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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Crude Oil Futures Contracts

Posted on by Cannon Operations

Trading, Legislative Changes, Historical Overview, Top Producers, and the Role of Cannon Trading Company and E-Futures.com

Learn more about trading crude oil with Cannon Trading Company here.

Crude oil futures contracts are vital financial instruments that facilitate trading and hedging activities in the global oil market. In this article, we will explore the top trading crude oil futures contracts, recent legislative changes surrounding them, the trading process, the historical timeline of their introduction to the futures market, and the key players in crude oil contract production. Furthermore, we will discuss the role of Cannon Trading Company and E-Futures.com in trading crude oil futures.

I. Top Trading Crude Oil Futures Contracts:

The two primary crude oil futures contracts that dominate the global market are West Texas Intermediate (WTI) and Brent Crude Oil. These benchmarks serve as references for pricing crude oil and act as foundations for futures trading.

  1. WTI Crude Oil Futures:
    WTI crude oil futures represent the oil produced in the United States, primarily from the Permian Basin in Texas. WTI contracts are traded on the New York Mercantile Exchange (NYMEX) and are denominated in U.S. dollars.
  2. Brent Crude Oil Futures:
    Brent crude oil futures are derived from the North Sea oil produced in the Brent oilfield. These contracts are traded on the Intercontinental Exchange (ICE) and are denominated in U.S. dollars. Brent crude serves as a benchmark for pricing crude oil in Europe, Africa, and the Middle East.

II. Recent Legislative Changes:
Legislation surrounding crude oil futures contracts aims to promote market stability, transparency, and fair trading practices. Recent changes have focused on several key areas:

  1. Environmental Regulations and Energy Transition:
    In response to growing concerns over climate change and the need to transition to cleaner energy sources, legislative changes have been implemented to incentivize sustainable practices and reduce reliance on fossil fuels. These changes may impact the demand for and trading of crude oil futures contracts, especially as the world moves towards renewable energy alternatives.
  2. Regulatory Oversight and Market Surveillance:
    Enhanced regulatory oversight seeks to prevent market manipulation, ensure fair trading practices, and safeguard the integrity of crude oil futures markets. Stricter reporting requirements, increased transparency, and monitoring mechanisms have been introduced to promote market stability and protect market participants.

III. Trading Crude Oil Futures Contracts:

Crude oil futures contracts are traded on established futures exchanges, such as NYMEX and ICE. The trading process involves several key steps:

  1. Market Participants:
    Various participants engage in trading crude oil futures contracts, including commercial entities (such as oil producers, refiners, and end-users) seeking to manage price risks, speculators aiming to profit from price fluctuations, and institutional investors looking to diversify their portfolios.
  2. Contract Specifications:
    Crude oil futures contracts have standardized specifications, including the contract size, delivery location, quality of crude oil, and expiration months. These specifications ensure uniformity and ease of trading.
  3. Trading Platforms and Execution:
    Crude oil futures contracts are predominantly traded electronically. Traders access trading platforms provided by brokerage firms, such as Cannon Trading Company and E-Futures.com, to submit orders. These platforms offer real-time market data, order management tools, and execution capabilities.
  4. Margin Requirements and Leverage:
    To participate in crude oil futures trading, market participants are required to meet margin requirements, which act as collateral against potential losses. Margin allows traders to leverage their positions, amplifying potential gains or losses.

IV. Historical Overview of Crude Oil Futures Trading:
Crude oil futures trading has a rich history, with its origins dating back to the mid-19th century. The development of formalized futures markets for crude oil revolutionized risk management and price discovery in the energy sector.

  1. Early Beginnings:
    The first crude oil futures contracts were traded in the United States during the 1850s. These contracts allowed producers and consumers to hedge against price fluctuations and secure future supplies. However, the modern futures market for crude oil began to take shape in the 1970s.
  2. Evolution and Global Expansion:
    Crude oil futures trading evolved throughout the 20th century, driven by advancements in technology, increased globalization, and the establishment of benchmark crude oil grades. The introduction of standardized contracts and electronic trading platforms facilitated the growth and accessibility of crude oil futures markets.

V. Top Producers of Crude Oil Contracts:

Several countries play significant roles as producers and exporters of crude oil futures contracts, influencing global oil markets. The top producers include:

  1. United States:
    The United States is a major producer and consumer of crude oil. Through its WTI crude oil futures contract, the country holds substantial influence in the global oil market due to its significant domestic production, advanced infrastructure, and active financial markets.
  2. OPEC Countries:
    The Organization of the Petroleum Exporting Countries (OPEC) member countries collectively hold significant sway over crude oil prices and trading. Prominent OPEC producers include Saudi Arabia, Iraq, Iran, and the United Arab Emirates.
  3. Russia:
    Russia ranks among the world’s top crude oil producers and exporters, impacting global oil prices. Russian crude oil, particularly the Urals blend, serves as a benchmark in European markets.
  4. Other Producers:
    Canada, China, Brazil, and various countries in Africa, such as Nigeria and Angola, are also noteworthy producers of crude oil contracts.

VI. Cannon Trading Company and E-Futures.com in Crude Oil Futures Trading:
Cannon Trading Company and E-Futures.com are well-known brokerage firms that provide trading services and platforms for various futures contracts, including crude oil.

  1. Cannon Trading Company:
    Cannon Trading Company is a futures brokerage firm offering a range of services to traders, including access to various markets, trading platforms, research tools, and personalized customer support. They facilitate the trading of crude oil futures contracts, including WTI and Brent.
  2. E-Futures.com:
    E-Futures.com is an online futures trading platform that provides traders with access to multiple futures markets, including crude oil futures contracts. It offers advanced trading tools, real-time market data, and execution capabilities.

Crude oil futures contracts, particularly WTI and Brent, dominate the global oil market and provide a means for participants to manage price risks and engage in speculative activities. Recent legislative changes focus on environmental concerns and market oversight. Trading these contracts involves standardized specifications, electronic platforms, and margin requirements. The historical evolution of crude oil futures trading spans over a century, leading to the establishment of benchmark grades and global trading platforms. The top producers of crude oil contracts include the United States, OPEC countries, Russia, and other major oil-producing nations. Cannon Trading Company and E-Futures.com serve as brokerage firms facilitating the trading of crude oil futures contracts, enabling market participants to access these markets efficiently and effectively.

Ready to start trading futures? Call 1(800)454-9572 and speak to one of our experienced, Series-3 licensed futures brokers and start your futures trading journey with Cannon Trading Company today.

Disclaimer – Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  Past performance is not indicative of future results. 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.

Customized Trading Signals + Futures Trading Levels for July 26th 2023

Posted on by Ilan
Get Real Time updates and more on our private FB group!

Live Customized Trading Signals on your Charts

Try our in-house created family of technical studies

 

 

Free 3-week trial includes video tutorial and 23-page PDF e-book, explaining the studies’ approach and how to apply them to your trading.

 

Approach focuses on counter-trend and trend following price action and trade management.

 

Some examples for educational purposes below in the screen shot

 

Sign up for a Free Trial of our in-house signals HERE

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Plan your trade and trade your plan.

 

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

for 07-26-2023

#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG

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Economic Reports, Source: 

Forexfactory.com

 

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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

Outlook for the Week Ahead + Futures Levels 7.25.2023

Posted on by Ilan
Get Real Time updates and more on our private FB group!

The week ahead Earnings, Earnings, FOMC, ECB Rate decision and more Earnings and more govt reports!

Tuesday @ 9 am CDT US Consumer confidence will be released, expectations are for better than last month by a few bases points then : Tuesday after the close GOOG reports Q2 earnings expectations are +$1.34 per share. MSFT also reports it’s fiscal Q4 , expectations are for earnings +$2.55 per share, Regional banks will also be reporting this week, The Regionals have the largest exposure to the Commercial Real Estate problem, keep a close on on any developments here. Wednesday META reports +$2.91 expected Thursday AMZN +$.34 expected.  Govt Reports: Tuesday thru Friday C Confidence mentioned above and the start of the FOMC the last one until September Expectations are currently projected with a confidence rating of 98.9% for a .25 increase to the 5.25=5.50 range. The actual announcement is Wednesday @ 1pm CDT with a press conference to follow 30 minutes later . Thursday the ECB announces it’s short term rate policy and they are expected to follow suit another .25 @ 7:15 am CDT. Q2 GDP is released at 7:30 CDT along with Durable goods, Intl trade in Goods ands US Jobless claims. Friday we can take a breath as the markets unwind their directions from the previous three days and will tend to reverse in a risk off stance prior to the weekend as we head toward the Dog Days of summer.

 

Plan your trade and trade your plan.

 

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

for 07-25-2023

#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG

3b644da2 2bee 4d39 8d98 5208a20bec39

Economic Reports, Source: 

Forexfactory.com

 

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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

Weekly Newsletter: Bollinger Bands & Parabolics + Levels for July 24th

Posted on by Ilan

Cannon Futures Weekly Newsletter Issue # 1155

 

Join our private Facebook group for additional insight into trading and the futures markets!

Have a safe Memorial Day Weekend. Trading Schedule HERE

In this issue:

  • Important Notices – FX Trading Contest
  • Trading Resource of the Week – Parabolics & Bollinger Bands
  • Hot Market of the Week – November Beans
  • Broker’s Trading System of the Week – NQ Day Trading System
  • Trading Levels for Next Week
  • Trading Reports for Next Week

 

  • Important Notices – FX Trading Contest

Participate in the upcoming Currency Cup: FX Trading Challenge where you’ll trade our suite of highly liquid benchmark FX contracts in a risk-free environment while competing against other traders for the chance to win cash prizes.
Learn how to trade FX futures and options
Through participation in our challenge, you’ll receive daily exclusive educational videos where you’ll learn about the key benefits of trading FX futures contracts.
Trade the world’s leading currencies
Competition Dates
Starts:
Sunday, July 23 at 5:00 p.m. CT / 22:00 UTC
Ends:
Friday, July 28 at 12:00 p.m. CT / 17:00 UTC
Prize Details
Overall Leaderboard
First Place Prize: $2,500
Second Place Prize: $1,500
Third Place Prize: $850
 This competition is open to residents in the United States (US), Canada (CA) excluding Quebec, *Brazil (BR), United Kingdom (UK), Germany (DE), Netherlands (NL), Switzerland (CH), United Arab Emirates (UAE), Dubai International Financial Centre (DIFC), Abu Dhabi Global Market (ADGM), Republic of Korea (KR), Taiwan (TW), and Japan (JP).
*Residents of Brazil must have a bank account in the United States to be eligible to receive a prize.
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  • Trading Resource of the Week – Parabolics and Bollinger Band

By Ilan Levy-Mayer, VP
Watch video below on how you can utilize the Bollinger bands and parabolics studies in different ways.
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Try a FREE demo of the platform used to show the charts in this educational article. The platform is FREE and has charts, news, DOM, T&S, Alerts, advanced order entry, options and MUCH MORE!
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.
November Beans Extended the rally above $14 when the chart is attacking overhead and the December High ($14.27 )and last Springs contract High ($14.48). New sustained highs above these levels would open the top side for a possible run to the low percentage fourth upside PriceCount objective near the 15.82 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.
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With algorithmic trading systems becoming more prevalent in portfolio diversification, the following system has been selected as the broker’s choice for this month.
PRODUCT
SYSTEM TYPE
Intraday
Recommended Cannon Trading Starting Capital
$30,000
COST
USD 255 / monthly
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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.
Sign Up for a Free Personalized Consultation with a Broker from Cannon Trading Company
Questions about the markets? trading? platforms? technology? trading systems? Get answers with a complimentary, confidential consultation with a Cannon Trading Company series 3 broker.

  • Trading Levels for Next Week

Daily Levels for July 24th, 2022
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
Would you like to receive daily support & resistance levels?
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Weekly Levels

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  • Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week: www.mrci.com 
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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein 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 judgment in trading.

 

Good 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.

Trading Levels for Tomorrow + Trading contest: Demo account, real cash prizes!

Posted on by Ilan
Get Real Time updates and more on our private FB group!

Highlights, Announcements  by Mark O’Brien, Senior Broker

 

General: 

 

Forecasts for the U.S. economy continue to reduce the chances of recession – or if one arrives its lower severity – as readings for reports like the Consumer & Producer Price Indexes and Personal Consumption continue to show inflation is coming under control.  At the same time, fear has dissipated that the Federal Reserve’s interest rate policies will destabilize the business climate, particularly as it related to employment and hiring, albeit having cooled somewhat last month.  Signs indeed point to the FOMC taking more of a wait-and-see stance in its upcoming meetings than the sense of tenacity it shown in raising rates eleven consecutive times ending in May.  In the background, the U.S. dollar has drifted south giving exports a boost.

 

Agricultural: 

 

Orange Juice futures (basis Sept.) traded to new all-time highs this week on the heels of Tuesday’s USDA crop report showing the U.S. orange crop’s 23% decline from last year and the smallest since 1937.  As of this typing prices touched $2.9155 per pound intraday (contract size: 15,000 pounds).  This is a substantial 90-cent price increase for the year, including a ±40-cent/$6,000 per contract move up in price this month alone.

 

 

The extreme heat across parts of the U.S., including low triple-digit temperatures forecast in key soybean and corn production areas next week have further threatened this year’s already stressed crops.  In addition, grain supply disruptions related to the war in Ukraine are adding pressure on global grain supplies.  Soybean futures (basis August) remain near their contract highs close to $15.00 per bushel and corn futures (basis September) have climbed back above $5.50 per bushel intraday today and yesterday, half-way back to its mid-June highs near $6.25 per bushel.

 

Financial: 

 

What a run for stock index futures the last two weeks.  Prior to what looks like a meaningful down day today, the Dow Jones cash market had risen seven consecutive days – since Mon. July 10 – its longest winning streak since March 2021.  The Sept. YM futures contract made a similar move: up ±1450 points from its closing price of Friday July 7 to Wednesday’s intraday high.  That’s a $7,250 per contract move.  The ES made a similar ±8,500 per contract move and the NQ made an impressive ±$17,100 move.

 

 

Plan your trade and trade your plan.

 

Trading Contest – Win Real Cash Trading Simulated Account!

Currency Futures Trading Challenge

Sign up for the Cannon Trading via  CME Group FX Futures Trading Challenge for your chance to sizzle the competition this summer – Trade futures currencies like the euro, Canadian dollar, Yen, British pound and other contracts in a risk-free environment while competing with fe11ow traders for a cash prize•.

Duration

Starts:

Sunday, July 23 at 5:00 p.m. CT / 22:00 UTC

Ends:

Friday, July 28 at 12:00 p.m. CT / 17:00 UTC

Prizes

 Prize Details

Overall Leaderboard

First Place Prize: $2,500

Second Place Prize: $1,500

Third Place Prize: $850

Sign up NOW

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Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

for 07-21-2023

#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG

3b644da2 2bee 4d39 8d98 5208a20bec39

Economic Reports, Source: 

Forexfactory.com

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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

Trading Levels for July 20th – Range Bar Charts for Day Trading

Posted on by Ilan
Get Real Time updates and more on our private FB group!

Watch the video below for ideas if using VOLUME and/or RANGE bar charts while day trading can help you filter out the noise and get signals FASTER when volume and price action are active?
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Plan your trade and trade your plan.

 

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Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

for 07-20-2023

#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG

3b644da2 2bee 4d39 8d98 5208a20bec39

Economic Reports, Source: 

Forexfactory.com

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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

Trading Levels for July 18th – Earnings Season in Full Effect

Posted on by Ilan
Get Real Time updates and more on our private FB group!

The Week Ahead by John Thorpe, Senior Broker:

Govt Reports, Earnings and the Fed Blackout period.

On the close of Business June 16th the S&P was at 4453.00, today we have a hi as of this writing, with 3.5 more hours to go in the session, of 4553.50 Up 100 points and of course, not in a straight line.

This does illustrate a continued bullish undertone. S&P + .022%, The NQ is up .035% and the broadest market index, the Russell index, the winner over this time period, up .041% .

This brings us to a number of questions: can the rally that begin in March continue through the summer? What factors is the market watching for clues and direction?

This week the most meaningful economic numbers to be released should be the June data on retail and food services sales at 7:30am CT on Tuesday. Inflation expectations are overall well-anchored, if at levels a bit above where they were before the current episode began in 2021.

Earnings season has arrived. Last week the JPM and C released their numbers,  This week the Regional Banks will start reporting results in addition to B of A, Morgan Stanley and Goldman Sachs, the Tech and consumer stocks the market will be very interested with are Tesla and Netflix. United Airlines reports as well.

Expectations are certainly muted from a year ago, and the lowered expectations have already been inserted on the game board by most analysts and ratings firms. Therefore, any good news should have a positive impact on the indices continued grind higher.

Of note this week is the Fed Black out period in advance of the July 25-26 meeting where traders are currently expecting another .25 rate hike after the last sessions pause.

 

Plan your trade and trade your plan.

 

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Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

for 07-18-2023

#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG

3b644da2 2bee 4d39 8d98 5208a20bec39

Economic Reports, Source: 

Forexfactory.com

 

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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

Trading Futures Options vs. Trading Commodity Futures

Posted on by Cannon Operations

Pros and Cons, Risk vs. Reward, and Techniques for Trading Options on Futures

Read more about trading futures here

Trading futures options and commodity futures are both popular strategies in the financial markets. While they share some similarities, there are distinct differences in their structure, characteristics, and potential benefits and risks. In this article, we will explore the pros and cons of trading futures options compared to trading commodity futures, and discuss the risk versus reward dynamics of these approaches. Additionally, we will delve into various techniques used for trading options on futures.

Pros and Cons of Trading Futures Options: Trading futures options offers several advantages. One key benefit is the leverage and potential for higher returns. Options allow traders to control a larger position in the underlying futures contract with a relatively smaller investment. This amplifies the profit potential when the market moves favorably. Additionally, options provide traders with the flexibility to design strategies for different market conditions, including bullish, bearish, and neutral scenarios.

Another advantage of trading futures options is the limited risk involved. Unlike futures contracts, purchased options have a predefined maximum loss, which is limited to the premium paid. This can provide a sense of security for traders, as they know their maximum potential loss upfront. Additionally, options can be used as a hedging tool to protect against adverse price movements in the underlying futures contract.

However, trading futures options also has its drawbacks. Options have an expiration date, which means traders must be mindful of time decay. As the option approaches its expiration, its value may erode rapidly, even if the underlying futures price remains relatively stable. This time decay factor can lead to losses for option buyers if the market does not move in the anticipated direction within the desired timeframe.

Furthermore, liquidity can be a concern when trading futures options. Compared to commodity futures, options markets may have lower liquidity, resulting in wider bid-ask spreads. This can impact the ease of executing trades and may lead to slippage. Traders should consider the liquidity of options on the futures they are interested in before initiating positions.

Risk vs. Reward Dynamics: Trading futures options involves a trade-off between risk and reward. On the risk side, the maximum loss for an options buyer is limited to the premium paid. However, if the market moves against the anticipated direction, the loss can be substantial relative to the premium. This risk can be mitigated by employing risk management techniques, such as stop-loss orders or position sizing based on a predetermined percentage of the trading capital.

On the reward side, trading futures options can offer significant profit potential. When the market moves favorably, options traders can benefit from leverage and achieve higher returns compared to the premium invested. This potential upside can attract traders seeking enhanced profit opportunities. However, it’s important to note that trading futures options requires skillful market analysis and timing to capture these gains.

Techniques for Trading Options on Futures: Several techniques are commonly used when trading options on futures. These include:

  1. Long Call or Put: This is a directional strategy where traders buy call options if they expect an upward price movement or put options if they anticipate a downward price movement in the underlying futures contract.
  2. Covered Call or Put: In this strategy, traders simultaneously own the underlying futures contract and sell a call or put option against it. This technique generates income from the premium received, but limits the potential upside.
  3. Spread Strategies: These involve the simultaneous purchase and sale of multiple options contracts with different strike prices or expiration dates. Examples include vertical spreads (bull call spread, bear put spread), horizontal spreads (calendar spread), and diagonal spreads.
  4. Long Straddle and Strangle: These strategies involve buying both a call and a put option (straddle) or buying out-of-the-money call and put options (strangle) with the expectation of significant price volatility. They can profit from large price swings regardless of the market direction.
  5. Long Butterfly and Condor: These strategies involve combining multiple call and put options to create a position with limited risk and limited profit potential. They are suitable when the trader expects the underlying futures price to remain within a specific range.

It’s important for options traders to understand the characteristics, potential risks, and rewards associated with each strategy. Thorough analysis and consideration of market conditions are crucial for successful options trading.

Trading futures options and commodity futures each have their own advantages and disadvantages. Buying futures options offers leverage, flexibility, and limited risk, but also involves time decay and potential liquidity concerns. It requires careful analysis, risk management, and knowledge of various options trading techniques. On the other hand, trading commodity futures provides direct exposure to the underlying asset, potentially greater liquidity, and no time decay. Traders should carefully assess their risk tolerance, market outlook, and trading goals to determine the most suitable approach for their investment objectives.

Ready to start trading futures? Call 1(800)454-9572 and speak to one of our experienced, Series-3 licensed futures brokers and start your futures trading journey with Cannon Trading Company today.

Disclaimer – Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  Past performance is not indicative of future results. 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.

Weekly Newsletter: The Rising Wedge Trading Pattern + Levels for June 17th

Posted on by Ilan

Cannon Futures Weekly Newsletter Issue # 1154

 

Join our private Facebook group for additional insight into trading and the futures markets!

Have a safe Memorial Day Weekend. Trading Schedule HERE

In this issue:

  • Important Notices – FX Trading Contest
  • Trading Resource of the Week – Trading Pattern: Rectangle Trading
  • Hot Market of the Week – August Live Cattle
  • Broker’s Trading System of the Week – ES Day Trading System
  • Trading Levels for Next Week
  • Trading Reports for Next Week

 

  • Important Notices – FX Trading Contest

Participate in the upcoming Currency Cup: FX Trading Challenge where you’ll trade our suite of highly liquid benchmark FX contracts in a risk-free environment while competing against other traders for the chance to win cash prizes.
Learn how to trade FX futures and options
Through participation in our challenge, you’ll receive daily exclusive educational videos where you’ll learn about the key benefits of trading FX futures contracts.
Trade the world’s leading currencies
Competition Dates
Starts:
Sunday, July 23 at 5:00 p.m. CT / 22:00 UTC
Ends:
Friday, July 28 at 12:00 p.m. CT / 17:00 UTC
Prize Details
Overall Leaderboard
First Place Prize: $2,500
Second Place Prize: $1,500
Third Place Prize: $850
 This competition is open to residents in the United States (US), Canada (CA) excluding Quebec, *Brazil (BR), United Kingdom (UK), Germany (DE), Netherlands (NL), Switzerland (CH), United Arab Emirates (UAE), Dubai International Financial Centre (DIFC), Abu Dhabi Global Market (ADGM), Republic of Korea (KR), Taiwan (TW), and Japan (JP).
*Residents of Brazil must have a bank account in the United States to be eligible to receive a prize.
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  • Trading Resource of the Week – : Rectangle Trading Pattern

By Joe Easton, Senior Broker
Formation:
  •    This pattern is defined as price coming into a tight range between support and resistance
  •    This pattern is a continuation pattern. If the trend was up it will continue up and down it will continue down
  • Typically, volume is lower through this period of consolidation.

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Try a FREE demo of the platform used to show the charts in this educational article. The platform is FREE and has charts, news, DOM, T&S, Alerts, advanced order entry, options and MUCH MORE!
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In the examples above the range is creating a rectangle pattern in an uptrend. Ideally this pattern breaks higher without breaking lower support. If lower support is broken this pattern would no longer be a rectangle.
How to Trade:
The ideal entry is toward the bottom of the rectangle support. If entered on this line your stop should be below support. Price should bounce off support 2 to 3 times to be confident support is present.
The more conservative entry would be when the resistance in the rectangle is broken. This can happen very quickly and needs to be timed more accurately. The lower support line then becomes your stop. You could also make the resistance line become your stop.
When price breaks out you can measure the width of rectangle and project the price to move from the breakout that same distance at a minimum.
Summary:
Rectangles patterns exist in low volume consolidation in both uptrends and downtrends. Price corrects in two ways, time and price. This would classify more as a time correction considering price stays relatively consistent. Once price closes above the resistance you can expect the price to not retrace back into the rectangle. If there is a false breakout, the continuation is less likely to occur. Generally, if you are able to spot a rectangle you can expect the price trend to continue.
Important: Trading commodity futures and options involves a substantial risk of loss.
The recommendations contained in this chart are of opinion only and do not guarantee any profits.
Past performances are not necessarily indicative of future results
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.
August Live cattle Is extending its rally into new highs where the chart is taking aim at its low percentage fourth upside PriceCount to the 183.30 area. This objective is consistent with the weekly chart High established last month it should be enough to satisfy this phase of the bull market.
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.
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With algorithmic trading systems becoming more prevalent in portfolio diversification, the following system has been selected as the broker’s choice for this month.
PRODUCT
SYSTEM TYPE
Intraday
Recommended Cannon Trading Starting Capital
$12,000
COST
USD 130 / monthly
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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.
Sign Up for a Free Personalized Consultation with a Broker from Cannon Trading Company
Questions about the markets? trading? platforms? technology? trading systems? Get answers with a complimentary, confidential consultation with a Cannon Trading Company series 3 broker.

  • Trading Levels for Next Week

Daily Levels for July 17th, 2022
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
Would you like to receive daily support & resistance levels?
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Weekly Levels

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  • Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week: www.mrci.com 
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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein 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 judgment in trading.

 

Good 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.

Trading Levels for July 14th – UoM Consumer Sentiment UoM Inflation Expectations

Posted on by Ilan
Get Real Time updates and more on our private FB group!

An Introduction To Trading Futures

An introductory guide to trading futures. If you’re a trader who is interested in branching out from equities or cash FX into futures, this guide will provide a great starting point. If you already know something about futures trading, you can jump to any chapter for a review or to the back of the booklet and test your knowledge in our Futures Quiz.

 

Plan your trade and trade your plan.

 

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Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.

Futures Trading Levels

for 07-14-2023

#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG
#ES, #NQ, #YM, #RTY, #XBT, #GC, #SI, #CL, #ZB, #6E, #ZC, #ZW, #ZS, #ZM, #NG

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Economic Reports, Source: 

Forexfactory.com

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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.

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.