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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Futures Brokers

Posted on by Ilan

Futures brokers, also known as broker futures or broker future professionals, play a vital role in the futures trading industry. They act as intermediaries between traders and the futures exchanges, providing crucial services to facilitate the buying and selling of contracts. The responsibilities of futures brokers are vast and multi-faceted, encompassing both professional and personal aspects that are essential for successful trading. This article examines the responsibilities of futures brokers, the importance of selecting a reputable and ethical broker, and the ways they can assist in loss mitigation. By understanding these aspects, a full-time futures trader can make more informed decisions when choosing and working with a futures broker.

Responsibilities of Futures Brokers

Futures brokers have a range of responsibilities, from executing trades on behalf of clients to offering expert advice. A responsible broker futures professional ensures that clients receive accurate information, fair pricing, and a transparent trading experience. Here are some of the main responsibilities of a future broker:

Executing Trades Promptly and Efficiently – One of the primary responsibilities of a futures broker is to execute trades efficiently. In the fast-paced world of futures trading, where price movements can be rapid, any delay in trade execution could lead to significant losses. A reliable broker futures trading professional must understand this urgency and execute orders promptly. This duty requires technical skills and familiarity with the trading platform, as well as the ability to manage multiple orders from various clients without errors.

Providing Market Insights and Research – A good futures broker goes beyond basic execution to provide clients with valuable insights into the markets. Many futures brokers offer research reports, analyses, and trading recommendations to help clients make informed decisions. By providing access to comprehensive market research, brokers assist traders in navigating market volatility and identifying trading opportunities. This guidance is particularly important for new traders, who may lack experience in analyzing complex market data.

Ensuring Compliance and Ethical Trading Practices – Futures brokers are also responsible for upholding ethical standards and complying with regulations. This responsibility is essential for maintaining trust within the industry. Broker futures professionals are often regulated by authorities such as the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). They must follow strict guidelines regarding trading practices, client funds management, and transparency. By ensuring compliance, futures brokers protect their clients from fraud and mitigate the risk of unethical practices.

Offering Risk Management Support – Risk management is an integral part of futures trading, and a responsible broker future professional should provide risk management support to clients. This support may include offering advice on stop-loss orders, margin requirements, and other tools to control exposure to adverse price movements. Since futures trading is inherently risky, the guidance provided by a futures broker can help clients limit potential losses and protect their capital.

Providing Educational Resources – In addition to executing trades, a reliable futures broker offers educational resources to enhance the trading skills of clients. These resources can include webinars, tutorials, articles, and one-on-one coaching sessions. By educating clients on futures trading strategies and market trends, brokers empower them to make informed trading decisions and develop a deeper understanding of the markets.

Importance of a Reputable and Reliable Futures Broker

Having a reputable, reliable, and ethical futures broker is essential for a full-time futures trader for several reasons. A good broker not only facilitates trading but also contributes to a trader’s overall success and financial security. Here’s why choosing the right future broker is crucial:

Trust and Transparency – A reputable broker futures professional operates with transparency, ensuring that clients fully understand the costs and terms associated with their trades. Trustworthy brokers provide clear information on fees, commissions, and trading conditions. For a full-time trader, knowing the costs and having confidence in the broker’s integrity is critical to maintaining a consistent trading strategy. Brokers that disclose hidden fees or execute trades in ways that benefit themselves over the client are damaging to the trader’s success and can lead to unexpected costs.

Reliability and Responsiveness – Reliability is one of the most sought-after qualities in futures brokers. A reliable broker future professional is available when the market is open, responds quickly to client inquiries, and addresses any technical issues promptly. Full-time futures traders depend on these brokers for seamless trade execution, especially during high-volatility periods when the slightest delay could result in significant losses.

Ethical Conduct and Client Interests – Ethical futures brokers prioritize their clients’ best interests and avoid practices that could compromise their clients’ financial stability. Ethical conduct includes refraining from high-pressure sales tactics or encouraging excessive trading for the purpose of generating commissions. A broker futures trading professional with a strong ethical foundation aims to foster a long-term relationship with clients, built on trust and mutual respect.

Safety of Funds – A reputable broker futures professional ensures that client funds are secure. They adhere to strict regulatory standards, which often include keeping client funds in segregated accounts. Segregation of funds means that a trader’s funds are kept separate from the broker’s own operational accounts, providing a layer of security against broker insolvency. This protection is particularly valuable for full-time futures traders, whose livelihood depends on the accessibility and safety of their trading capital.

Access to Resources and Expertise – A good future trading broker provides access to proprietary research, advanced trading tools, and knowledgeable experts. These resources support full-time traders in making sound decisions, adjusting strategies, and staying updated on market developments. Traders who work with experienced and resourceful brokers gain a competitive edge, as they benefit from specialized insights and professional advice tailored to their trading style.

How Futures Brokers Help Mitigate Losses?

While futures trading inherently involves risk, futures brokers play an important role in helping clients mitigate potential losses. Here are some strategies through which a broker futures professional can assist clients in managing risk:

Implementing Stop-Loss Orders – A common risk management tool offered by futures brokers is the stop-loss order, which allows traders to set a predetermined price at which their position will be automatically closed if the market moves against them. For example, a trader might buy oil futures at $50 per barrel and set a stop-loss order at $48. If the market price falls to $48, the stop-loss order would automatically sell the position, limiting the trader’s loss to $2 per barrel. By advising clients on appropriate stop-loss levels, a future broker helps protect them from unexpected price fluctuations.

Advising on Leverage and Margin – Leverage allows traders to control large positions with a relatively small amount of capital. While leverage can amplify profits, it also increases potential losses. A responsible future trading broker educates clients on the risks of using excessive leverage and guides them on appropriate margin levels. For instance, if a trader has a $10,000 account, a broker futures trading professional may recommend not to use more than 5x leverage, thereby limiting the exposure to risk. This guidance helps traders avoid the common pitfall of overleveraging, which can result in margin calls and significant losses.

Diversification Strategies – Future brokers can advise clients on diversification strategies to reduce risk. By diversifying across multiple asset classes (e.g., commodities, financial futures, and indices), traders can protect their portfolios from volatility in any one market. A broker future expert might suggest that a trader balance their portfolio with both equity futures and commodity futures, thus spreading the risk. For example, if oil prices plummet, gains in other assets, such as equity futures, might offset losses in oil.

Providing Timely Market Updates – Future trading brokers often provide real-time market data and updates, which are crucial for making informed decisions. Suppose a broker futures trading expert notices a significant economic event that could impact the market. In that case, they may alert clients to adjust their positions accordingly. For example, if inflation data is about to be released, the broker might advise caution in trading currency futures due to anticipated volatility. By staying informed of these developments, traders can preemptively reduce exposure to unfavorable price movements.

Risk-Reducing Recommendations – A proactive broker future professional offers specific risk-reducing recommendations based on market conditions. For instance, if the market is highly volatile, a broker might recommend reducing position sizes or temporarily halting trading. Hypothetically, if a trader is holding a position in agricultural futures and a natural disaster threatens the supply chain, the broker could suggest closing the position early to avoid substantial losses.

Hypothetical Examples of How Futures Brokers Can Assist in Mitigating Losses

To better illustrate how futures brokers can assist clients, consider the following hypothetical scenarios:

  • Commodity Market Volatility: A trader holds a long position in gold futures, expecting prices to rise due to economic uncertainty. However, the broker notices an unexpected policy change that could negatively impact gold prices. The broker advises the trader to set a tighter stop-loss order or reduce their position. When prices indeed drop, the stop-loss order limits the trader’s loss, preserving a portion of their capital.
  • Leverage Control in Forex Futures: A trader with a $20,000 account plans to enter a forex futures trade with 10x leverage. Recognizing the risks, the futures broker suggests a more conservative approach with 5x leverage. When the market moves against the trader, the smaller leverage prevents a significant portion of their capital from being wiped out, highlighting the importance of cautious margin management.
  • Agricultural Futures and Weather Forecasts: A futures broker monitors weather patterns and advises clients trading agricultural futures on potential supply chain disruptions. The broker might suggest hedging strategies or diversifying into non-agricultural assets. When adverse weather impacts the market, clients following the broker’s guidance experience mitigated losses.

Future brokers, or broker futures professionals, serve as indispensable allies for full-time futures traders. Their responsibilities go beyond executing trades to include providing market insights, ensuring compliance, offering risk management support, and educating clients. Choosing a reputable, reliable, and ethical futures broker is crucial, as they contribute to a trader’s long-term success and protect against unethical practices.

A skilled futures broker also aids in loss mitigation through various strategies, including stop-loss orders, leverage control, diversification, and timely market updates. By working with a reputable broker futures trading expert, traders can navigate the complexities of the futures market with greater confidence and minimize potential losses. As these examples and explanations show, a responsible future broker does more than just facilitate trades—they become a valuable partner in a trader’s journey toward achieving consistent profitability and financial stability.

For more information, click here.

Ready to start trading futures? Call us at 1(800)454-9572 – Int’l (310)859-9572 (International), or email info@cannontrading.com to speak with one of our experienced, Series-3 licensed futures brokers and begin your futures trading journey with Cannon Trading Company today.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if 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.

Important: Trading commodity futures and options involves a substantial risk of loss. The recommendations contained in this article are opinions only and do not guarantee any profits. This article is for educational purposes. Past performances are not necessarily indicative of future results.

This article has been generated with the help of AI Technology and modified for accuracy and compliance.

Follow us on all socials: @cannontrading

 

Futures Brokers USA

Posted on by Ilan

Navigating Market Volatility in 2025

As financial markets continue to experience unprecedented levels of volatility, futures brokers in the USA play an increasingly critical role in helping traders navigate the complexities of futures trading. Heading into 2025, the unpredictability of global economic conditions, geopolitical events, and shifting monetary policies underscore the need for strategic intervention by futures brokers. Traders face unique challenges and opportunities in these conditions, making the guidance of experienced professionals more valuable than ever.

In this article, we will examine how futures brokers in the USA can assist their clients in managing volatility, offering ten actionable techniques supported by real-life trades, case studies, and hypotheticals. We will also explore why Cannon Trading Company, a leading futures broker with a stellar reputation, is an exceptional choice for traders seeking stability in turbulent times.

  1. Hedging with Futures Contracts

    One of the primary ways futures brokers help clients manage volatility is through hedging. By taking opposing positions in the futures market, traders can protect themselves against adverse price movements in underlying assets. For example:

    • Case Study: A soybean farmer fears a drop in prices before the next harvest. By working with a futures broker, the farmer sells soybean futures contracts to lock in current prices. When the market later experiences a downturn due to surplus production, the loss in the physical market is offset by gains in the futures trading position.

    Through personalized hedging strategies, futures brokers in the USA provide peace of mind to clients worried about market swings.

  2. Utilizing Options on Futures

    Another effective technique is trading options on futures contracts. These instruments provide traders the right, but not the obligation, to buy or sell futures at a specific price. For instance:

    • Hypothetical Example: An energy company anticipates rising oil prices but wants limited risk exposure. A futures broker advises purchasing call options on crude oil futures. If oil prices soar, the call options generate profit. If prices fall, the company’s loss is capped at the premium paid.

    Options on futures trading offer traders a way to benefit from volatility while managing risk.

  3. Spreading Strategies

    Spread trading, which involves taking offsetting positions in related contracts, is another volatility management tool. Examples include calendar spreads (trading futures with different expiration dates) and intercommodity spreads.

    • Real-Life Example: A trader anticipates narrowing spreads between corn and wheat prices. A futures broker helps the trader go long on corn futures while shorting wheat futures. As the price gap tightens, the trader realizes gains irrespective of overall market direction.

    This strategy reduces exposure to absolute price volatility and focuses on relative price movements.

  4. Leveraging Stop-Loss Orders

    Stop-loss orders are a critical tool for managing downside risk in volatile markets. A futures broker can work with clients to establish stop-loss levels tailored to their risk tolerance.

    • Case Study: A gold trader enters a long position expecting prices to rise due to inflation concerns. The futures broker sets a stop-loss order at a 5% decline. When prices unexpectedly drop due to a stronger dollar, the order is triggered, limiting losses.

    Stop-loss orders ensure disciplined trading futures even in chaotic market conditions.

  5. Using Technical Analysis

    Futures brokers often provide clients with advanced charting tools and technical analysis to identify key market levels. These insights help traders execute informed decisions.

    • Example: A professional trader collaborates with a futures broker to analyze historical price patterns in the S&P 500 futures market. Using Fibonacci retracements and moving averages, they pinpoint entry and exit points during a volatile earnings season.

    By leveraging technical analysis, futures brokers in the USA empower clients to act decisively.

  6. Diversifying Across Asset Classes

    Diversification is a time-tested approach to mitigating risk. Futures brokers can guide traders in creating portfolios with exposure to various asset classes, such as commodities, equities, and currencies.

    • Hypothetical Example: A trader overly reliant on equity index futures is advised by their futures broker to diversify into agricultural commodities. When equity markets experience heightened volatility, gains in agricultural futures trading help stabilize the portfolio.

    This strategy minimizes reliance on a single market segment.

  7. Providing Real-Time Market Insights

    Modern futures brokers in the USA offer access to real-time data and expert commentary to help clients anticipate and respond to market moves.

    • Example: During the 2022 energy crisis, Cannon Trading provided clients with timely analysis of natural gas futures. Traders who acted on this information navigated extreme price fluctuations more effectively than those without broker insights.

    Access to accurate, up-to-date information is a cornerstone of successful trading futures.

  8. Structured Trade Execution

    Effective execution can make or break a trade during periods of high volatility. Experienced futures brokers employ smart order routing and execution algorithms to reduce slippage.

    • Case Study: A high-frequency trader enters the E-mini S&P 500 futures market during a Fed announcement. With the help of a futures broker’s advanced platform, orders are executed swiftly, locking in favorable prices before the market reacts.

    Top-tier execution is an often-underestimated advantage provided by reputable futures brokers in the USA.

  9. Educating Clients Through Webinars and Research

    Education is vital for empowering traders to manage risk. Many futures brokers, including Cannon Trading, provide webinars, market reports, and one-on-one consultations.

    • Real-Life Example: In 2023, Cannon Trading hosted a webinar on “Trading Futures During High Volatility.” Participants learned strategies to navigate unpredictable interest rate announcements, which they later applied successfully in live trades.

    Educational resources ensure traders are equipped to make informed decisions in volatile markets.

  10. Offering Access to Diverse Trading Platforms

    In a fast-paced environment, the right trading platform can be the difference between success and failure. Leading futures brokers in the USA provide clients with access to state-of-the-art platforms tailored to their needs.

    • Example: A swing trader uses a multi-asset platform from Cannon Trading to monitor futures, options, and spot markets simultaneously. This integrated view helps them identify arbitrage opportunities during a market selloff.

    The ability to trade seamlessly across markets enhances resilience in volatile times.

Why Choose Cannon Trading Company for Managing Volatility?

Cannon Trading Company is a standout in the crowded field of futures brokers in the USA, offering unmatched experience, client support, and technological resources. Here’s why Cannon is an excellent choice for traders concerned about market volatility:

  • Decades of Experience: With over 35 years in the industry, Cannon Trading has weathered countless market cycles, making it a trusted partner in uncertain times.
  • Top Regulatory Standards: Cannon Trading operates under strict compliance with U.S. regulatory bodies, providing traders with a secure and transparent trading environment.
  • Highly Rated Service: The company boasts dozens of 5 out of 5-star ratings on TrustPilot, reflecting exceptional customer satisfaction.
  • Diverse Platforms: Whether you are a beginner or a seasoned trader, Cannon Trading offers access to top-tier platforms like CQG, TradeStation, and Sierra Chart.
  • Tailored Support: Cannon Trading’s personalized service helps traders develop customized strategies to navigate volatility effectively.

For traders seeking a reliable partner in futures trading, Cannon Trading delivers expertise, technology, and trustworthiness.

As we approach 2025, market volatility is likely to remain a defining feature of financial markets. Futures brokers in the USA play an indispensable role in helping traders navigate these challenges through hedging, diversification, advanced execution, and education. From stop-loss orders to real-time insights, the techniques outlined above demonstrate the breadth of strategies available to clients.

With a proven track record, comprehensive platform offerings, and a commitment to client success, Cannon Trading Company is uniquely positioned to assist traders in managing risk and capitalizing on opportunity in the world of futures trading. By leveraging the resources and expertise of leading futures brokers, traders can approach market volatility with confidence and resilience.

For more information, click here.

Ready to start trading futures? Call us at 1(800)454-9572 – Int’l (310)859-9572 (International), or email info@cannontrading.com to speak with one of our experienced, Series-3 licensed futures brokers and begin your futures trading journey with Cannon Trading Company today.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if 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.

Important: Trading commodity futures and options involves a substantial risk of loss. The recommendations contained in this article are opinions only and do not guarantee any profits. This article is for educational purposes. Past performances are not necessarily indicative of future results.

This article has been generated with the help of AI Technology and modified for accuracy and compliance.

Follow us on all socials: @cannontrading

Movers and Shakers: CPI on Deck, OPEC Leadership, and Commodity Surges

Posted on by Ilan

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Movers and shakers!

By John Thorpe, Senior Broker

 

Equities prices were mostly flat as traders are anticipating tomorrow mornings CPI release at 7:30 CT.

Iran’s oil minister has been elected as OPEC President for 2025, Crude prices are holding steady in the 68.25 / bbl area

…as Gold surged again in the face of some dollar weakness.

Supply concerns are affecting Cocoa prices as the mid year West African cocoa crop outlook has deteriorated (April) as dry conditions will hurt the early development of the crop. ICE-monitored cocoa inventories held in US ports have been trending lower for the past 1-1/2 years and fell to a 20-year low Monday of 1,487,243 bags. Also, 23/24 stocks to Grindings report reflect a 46-low. March Cocoa was up 476 or $4760.00 per contract to close at 10557 basis the march contract.

Monthly WASDE was released today, here is a quick synopsis: World Corn carryout was much smaller than previously reported. 296.44 mmt vs 304.14 mmt providing continued bullish sentiment from the August lows. March 25 Corn surged 7 and ¼ cents.

 

 

 

Watch Tomorrow’s Movers and Shakers:

 

 

CPI Consumer Price Index @ 7:30 am CDT.

 

Consensus Outlook

How we wish the inflation numbers were improving! Forecasters expect headline CPI to show increases of 0.3 percent on the month and 2.7 percent on the year for November versus 0.2 percent and 2.6 percent in October. The core is expected at a sticky 0.3 percent and 3.3 percent on the year, the same as in October and September. With readings like this, the expectation for the December Fed policy meeting remains split between a 25 bp cut and no action, although the latest soft-ish jobs report underpins rising expectations for 25.

 

 

Earnings: Adobe will be the feature, otherwise very quiet, only 19 firms reporting

 

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Daily Levels for December 11, 2024

 

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Economic Reports

provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
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.

OPEC Meeting Tomorrow: Crude Oil Insights and Trading Strategies

Posted on by Ilan

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Join our Private Facebook group

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Listen to our podcast: Subscribe on Apple, Spotify, Amazon, or wherever you listen to podcasts!
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OPEC meeting tomorrow.

Crude Oil analysis from our friends at Artac Advisory.
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  • Get qualified support and resistance levels for precise risk management on different commodity markets.
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  • Get technical forecasts to keep you on the right side of a specific commodity trading market.
  • One on One “Daily Digest” with a dedicated series 3 professional.
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Ask a Broker: What is Day Trading Futures, Part 2?
Ask a Broker: What is Day Trading Futures, Pt 2?

 

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Daily Levels for December 9, 2024

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Economic Reports

provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
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.

DJIA Futures

Posted on by Ilan

Day Trading Tips and Pitfalls

Day trading DJIA futures offers an exciting opportunity to participate in one of the world’s most liquid and influential financial markets. DJIA futures, or Dow Jones futures, are derivatives that allow traders to speculate on the movement of the Dow Jones Industrial Average (DJIA). This article delves into the nuances of day trading DJIA futures, provides essential tips, lists key facts about the contracts, and highlights the services of Cannon Trading Company as a reliable futures trading partner.

What Are DJIA Futures?

DJIA futures contracts are standardized agreements to buy or sell the Dow Jones Industrial Average at a predetermined price on a specific future date. These contracts are traded on the Chicago Mercantile Exchange (CME) and offer high liquidity, making them a popular choice for traders looking to capitalize on short-term price movements.

Tips for Day Trading DJIA Futures

  1. Understand Market Dynamics
    • Tip: Familiarize yourself with how DJIA futures are influenced by macroeconomic data, Federal Reserve announcements, and geopolitical events. For example, a positive nonfarm payroll report could lead to a spike in Dow Jones futures prices due to increased investor confidence.
  2. Use Technical Analysis
    • Tip: Employ tools such as moving averages, Fibonacci retracements, and Bollinger Bands to identify potential entry and exit points. For instance, if the DJIA futures contract breaks above a key resistance level, it could signal a bullish trend.
  3. Set Realistic Goals
    • Tip: Avoid chasing large profits and focus on consistent gains. For example, a trader targeting 20-30 points per trade on DJIA futures may have better success than someone aiming for hundreds of points in a single session.
  4. Manage Risk Effectively
    • Tip: Always use stop-loss orders to protect against significant losses. A stop-loss placed 10 points below your entry price can limit potential downside while allowing room for market fluctuations.
  5. Monitor Market Opening and Closing Times
    • Tip: The first and last 30 minutes of trading often see the most volatility. Savvy traders capitalize on this by placing trades during these windows while remaining cautious of sudden price swings.
  6. Avoid Overleveraging
    • Tip: While trading futures offers leverage, excessive risk can lead to large losses. For example, trading one DJIA futures contract with a $10,000 account and proper risk management is more sustainable than overcommitting your capital.
  7. Stay Updated with News
    • Tip: Major news events can lead to sudden spikes or drops in Dow Jones futures. For example, during a Federal Reserve announcement, DJIA futures might experience a 100-point swing in minutes.
  8. Practice Discipline
    • Tip: Stick to your trading plan and avoid emotional decisions. For instance, if your strategy dictates exiting a trade after 20 points, resist the urge to hold out for more.
  9. Utilize a Reliable Trading Platform
    • Tip: A robust platform ensures accurate execution and access to analytical tools. This is where companies like Cannon Trading shine, offering a wide selection of trading platforms tailored to traders’ needs.
  10. Learn from Experience
    • Tip: Keep a trading journal to document successes and failures. Reviewing trades helps refine strategies, such as identifying patterns in winning and losing trades on DJIA futures.

Key Facts About DJIA Futures Contracts

  1. Standardized Contracts
    • Example: The E-mini Dow futures (YM) contract represents $5 per index point, making it accessible for traders with smaller accounts.
  2. High Liquidity
    • Case Study: A day trader executes multiple trades during a Federal Reserve announcement, benefiting from tight bid-ask spreads due to high liquidity in the DJIA futures market.
  3. Leverage Opportunities
    • Hypothetical Scenario: A trader with $5,000 controls a DJIA futures contract worth $160,000, amplifying both potential gains and risks.
  4. Margin Requirements
    • Example: Initial margin for E-mini Dow futures might be $1,500, allowing traders to enter the market with a fraction of the contract’s value.
  5. Market Hours
    • Real-Life Trade: A trader monitors overnight market movements before placing a trade at market open, capitalizing on trends in Dow Jones futures.
  6. Tick Size
    • Example: Each tick (minimum price movement) in the E-mini Dow is $5, making it critical for traders to calculate risk precisely.
  7. Settlement
    • Fact: DJIA futures are cash-settled, meaning no physical delivery of underlying assets occurs at expiration.
  8. Correlation with the Dow Jones Index
    • Case Study: A sharp drop in the Dow Jones index during a market correction leads to a corresponding decline in Dow futures, highlighting the close relationship.
  9. Volatility
    • Hypothetical Scenario: During an unexpected interest rate hike, DJIA futures drop by 200 points within minutes, demonstrating the impact of volatility.
  10.  Suitability for Day Traders
    • Fact: High liquidity, low tick sizes, and tight spreads make DJIA futures ideal for day trading.

Common Pitfalls in Day Trading DJIA Futures

  1. Ignoring Risk Management
    • Many traders fail to set stop-loss orders, leading to outsized losses. For instance, a 50-point drop in DJIA futures can translate to a $250 loss per contract if unmanaged.
  2. Trading Without a Plan
    • Entering trades impulsively often results in losses. For example, chasing a price spike without analyzing support and resistance levels can lead to poor outcomes.
  3. Overtrading
    • Excessive trading incurs higher transaction costs and increases the likelihood of errors.
  4. Misusing Leverage
    • Overleveraging magnifies losses. A trader using 10x leverage on a $10,000 account risks losing the entire balance in a single bad trade.
  5. Falling for News Hype
    • Acting on unverified news can lead to poor decisions. For instance, false rumors about corporate earnings might trigger unnecessary trades.

Why Choose Cannon Trading Company?

Cannon Trading Company stands out in the trading futures industry for several reasons:

  1. Wide Selection of Platforms
    • Traders can choose from platforms like CQG, Rithmic, and others to match their trading style. These platforms are optimized for speed, reliability, and advanced analytics, essential for success in DJIA futures
  2. TrustPilot Ratings
    • With dozens of 5-star reviews, Cannon Trading has established itself as a trusted partner in the Dow futures
  3. Regulatory Reputation
    • Cannon Trading complies with stringent industry standards, ensuring transparency and reliability.
  4. Decades of Experience
    • Established in 1988, Cannon Trading boasts deep market expertise, helping traders navigate the complexities of Dow Jones futures.

Examples of Real-Life and Hypothetical Trades

Real-Life Trade Example

A trader monitors the DJIA futures market during a Federal Reserve announcement. Spotting a bullish trend after dovish comments, they enter a long position at 34,500 and exit at 34,520, gaining $100 per contract. Important: Trading commodity futures and options involves a substantial risk of loss. The recommendations contained in this article are opinions only and do not guarantee any profits. This article is for educational purposes. Past performances are not necessarily indicative of future results.

Hypothetical Trade Scenario

A day trader notices a double-bottom pattern on the 15-minute chart. They enter a long position at 34,300 with a stop-loss at 34,280 and a target at 34,350. The trade hits the target, netting a $250 profit per contract.

Day trading DJIA futures requires a blend of market knowledge, technical skill, and disciplined execution. Understanding the contract specifications, mastering risk management, and choosing a reliable trading partner like Cannon Trading Company are critical for success. With a robust platform selection, decades of expertise, and exceptional customer reviews, Cannon Trading offers the tools and support traders need to thrive in the competitive Dow futures market.

For more information, click here.

Ready to start trading futures? Call us at 1(800)454-9572 – Int’l (310)859-9572 (International), or email info@cannontrading.com to speak with one of our experienced, Series-3 licensed futures brokers and begin your futures trading journey with Cannon Trading Company today.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if 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.

Important: Trading commodity futures and options involves a substantial risk of loss. The recommendations contained in this article are opinions only and do not guarantee any profits. This article is for educational purposes. Past performances are not necessarily indicative of future results.

This article has been generated with the help of AI Technology and modified for accuracy and compliance.

Follow us on all socials: @cannontrading

Weekly Newsletter: The Week Ahead in Futures Trading, Auto Trading System, 10 Year Outlook & More!

Posted on by Ilan
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Cannon Futures Weekly Letter Issue # 1220

In this issue:

  • Important Notices – Earnings, CPI, WASDE, The Week Ahead.
  • Futures 102 – Crude Oil Outlook + Premium Daily Research
  • Hot Market of the Week – March 10 Year Notes
  • Broker’s Trading System of the Week – Mid Cap Swing System
  • Trading Levels for Next Week
  • Trading Reports for Next Week

 

Important Notices – Next Week Highlights:

 

The Week Ahead

By John Thorpe, Senior Broker

 

294 corporate earnings reports and a number of meaningful Economic data releases including Consumer Price Index (CPI) and Producer Price Index (PPI). It’s also the beginning of the Fed Blackout period and the Monthly USDA World Agriculture Supply and Demand (WASDE)report will also be next week!

Prominent Earnings Next Week:

  • Mon. Oracle , post close
  • Tue. Gamestop
  • Wed. Adobe
  • Thu. Broadcom, Costco
  • Fri. quiet

 

 

FED SPEECHES:

  • This is the Fed Black out period in advance of the Dec 18th, Yearend, Fed Meeting. According to the CME FedWatch Tool as of today, Dec 6th , There is an 87.1 % likelihood of a .25 basis cut from the current Fed Funds rate of 4.50-4.75 range, during the upcoming meeting, Therefore a 12.9 % probability of remaining steady with no change.

 

Economic Data week:

  • Mon. Wholesale Inventories, Consumer Inflation Index
  • Tues. NFIB Business Optimism Index , Redbook, WASDE
  • Wed. CPI
  • Thur. PPI, Jobless claims
  • Fri. Export Prices

 

Futures 101: Ask a Broker!!

Projecting Targets

Projecting Targets

 

Futures 102: Crude Oil In Depth Analysis

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  • Get qualified support and resistance levels for precise risk management on different commodity markets.
  • Get pivot points that highlight shifts in the futures market momentum.
  • Get technical forecasts to keep you on the right side of a specific commodity trading market.
  • One on One “Daily Digest” with a dedicated series 3 professional.

 

 

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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.

FREE TRIAL AVAILABLE

March 10 Year Treasury Notes

The rally in the March 10 Year completed its first upside PriceCount objective last month and consolidated its trade. Now, the chart has resumed its rally where the second count projects a possible run to the 111^31 area.

 

PriceCounts – Not about where we’ve been , but where we might be going next!

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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.

   Broker’s Trading System of the Week

With algorithmic trading systems becoming more prevalent in portfolio diversification, the following system has been selected as the broker’s choice for this month.

MidCap Yellow

 

PRODUCT

Mid Cap SP400

 

SYSTEM TYPE

Swing Trading

 

Recommended Cannon Trading Starting Capital

$50,000

 

COST

USD 110 / monthly

 

Get Started

Learn More

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The performance shown above is hypothetical in that the chart represents 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 back adjusted data. Please read full disclaimer HERE.
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Daily Levels for December 9th, 2024

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Weekly Levels for the week of

December 9th, 2024

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Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week:
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Improve Your Trading Skills

Get access to proprietary indicators and trading methods, consult with an experienced broker at 1-800-454-9572.

Explore trading methods. Register Here

* 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.

NFP Tomorrow: Key Insights and Market Impacts

Posted on by Ilan

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NFP tomorrow!

Non Farm Payrolls, market moving event!

Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity;

This is vital economic data released shortly after the month ends. The combination of importance and earliness makes for hefty market impacts;

Please see an SP500 outlook from our friends at Artac Advisory and feel free to sign up for a FREE, NO OBLIGATION trial of their premium service and research!

 
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Daily Levels for December 6, 2024

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Economic Reports
provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
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.

Movers and Shakers: Political Turmoil, Market Highs, and Economic Indicators

Posted on by Ilan

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Movers and shakers! 

By Mark O’Brien, Senior Broker

 

General: 

 

Leaders of two staunch U.S. allies, South Korea and France, are facing their ouster today.  French Prime Minister Michel Barnier faces a pivotal no-confidence vote that risks toppling his government and derailing France’s efforts to get its public finances back on track.  This is the result of a monthslong battle over France’s 2025 budget. Mr. Barnier’s proposed budget demands 60 billion euros – equivalent to $63.1 billion – in spending cuts and tax increases to narrow France’s deficit, which is projected to reach more than 6% of gross domestic product this year, double the European Union’s limit.

 

One day after declaring martial law – a type of military control that had been avoided in South Korea for more than four decades, its president, Yoon Suk Yeol, is now facing the prospect of impeachment, creating more political instability for this close Asian U.S. ally.  Mr. Yoon’s move to declare martial law late Tuesday night stunned South Korea’s political establishment and caught U.S. officials by surprise. Within about six hours, Mr. Yoon reversed course after lawmakers voted 190-0 against the measure, a group that included nearly 20 lawmakers from Yoon’s own party.

 

More General: 

 

It’s that time of the month again: we’re a couple of days from when the Labor Dept. releases its monthly Non-farm payrolls report.  It’s widely considered to be one of the most important and influential measures of the U.S. economy.  The report is released at 7:30 A.M., Central Time on the first Friday of the month.

 

Stock Indexes: 

 

Today, the Dec. E-mini S&P 500, the E-mini Nasdaq and the E-mini Dow Jones futures contracts traded to new all-time highs, with the E-mini S&P 500 piercing 6100, the Dow over 45,000 and the Nasdaq above 21,500.

 

Crypto: 

 

December Bitcoin futures retained its lofty valuation, moving up ±$3,000 / ±$3%, above 99,000 and within striking distance of its second highest all-time close after closing at 100,815 on November 22.

 

Soy Complex: 

 

After dropping nearly 8 cents today, January soybeans, the futures’ front month for another few weeks, closed at $9.83¾ per bushel and remains mired within striking distance of its intraday life-of-contract low at 973½ per bushel posted back on August 14th.

 
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Daily Levels for December 5, 2024

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Economic Reports
provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
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.

Standard and Poor’s 500 Futures

Posted on by Ilan

Standard and Poor’s 500 futures, commonly known as S&P 500 futures or SP500 index futures, are among the most widely traded financial instruments in global markets. These contracts offer exposure to the performance of the S&P 500 index, a benchmark that represents the performance of 500 large-cap U.S. companies. Whether used by institutions for hedging or speculators for profit opportunities, S&P futures play a pivotal role in the financial ecosystem. This detailed exploration delves into the mechanics of the S&P 500 futures contract, its components, trading strategies, and its appeal to various market participants.

What are S&P 500 Futures?

S&P 500 futures are derivatives contracts that derive their value from the S&P 500 index. These contracts allow traders and investors to speculate on or hedge against the future performance of the index. Each S&P 500 futures contract represents a fixed dollar amount multiplied by the current index level. For instance, the standard S&P 500 futures contract has a multiplier of $50, while the micro SP futures contract has a multiplier of $5, making it more accessible to individual investors.

The contracts are traded on regulated exchanges, primarily the Chicago Mercantile Exchange (CME), under the product name E-mini S&P 500 futures and Micro E-mini S&P 500 futures. These products are available for trading nearly 24 hours a day, five days a week, ensuring flexibility for participants across time zones.

How to Trade the S&P 500 Futures Contract

Trading the S&P 500 futures index requires understanding the contract’s specifications and the market dynamics. Here are the steps and considerations for trading:

  1. Understand Contract Specifications:
    • Symbol: ES (E-mini), MES (Micro E-mini)
    • Contract Size: The standard E-mini S&P 500 futures contract represents $50 multiplied by the S&P 500 index level. For the Micro E-mini, it’s $5.
    • Tick Size: Each tick (minimum price movement) is 0.25 index points, equivalent to $12.50 for the E-mini and $1.25 for the Micro E-mini.
    • Expiration: Futures contracts expire quarterly (March, June, September, and December), with traders often rolling over positions to maintain exposure.
  2. Set Up a Futures Trading Account:
    • Open an account with a broker authorized to trade CME-listed products.
    • Ensure the account meets margin requirements for trading S&P futures.
  3. Develop a Trading Strategy:
    • Use fundamental analysis, such as economic indicators and corporate earnings, to anticipate market movements.
    • Employ technical analysis to identify price trends and potential entry and exit points.
  4. Risk Management:
    • Set stop-loss orders to limit potential losses.
    • Understand leverage, as futures trading involves significant exposure relative to the margin required.

Who Trades S&P Futures and Why?

The participants in the S&P 500 futures market are diverse, each with unique motivations. They include institutional investors, individual traders, and high-frequency trading firms.

Institutional Investors: Hedging and Portfolio Management

Institutions such as mutual funds, pension funds, and insurance companies frequently use S&P 500 futures to hedge their equity exposure. Hedging involves taking an opposite position in futures to offset potential losses in a portfolio. For instance, if a portfolio manager expects market volatility or a downturn, they might sell S&P 500 futures contracts. This allows them to lock in the current value of their holdings, reducing the impact of adverse price movements.

Speculators: Profiting from Price Movements

Speculators, including retail traders and hedge funds, are drawn to S&P 500 futures for their liquidity, leverage, and potential profitability. Unlike institutional hedgers, speculators aim to profit from price fluctuations in the S&P futures market. They can go long (buy) if they anticipate a market rally or go short (sell) if they expect a decline. The high liquidity of the S&P 500 futures index ensures minimal slippage, even for large trades, making it an attractive choice for speculative strategies.

Arbitrageurs and Market Makers

Arbitrageurs exploit price discrepancies between S&P 500 futures and the underlying index or related financial products. For example, if the futures price deviates significantly from the index value, arbitrageurs may simultaneously buy the underpriced asset and sell the overpriced one, locking in risk-free profits. Market makers, on the other hand, provide liquidity by quoting buy and sell prices, ensuring smooth market functioning.

Components of the Standard and Poor’s 500 Futures Contract

The S&P 500 futures contract is closely tied to the S&P 500 index, which is composed of 500 large-cap U.S. companies across various sectors. Key components include:

  1. Contract Multiplier:
    • The standard multiplier is $50, while the Micro SP futures use a $5 multiplier, catering to smaller investors.
  2. Index Composition:
    • The S&P 500 index itself includes companies from sectors such as technology, healthcare, financials, and consumer discretionary. Heavyweights like Apple, Microsoft, Amazon, and Alphabet significantly influence the index.
  3. Margin Requirements:
    • Traders must deposit an initial margin to open a position and maintain a maintenance margin to keep the position active. Margins are typically a fraction of the contract value, amplifying leverage.
  4. Settlement:
    • S&P 500 futures settle to the index’s final settlement value on expiration. Traders can close positions before expiry or let them settle financially.

Why Institutions Use Futures for Hedging

Institutions favor S&P 500 futures for hedging due to their efficiency, liquidity, and alignment with broad market benchmarks. Here’s why these contracts are essential tools for risk management:

  1. Portfolio Protection:
    • Institutions use S&P futures to shield their portfolios from market downturns. For instance, during economic uncertainty, selling S&P 500 futures can offset potential losses in equity holdings.
  2. Cost Efficiency:
    • Hedging with futures is often cheaper than liquidating and repurchasing a portfolio, especially for large positions. Futures’ leverage ensures that a smaller upfront capital outlay provides significant market exposure.
  3. Tax and Regulatory Advantages:
    • Futures may offer favorable tax treatment compared to other derivatives or direct stock transactions, depending on jurisdiction. They also help institutions comply with risk management regulations.
  4. Global Exposure:
    • Since S&P 500 futures trade nearly 24/7, they provide round-the-clock exposure to U.S. equity markets, enabling real-time adjustments to risk profiles.

The Appeal of Speculating on the S&P 500 Futures Index

Speculators gravitate toward the S&P futures market for its unique features that cater to active trading strategies:

  1. Leverage:
    • Futures offer significant leverage, allowing speculators to control a large market position with a relatively small capital outlay. This amplifies potential profits, though it also increases risk.
  2. Directional Flexibility:
    • Speculators can easily profit in rising or falling markets by going long or short. This dual-direction capability makes S&P 500 futures versatile for diverse market conditions.
  3. Volatility:
    • Market volatility, often driven by economic data releases, geopolitical events, or earnings reports, creates opportunities for intraday and swing trading.
  4. Accessibility:
    • The introduction of Micro E-mini S&P 500 futures has made the market more accessible to smaller traders, enabling them to participate in the index’s movements without excessive risk.

The Standard and Poor’s 500 futures market is a cornerstone of modern financial markets, serving the diverse needs of institutional hedgers and retail speculators alike. By providing exposure to the broad U.S. equity market, the S&P 500 futures index plays a critical role in risk management, price discovery, and speculative trading.

Institutions rely on the futures SP market for efficient hedging and portfolio protection, while speculators are drawn to its liquidity, leverage, and profit potential. With a detailed understanding of contract specifications, trading strategies, and market dynamics, participants can harness the full potential of the S&P 500 futures contract, whether as Micro SP futures or standard-sized contracts.

For more information, click here.

Ready to start trading futures? Call us at 1(800)454-9572 – Int’l (310)859-9572 (International), or email info@cannontrading.com to speak with one of our experienced, Series-3 licensed futures brokers and begin your futures trading journey with Cannon Trading Company today.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if 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.

Important: Trading commodity futures and options involves a substantial risk of loss. The recommendations contained in this article are opinions only and do not guarantee any profits. This article is for educational purposes. Past performances are not necessarily indicative of future results.

This article has been generated with the help of AI Technology and modified for accuracy and compliance.

Follow us on all socials: @cannontrading

Movers and Shakers: Analyzing Market Trends and Upcoming Fed Signals

Posted on by Ilan

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Movers and shakers!

By John Thorpe, Senior Broker

 

Fed Chair Powell speaks tomorrow.

WTI Backwardation:

For a short period of time now, the Crude oil markets structure has been in Backwardation.  Backwardation is where the spot or front futures contract is trading at higher prices than the future or deferred months.

      In the short run , this could be seen as bullish for the commodity, meaning there is a more aggressive need to own or hold the product now, rather than in the future. This could be the result of supply chain issues, geopolitical threats, or in very few cases short covering rallies.

Front Month WTI Crude, January is currently trading at 70.04 up 1.94 from yesterdays close. 40 cents higher than the next month February , and a full dollar higher than April contract currently trading at 69.04..

Backwardation can resolve itself in a day or within months, depending on the perception and severity of the supply side shortage or the demand side aggression.

You may have heard the opposite of Backwardation in the futures markets is Contango. Contango is typically considered a carrying charge market, where the future price or deferred contract prices are higher as a result of cost to carry, storage and insurance.

Today’s movers and shakers

updated: December 3, 2024 9:00 am

**US October 2024 Job Openings and Labor Turnover Summary (JOLTS): 7.744 mln; prior month 7.443 mln

Updated: December 3, 2024 11:33 am

San Francisco Fed President Daly: will have restrictive policy until inflation gets to 2%

Updated: December 3, 2024 11:40 am

Fed Governor Kugler: worries Congress and Trump administration will affect productivity

Tomorrow’s Movers and Shakers.

Fed Chairman Jerome Powell Speaks @ 12:45 CST NYTimes Dealbook Summit.

ADP 7:15 CST, SP Svcs PMI 8:45 CST, ISM Svcs PMI 9:00 CST

 
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Daily Levels for December 4, 2024

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Economic Reports
provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
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.
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.