to buy crude oil futures because he got his condition met ( crude in this hypothetical example is trading at 93.42), however Joe would like to see that price action follows the signal and break a minor level on the chart which he thinks serves as minor resistance at 93.49. In this case Joe will place a buy stop at 93.49 that if triggered will enter him into a long trade.

 

 

Again, there are so many more ins and outs to trading in general and to trade entry in specific and I hope this quick overview may opened your mind to different ways of entering a trade.

 

 

Continue reading “Different Methods to enter in Futures Trades, Reports & Levels 8.20.2014”

Levex Trading Algo, Mini S&P futures insight 8.20.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

 

Last week I wrote about symmetry in the SP 500 and shared some support levels between 1885-1895. As it turns, these levels held well and the market has since bounced and bounced pretty powerful. To some this may bit surprising as there are just too many Geo political events out there that should have injected some risk premium into the markets but as I learn every day, there is no point of arguing or fighting price action….

At this point the main question is what next?

The next key level to observe is 1985.75, the high made on September SP 500 futures back on July 24th 2014. If we can get a close above that level, we may see another strong leg up as projected in the  chart below where I have taken the magnitude of the move up from lows made April 14th to highs made July 24th and projected into the future where you can see some possible levels in case we can get a close above 1986.

This is in addition for 3 bullish signals I like to use which appear in the chart ( diamond, + sign and my topaz indicator)

 

That being said, keep in mind the Geo Political environment is pretty fragile….

825

 

If you are interested in having a free trial to some of the ALGOs and indicators I display in the chart above such as the “diamond” topaz” and others, please visit:

https://www.cannontrading.com/tools/intraday-futures-trading-signals 

 

Continue reading “Levex Trading Algo, Mini S&P futures insight 8.20.2014”

Market Recap, Trading Levels & Economic Reports 8.19.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

 

 

 

As I usually try to do on Mondays, a little on the fundamental side that affected trading in the past few days and should have an effect on trading this week. From our friends at www.TradeTheNews.com

 

TradeTheNews.com Weekly Market Update: The Guns of August

 

– It may be August but markets refuse to settle into a sleepy late summer trading pattern as even more geopolitical shocks and economic slowdown in Europe and Asia keep things very interesting. US stock averages were on track for their best gains in several weeks until heightened tensions in eastern Ukraine knocked them over on Friday and sent the 10-year UST yield to one-year lows around 2.322% and the German 10-year Bund below the 1% mark for the first time ever. In Brazil, the death of an opposition presidential candidate threw the campaign into turmoil, while there was finally some good news out of Iraq. Terrible European GDP data and worrying numbers in Asia left serious questions about the sustainability of the global economic recovery. Stocks continued to climb the wall of worry, and for the week the DJIA rose 0.7%, the S&P500 gained 1.2%, and the Nasdaq added 2.2%.- The situation in Ukraine kept markets off balance this week, as stories of escalation and de-escalation alternated in quick succession. Kiev was tightening the noose around separatist strongholds Donetsk and Lugansk as the Russian authorities dispatched a humanitarian aid convoy of 280 trucks to help civilians in eastern Ukraine, although Kiev and the Western powers reacted to the move as a thinly-veiled provocation. In a speech on Thursday, Russian President Putin said his government would do “all it can” to stop the conflict in Ukraine and asserted that Russia should not isolate itself from the outside world, inspiring a sense that finally de-escalation was at hand. But within 24-hours of Putin’s dovish speech, an incursion into Ukrainian territory by a column of purported Russian armored vehicles and a Ukraine army attack on the column briefly prompted fears that the crisis was headed for a more serious confrontation.

– Data out this week stoked fears of economic slowdown in Asia and Europe. In China, the July new yuan loans measure plunged by two-thirds m/m to the lowest level since January 2010, reviving talk about a Chinese economic hard landing. German GDP shrank 0.2% sequentially, putting the annualized figure at +0.8%, while French and Eurozone q/q GDP was flat. Japan initial second quarter GDP saw the economy contract by the biggest margin since the massive earthquake three years ago, although the drop was not as bad as expected. The numbers were widely expected, given the increase in sales tax, however the 5% contraction in private consumption was much bigger than the -3.7% expected. The one bright spot was the UK, where a modest expansion continued, with preliminary GDP +0.8% q/q and +3.2% y/y.

– The JOLTS report out this week showed that job openings surged to their highest level in over a decade in June. The data suggests there are about two unemployed job seekers for each available job in the economy. Fed Chair Yellen has referred to the JOLTS report as one of her key metrics for gauging labor demand in the US economy, and investors will be closely watching her remarks for any hawkish tones at her Jackson Hole speech next Friday which will focus on the labor market.

– The outbreak of the Ebola virus in West Africa continues to escalate, with about 2,000 confirmed cases reported from Guinea, Liberia, Nigeria, and Sierra Leone, and the mortality rate running over 50%. The WHO has warned that there is evidence that the number of reported cases and deaths vastly underestimate the magnitude of the outbreak.

– After massive pressure from a wide spectrum of domestic political players plus the US and Iran, Iraq PM Maliki stepped down this week after Iraqi President Masoum designated a new candidate to form a government. There had been fears Maliki would try to foment a coup and hold on to power, however the armed forces gave him no support, undercutting his position. Late in the week, leaders of the Sunni and Kurdish factions threw tentative support behind the new PM, Al-Abadi, raising hopes for a more inclusive and cohesive government. In the north, US airstrikes seemed to lift the siege of the Yazidi minority trapped on Mount Sinjar, but ISIS remains as strong as ever.

– Kinder Morgan announced plans this week to eliminate its master limited partnership structure and consolidate the four Kinder firms – Kinder Morgan Energy Partners, El Paso Pipeline Partners and Kinder Morgan Management – into one company. All four names rocketed higher after Kinder Morgan announced the $70 billion megadeal, which caught observers by surprise considering that Kinder was the first major energy firm to pioneer the MLP approach. The new Kinder Morgan entity will pay out a very generous dividend of $2/share in 2015, up 16% from this year.

– The July US advance retail sales numbers were flat, for the worst reading in the series in six months. The ex-autos figure was little better, at +0.1%. Analysts suggested that the weak July data is merely making up for unexpectedly strong numbers in May and June. Retail majors Macy’s and Walmart released very soft second-quarter results and trimmed forward guidance. JCPenny, Nordstrom, and Kohl’s reported decent quarterly numbers, with JCP and JWN both disclosing positive comps and higher guidance.

– Retail analyst firm ChannelAdvisor released estimated July SSS figures for Amazon and eBay. It said that Amazon July SSS were +40.4% versus June SSS of +34.4%, and estimated eBay July SSS +9.7% versus June SSS +12.3%. Shares of Amazon gained after the report while shares of eBay lost ground this week.

– In other earning news, Cisco reported flattish fourth-quarter performance and first-quarter guidance, which was received by markets without much enthusiasm. The company also launched another round of sizable job cuts, reducing the workforce to refocus on its strongest business segments. Deere mowed down its FY14 forecasts, and saw both earnings and revenue decline on a y/y basis. SeaWorld shares sank after a terrible quarter as gate receipts plummets, and the company responded to recent bad press by announcing it would improve the habitat areas for its signature orcas.

– The weak European GDP numbers and the continuing geopolitical tensions aided dollar strength. EUR/USD retested the nine-month lows seen last week, briefly dropping below 1.3340. Euro sell stops are said to be clustered below 1.3330. The BoE Quarterly Inflation Report was nowhere near as hawkish as expected, as it merely amended its spare capacity view to 1.00-1.25% from 1.00-1.50% prior and trimmed the wage growth forecast for 2014 and 2015. The BoE said there were no numerical thresholds for wage growth to trigger a rate hike. This contrasts sharply with Governor Carney’s earlier more hawkish tone. GBP/USD tested four-month lows in the aftermath of the report, around 1.660, and racked up its sixth straight week of losses.

 

Source: http://www.tradethenews.com/?storyId=1587834

 

Continue reading “Market Recap, Trading Levels & Economic Reports 8.19.2014”

Futures Trading Tips, Levels & Reports 8.15.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

 

Just like a basketball player doesn’t just show up for the game a minute before and starts playing, so does a trader need to prepare him/herself for trading.

 

You may not need to warm or shoot around but it definitely does not hurt to visualize successful trading, be rested, relaxed and more specifically, know the following:

 

 

↔What reports are coming out

↔Overview of longer time frames

↔Key support and resistance levels

↔Go over your equity run

↔Make sure your surroundings will enable you to trade

↔Fit trading into your schedule, life style not viceversa

↔E-mail us to be added to a daily newsletter which outlines reports and levels for each trading day

 

 

Continue reading “Futures Trading Tips, Levels & Reports 8.15.2014”

Gold Daily Continuation Chart – Levels & Reports 8.14.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

 

So I was doing some research and signal evaluator work on some candlesticks formation to go along with some of the conditions I like to use and figured might as well share some of the basic knowledge with my readers…

The following is taken from my CQG trading/chart terminal. If anyone is interested in a free trial, feel free to email me or visit our CQG section on our website.

So today, two formations I started exploring:

1. Engulfing Bearish

The Engulfing Bearish formation is, of course, a bearish formation and therefore its symbol (EG) will always appear at the top of the formation. It represents the opposite of the Engulfing Bullish formation. Three criteria establish an Engulfing Bearish formation:

*The market has to be in a clearly definable up-trend, even if the trend is short term.

*Of the 2 candlesticks in the formation, the second candle’s real body must engulf the first candle’s real body.

*The second real body of the formation should be “down” while the first real body should be “up.”

 

2. Engulfing Bullish

The Engulfing Bullish formation is, of course, a bullish formation and therefore its symbol (EG) will always appear at the bottom of the formation. It represents the opposite of the Engulfing Bearish formation. Three criteria establish an Engulfing Bullish formation:

*The market has to be in a clearly definable downtrend, even if the trend is short term.

*Of the 2 candlesticks in the formation, the second candle’s real body must engulf the first candle’s real body.

*The second real body of the formation should be “up” while the first real body should be “down.”

 

824

 

Above is a daily chart of Gold futures, going back to March 17th 2014 where one can see a good example of the ” Bearish EG”  formation and yet in the same exact chart you can see a failed “Bullish EG” formation on May 2nd 2014.

 

Will continue and explore a few other candlesticks formations over the next couple of weeks.

Continue reading “Gold Daily Continuation Chart – Levels & Reports 8.14.2014”

Mindful of Trading Size – Futures Reports & Levels 8.13.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

 

Today I want to touch briefly on a very important subject of “position size”.

Many traders spend hours and hours on trading signals, studies, reviewing the charts and patterns yet dedicate very little time to the subject of money management and one of it’s important aspects – position size.

If you have the ability, risk capital and desire to trade more than one contract, then position size is an important aspect.

How do you decide if you going to enter a trade with 2 or 10 contracts?
Are you the type of trader that gets in and out with ALL contracts or perhaps you enter and exit in layers?
Do you have certain set ups/ signals you feel stronger about and you enter with larger trade quantity? or do you enter all trades with a predefined number of contracts?
How do you calculate the number of contracts you will enter per trade? is it based on your account value? the market you trade?
does it changes with out regards to the account size?

As I mentioned in the beginning of this very short blog which meant to wake up that part in you as a trader, this subject is much deeper than a quick blog post but the questions/ thoughts above should encourage you to put more time and research into this matter.

To finish I will share just a few tips that I found useful and like to use:

1. Lower trade size when volatility increases as normally you will need to give your trade more room.
2. If you feel  uneasy when in a trade, more than normal, that means you are probably trading larger quantity than you should be.
3. Try to do some math based on your trading performance, worst draw-down, amount of maximum losing trades etc. to determine the amount of contracts per $ equity in the account. Example, “I will trade 1 contract of mini SP 500 per trade signal per $5,000 of equity in the account.”
4. Evaluate periodically as your account value fluctuates and as the market fluctuates.

 

Continue reading “Mindful of Trading Size – Futures Reports & Levels 8.13.2014”

Mini S&P Daily Continuation Chart – Levels & Reports 8.12.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

Nice bounce on stock index futures after the lows we made Thursday night.

So far the market has respect to the symmetry I am sharing below and the current bounce should test 1951 if continues OR test 1913 if selling pressure resumes. These are the levels I will be watching as in between we have enough room for intraday fluctuations. Volume today was light and action took place mostly in the first few hours. August is know to be the “month of vacations” over at Europe.
Mini SP 500 daily chart for your review below:

 

823

 

In between the Geo political focus will be on the situation in Iraq and the concerning issue of the Islamic group known as ISIS.

Continue reading “Mini S&P Daily Continuation Chart – Levels & Reports 8.12.2014”

SP 500 Futures Testing Major Support Zone – Levels & Reports for 8.8.2014

Posted on by Ilan

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

SP 500 made new lows and about to test a series of support levels as one can see in the daily chart below:

We have few levels of support between 1885 and 1896.50 in case we break again below the psychological 1900 mark.

I mentioned a couple of days ago support of 1795 by mistake and was asked by few of the readers. That was a typo the support I meant to write is 1895.

Looks like we will visit that level and zone very soon, maybe as early as night session. My best guess is for an initial bounce of that level. Just a guess. Either way I will look to see what kind of reaction we get if and when we get down there.

A strong bounce may signal some more upside, however a break below 1895-1885 level may actually make my 1795 typo into a reality… 822

Continue reading “SP 500 Futures Testing Major Support Zone – Levels & Reports for 8.8.2014”

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.