commodity trading newsletter

Carley Garner, an experienced commodity broker and futures market strategist at DeCarley Trading, writes two commodity trading newsletters for DeCarley brokerage customers; The DeCarley Perspective and the Financial Futures Report.  

The DeCarley Perspective is a commodity trading newsletter offering readers insight into the fundamental and technical analysis of the futures markets, as well as price predictions.  The futures trading newsletter also offers specific trading recommendations which include option selling strategies, commodity option spread trading, and outright futures positions. 

The Financial Futures Report is a daily publication with a focus on stock index futures (primarily the e-mini S&P 500 futures), and Treasury futures (T-Bond and T-note).  

  • 30-year Treasury futures short squeeze and never-ending ES rally

    the financial futures report

    We are seeing history being made here folks...

    One of the fundamental concepts of market characteristics is they generally don't go straight up or straight down, yet that is exactly what we are seeing in the e-mini S&P futures. We are seeing the stock indices achieving record-breaking streaks in regard to new highs and muted volatility levels. For example, yesterday the Dow posted the 10th positive consecutive close for the first time in four years and there have been only four occasions in history in which we've seen more than 10 positive closes in a row. The Dow also closed at a new high for the 10th consecutive day for the first time since January of 1987. Similarly, the annualized volatility thus far in 2017 is 5.9%, the tamest start to a year since 1966. Just as concerning, the S&P has gone 92 days without a 1% decline, this is the longest streak since 2006 and the S&P hasn't had a 1% intraday move since December 15th, this is the longest such streak in history!

    The point is, the one directional trade and lack of volatility we are seeing in the ES is rare. And it is also dangerous. You might have noted a few of the years referenced above being on, or just before, significant market declines. We happen to believe this bull has quite a bit of room to run in the long-run, so we aren't looking for an 1987-style crash but it is worth noting that "never-ending" rallies can be unstable once they finally correct. Caution is warranted.

  • Brexit breaks the futures markets

    the financial futures report

    Citizens of Britain opted to take a bold stance, and the financial futures markets paid the price

    If you were on the sidelines last night when the news hit, congratulations. It is easy to get sucked into the sorrow of knowing you missed out on some big market moves, but the reality is....most traders attempting to surf the waves of volatility wiped out. Either they were stopped out prematurely on the pre-Brexit realization, or they were too late to react and sold the lows in the ES (or bought the highs in the ZB). Many of my colleagues were watching the futures markets from afar, and happy to be experiencing one of the largest currency and Treasury moves in history with a bowl of popcorn in their lap instead of a bottle of whiskey.

    We aren't even going to attempt to predict what Monday will look like. Nor will we make any trading recommendations until the chaos dies down. That said, we will be strongly considering adding to our short Fed Funds futures position early next week.

     

  • Complimentary Subscription to The DeCarley Perspective...

    *If you have already enjoyed a trial of this futures trading newsletter, please open a commodity trading account with DeCarley Trading to continue to receive it.

    the decarley perspective commodity trading newsletter

    The DeCarley Perspective is an e-blast trading newsletter with a focus on the commodity futures markets, and options on futures trading. It is distributed to commodity trading clients of the DeCarley Trading brokerage service. 

    This commodity trading newsletter, written by Stocks & Commodities columnist and commodity broker, Carley Garner, provides a refreshingly honest and comprehensive perspective of the current commodity and financial market environments. The DeCarley Perspective is distributed several times throughout the month to those with an active commodity brokerage account with DeCarley.  This newsletter covers both the futures and options markets for commodity products such as the grains, meats, softs, metals, energies, currencies, interest rates, and the stock indices.

    In each edition of the newsletter, futures broker Carley Garner, of DeCarley will share insights into fundamental commodity market analysis in addition to the seasonal outlook of various futures markets.   This futures trading newsletters includes a substantial amount of technical analysis performed on the commodity markets, with visual charts to support opinions. "The DeCarley Perspective" may contain specific trading recommendations (primarily option trading strategies) or broad based commodity trading strategy ideas.

    All fields must be completed to be granted a trial

     

     *There is substantial risk of loss in trading futures and options!

     

  • Complimentary Trial: Financial Futures Report

    *If you have already enjoyed a trial of this futures trading newsletter, please open a commodity trading account with DeCarley Trading to continue to receive it.

    the financial futures report e-mini S&P trading newsletter

    The Financial Futures Report is an e-blast commodity trading newsletter distributed to DeCarley Trading futures brokerage clients, free of charge.

    DeCarley Trading newsletters and educational articles written by experienced futures broker, Carley Garner, have managed to "garner" a loyal following in the trading community.  Both beginning and experienced futures traders will likely find the content useful and hopefully profitable; particularly those day trading the e-mini S&P.  Whether you trade options or futures you will likely be pleased with the guidance provided by The Financial Futures Report. If you are serious about learning to trade futures, this is a must have!

    The Financial Futures Report e-blasts include daily futures market commentary on Treasury futures (futures symbols ZB, ZN, and ZF) and stock index futures (futures symbols ES, NQ, YM), trade recommendations (largely option trading strategies), an insider's perspective, honest and reliable analysis, and commodity market strategy.

    All fields must be completed to be granted a trial

     


    * DeCarley Trading reserves the right to terminate trial subscriptions at any time.  If you have already enjoyed a trial subscription, please open a trading account with DeCarley to continue receiving the newsletter.

     
  • Did stock index futures and WTI crude just decouple?

    the financial futures report

    Are we finally going to see the correlation between stocks and oil soften?

    In overnight trade, it was the same 'ol, same 'ol. Crude and stock index futures moved together in lockstep; we saw the same action in early day session trade. Yet, after the Fed meeting, each market seems to be willing to have it's own reaction to the Fed news. Crude oil squeezed, and held, well into positive territory while the stock market remained under moderate pressure. This probably isn't an immediate game changer, but it is a step in the right direction and is worth noting. Both assets trading as one isn't healthy for the financial markets, or the commodity markets. In fact, it should eventually be bullish for stocks...after all, they've taken a hit at the hands of the crude oil futures slide.

    The big news of the day was the Fed meeting. The meeting itself was considered to be "dead" going in. This means that few (nobody) believed there was a chance for a policy change, but traders were hoping for hints regarding the pace of upcoming interest rate hikes. In a nutshell, they were very careful to leave a rate hike in March as a possibility, while simultaneously noting softening conditions that probably won't warrant another immediate tightening of credit. In the end, the news was relatively neutral to slightly bearish for stocks, but seems to have been enough to throw cold water on market volatility, which is a blessing in itself.

  • Dip buyers come to the rescue in the ES futures

    the financial futures report

    Drug Stocks and Homebuilders bring stock indices down

    Off the cuff comments made by the President-elect yesterday regarding US drug companies and a realization that higher trending interest rates (despite the recent recovery) is hurting the housing market, soured the equity market rally. As is usually the case, the market wasn't reacting to changes in fundamentals but rather expectations of changes in fundamentals. Accordingly, as we go on traders will either retract their initial reactions to these events or add to them. At the moment we are merely seeing back and fill trade as expectations are tempered. Today's trade wasn't a victory for the bears or a defeat of the bulls, it was simple consolidation.

    The economic docket for tomorrow is busy, but we doubt the market will be paying attention to the second-tier reports (PPI, Retail Sales, and Michigan Sentiment). The fireworks will likely be next week with the Presidential inauguration (who knows what types of market-moving comments could be made on both sides of the isle).

  • e-mini S&P 500 futures "should" test 2026ish technical support next

    the financial futures report

    Overnight volatility blamed on a surprise Australian interest rate cut, and weak data in China but...

    Most business news stations were attributing the overnight selling in U.S. stock index futures to weak economic data in China, and an unexpected rate hike by central bankers in Australia. However, the Asian markets traded mostly higher on the news because they've fallen into the "bad news is good news" trap (weak data increases the odds of more stimulus). Further, lower rates in Australia should be a positive for the global markets overall.

    We think a better explanation for the selling was the sharp move in the currency markets. The dollar index plunged well below 93.00, while the euro soared above $1.16. These are both major milestones, which were passed in volatile trade. Thus, we believe despite the fact that a weaker dollar will boost corporate earnings, the uncertainty of volatile currency trading prompted selling in U.S. and European equities.

    Ironically, the seasonal low for the dollar and peak for the euro is due this week...so perhaps the currency markets are in the process of reversing course in the short-run. In short, last night's "break-out" might turn into a trap.

  • E-mini S&P Futures selling could be limited

    the financial futures report

    The energy futures market is still in control

    It will be difficult for the stock market to get much of anything going on the upside, without stability in the energy market. Both crude oil and natural gas have fallen to levels of despair for energy producers. Further, economies in oil rich areas such as Houston, and parts of New Mexico and Colorado, as well as the Bakken, are slumping significantly.

    As is often the case with bubbles, sometimes they are only obvious after the fact. I should have known when my brother, a long-time member of the oil industry disclosed to me that oil field workers were paying New York style rents for run-down trailers near Farmington New Mexico (an oil rich area).

    With oil valued above $100 it was clear the there was some exuberance that needed to be worked out, but few would have predicted a $30 handle a year and a half later. Nevertheless, here we are...and ironically, investors are praying for higher energy prices to avoid debt defaults that could send stocks reeling. Luckily, the Euro seems to have put in a long-term bottom..if this is the case, oil should eventually follow suit.

    See our thoughts on this in the latest DeCarley Perspective: https://madmimi.com/s/ed5507

  • ES futures bulls finally broke the selling cycle

    the financial futures report

    Wednesday's long squeeze quickly became the Thursday/Friday short squeeze

    Although in the heat of the moment on Wednesday morning, most online and TV chatter suggested the capitulation had yet to come, it seems it already had. The ES has rebounded nearly 100 points from Wednesday's lows and crude oil has bounced nearly $5.00 per barrel. It is unfortunate that margin calls, and fear, likely left a handful of bulls watching the recovery from the sidelines after they had realizing massive loses. Unfortunately, when volatility picks up, so do these types of stories.

    Although this type of stop loss running and squeezing out the weak hands has always been a part of the financial and commodity markets, I would argue that computerized trading has increased the frequency of exaggerated moves. In the same manner natural gas futures traded well beyond reasonable fundamentals for three for four days in December prior to a quick snap back rally, we saw the same nonsense in oil and, therefore, equities.

    If it weren't for the no crying in commodities rule, we might have shed a tear. Luckily most clients were able to ride the storm with most positions in tact...and at least for today, the S&P, crude oil, and the 10-year note is all moving our way.

  • Financial Futures Report Archives

    the financial futures report

     

    The Financial Futures Report is a commodity trading newsletter focused on the e-mini S&P futures, the 30-year bond futures market, and the 10-year note futures.  

    The author, Carley Garner, is an experienced commodity broker with plenty of stories and insight to share.  Garner keys off of her decade-plus experience as a futures broker to help readers navigate the options and futures markets.  The Financial Futures Report contains general stock index futures and Treasury market commentary, but it also details trading ideas (primarily option trading strategies), technical analysis including support and resistance levels, and commodity trader chatter. 

    This publication is offered exclusively to DeCarley Trading commodity brokerage clients, but can be obtained temporarily via a trial.  

  • FOMC and option expiration on deck, back and filling in ES futures?

    Heavy commodities and light economic data weigh on stocks

    Two consecutive days of sharp crude oil declines reminded traders of the chaos energy markets inflict on the financial markets. As a result, the e-mini S&P suffered moderate losses in overnight trade. However, it was weak economic data that kept prices under pressure throughout the session.

    February retail sales came in at a a negative .1% for both the headline number and ex-auto. Although this was an improvement from January, it is hardly reason to go out and buy stocks. Similarly, the Empire Manufacturing data improved markedly from last month to a positive 0.6, but simply posting a slightly positive number isn't enough to get investors excited. Today's PPI data, reported a decrease in prices at the producer level of .2%. Thus, last month's hint at inflation was dissolved.

    Tomorrow we'll hear about the latest data on consumer prices and housing starts, but I'm not sure it will matter to the market. All eyes are on the FOMC interest rate decision, which will be released at 2:00 Eastern.

  • FREE Futures and Options Trading Newsletters

    The missing piece to the puzzle?

     

    As commodity brokers, we take pride in offering free futures and options trading newsletters to DeCarley Trading clients. Our goal is to keep both futures, and options, traders on top of current events and market opportunities, while ensuring they fully understand the risks and rewards of commodity trading.

    Sign up to receive a free trial of our commodity trading newsletters delivered directly to your in-box. Each newsletter contains an honest and fresh perspective of the futures markets, along with actionable trading recommendations for futures and options traders.

  • Futures markets are recalibrating to China, but most of the pain is probably over

    the financial futures report

    Holiday futures markets didn't disappoint, but the Santa Claus rally did

    As is almost always the case, thinly traded holiday markets made for some exciting trades. Perhaps they were most exciting for those on the sidelines watching from afar. A smart colleague summed up his trading in December with the following statement, "The holiday markets giveth, then they taketh away...and then some."

    Volume on Monday was on the skimpy side as traders were still enjoying the holiday environment, but China essentially forced traders back to the markets. The Chinese government quietly implemented circuit breaker rules that forced the Chinese stock market to halt trading for two sessions in a row. In fact, today's session (which occurred last night for us) lasted only minutes before trade was halted.

    Failure of the Chinese government to allow the markets to properly react to market conditions triggered a global sell-off. At times like this it is important to remember that the Chinese stock market is in its infancy, and is being regulated by an entity that detests capitalism. Nevertheless, they seem to be learning that markets cannot be controlled. The circuit breakers will be bypassed on tonight's market open. In our opinion, this is a big step toward stabilization; after all, with circuit breakers in place buyers were not allowed to step in to cushion the fall.

  • Have we finally seen the low in the e-mini S&P 500 futures?

    the financial futures report financial futures trading newsletter

    It has been a busy day in the futures markets, so we will keep things short and sweet.

    I hope anybody watching their futures quote board today had a puke bucket sitting next to their desk. It is becoming difficult to stomach the massive volatility we are seeing in financial and commodity markets; except of course if you happened to catch a ride on the right side of the market. I can honestly say, very few are making money in this environment because it takes nerves of steel and plenty of risk capital to stick with a position long enough to enjoy the benefits. On the other hand, option sellers are having a difficult time managing runaway prices in both futures and options. With all of this said, we are likely near the end of the chaos, at least for now.

    There comes a point in these types of environments in which the speculators either run out of money, gumption, heart, or all of the above. When this happens pricing will get more reasonable in both the futures and the options markets, and volatility will collapse. If I was a gambler, I'd say that inflection point was either today, or at least in the coming session or two.

  • Ignore the death cross in the e-mini S&P future?

    the financial futures report

    Renewed concern over interest rate hikes has stock index futures reeling...or does it?

    Truth be told, the most recent drop in the S&P is a mere 50 handles, or 2.4%. Even if you measure from the April 20th high, the market has corrected a paltry 4%. In short, because this correction has been long and drawn out it seems much worse than it really is. Further, if the realization that Fed action is coming sooner rather than later is only good for a 50 point sell-off, we've come a long way since the "taper tantrum". You might recall the fiasco of 2013 which occurred when the financial markets were informed that money printing stimulus was coming to a conclusion. In our opinion, if the market was going to fall apart on the thought of another rate hike, it would have done it already.

     

  • Is a high consumer confidence reading pointing toward a stock market top?

    Futures Trading Newsletter

    Consumer Confidence at 125...are you kidding me?

    The Conference Board's Consumer Confidence index for the month of March was reported on Tuesday to be 125.6! If I recall, this index bottomed out near 20 as the stock market was making what we now know as a generational low in 2009. I started to type that the March reading was the highest I've ever seen, before noticing that it printed a 128.6 at the end of 2000. In all fairness, I was a clueless college student in 2000 so even if it happened, I probably didn't actually see it.

    The premise behind this index is that consumers are feeling emboldened by a positive view of business, labor market conditions, and the overall economy. On a side note, the survey responsible for this index was taken before the failure of the health care reform bill. Nevertheless, it is clear that consumers are feeling good and as a result, they are putting money to work in the stock market.

    If you look at a long-term chart of the Consumer Confidence index, it almost identically coincides with the direction of the stock market. With this in mind, there could be some red flags waving. In the past, we've seen major tops and bottoms in the stock market at times in which the Consumer Confidence index is at extreme highs and lows, respectively. Particularly readings in excess of 100.

    For instance, the last time the Consumer Confidence was this high in 2000, the S&P peaked dropping 50% over the next two years. Likewise, the Consumer Confidence was near 110 in 2007 just before the S&P fell 60% in the subsequent two years. Since the election, we've seen the Consumer Confidence index breach and hold above 100 for the first time since 2007 (and prior to that the early 2000s). Will this time be different?

    *It is only fair to note that the Consumer Confidence hovered above 100 in the mid-2000s for quite some time before the stock market rolled over and during that time stocks rallied nicely (until they didn't).

  • Is the e-mini S&P 500 futures market cracking?

    the financial futures report

    Trading volume continues to disappoint, and direction is lacking.

    Hopefully, most of you are still enjoying the summer vacation. We haven't seen this type of summer doldrum trade for quite a while. In fact, we've now gone 27 trading sessions without a 1% move in either direction. This hasn't happened since the summer of 2014 and is historically rare. It is hard to believe that earlier this year, the market was moving 1% up or down hourly and now it can't seem to do it in a trading session.

    The one thing I do know is this won't last. Investors and traders have grown complacent, and that is precisely the environment that breeds chaos. It isn't a matter of if, it is a matter of when volatility rears its ugly head.

    This isn't a notable news week, but the FOMC minutes released tomorrow afternoon could see a reaction.

  • Light trading volume in the ES, melt up

    the financial futures report

    Where did the ES futures volume go?

    At the time this newsletter was being written, volume in the December e-mini S&P was creeping up on the one million mark in contracts traded. This is dramatically lower than the 1.5 to 2.0 million we were starting to get used over the last three or four weeks of trading.

    Our theory is that many of the highly leveraged market participants have moved to the sidelines after a rough period of trading. Don't forget, bear markets lure traders to the futures markets like flies on "fertilizer". This is because most speculators believe there is quicker, and bigger, profits to be made during sell-offs than can be made during a bull market phase. Their assumption is true, but it also comes with elevated risks.

    The big sell-offs in August and September brought traders to the markets, but the October rally has likely chased them back into hiding (particularly the massive short squeeze seen on Thursday and Friday of last week).

    What does this mean going forward? Two things stick out in our minds; first, the e-mini S&P 500 bears will think twice about selling into a market that has burned them (twice). Second, if these traders stay sidelined and volume remains light, the path of least resistance will continue to be higher in the stock market (light volume tends to see melt-up type of trade).

  • Option Expiration and holiday rally could start next week

    the financial futures report

    Holiday futures markets are around the corner

    Perhaps the most valuable lesson I've learned in my decade (plus) time as a commodity broker is that holiday markets are not to be reckoned with. Volume is light and trading desks are filled with the second, and third, string staff. As a result, the markets can make dramatic and uncharacteristic moves. An example of this that still stings, is last year's Thanksgiving day crude oil futures collapse. The market was technically closed for the holiday, but the CME decided to let futures trade for an abbreviated session on the morning of Thanksgiving day. As a result of the light volume, and an ill-timed OPEC meeting, crude oil fell roughly $7.00 in single clip. In a nutshell, this is the time of year to keep trading light.

    In regards to the S&P and Treasuries, the holidays have an interesting influence on trade. Nearly every year (I'm not exaggerating), we see an end of the year melt-up. It is often a very slow moving grind, but it eventually adds up to a significant move.

    More pertinent to the current market; the week of Thanksgiving is statistically highly bullish. In fact, the Stock Trader's Almanac suggests that it might be a good idea to look for weakness prior to Thanksgiving to enter bullish trades, and strength after the holiday to exit. In fact, in the Dow, netting the day before and after Thanksgiving day has combined for only 13 losses in 62 years.

  • Parabolic ES Futures

    The Fed is as hawkish as they've been in years...

    A hotter than expected inflation reading and more confirmation from the Fed that they will be seeking at least three rate hikes this year set a negative tone for Treasuries. However, the same news was seen by stock trader as a sign of economic growth and prosperity. Accordingly, the seemingly never-ending stock market rally logged another session of buying. What can we say? This is a bull market...and nothing can derail it. In recent weeks we've seen chaos in Washington, riots in the streets of our cities, a North Korean missile headed for our shores, but we've yet to see investors interested in taking profits in the equity markets.

    If you ask me, the bulls are starting to get greedy (that said, we've obviously been wrong about the strength of this rally). According to our friends at Consensus, their bullish sentiment index has reached 76%. Generally speaking, this signifies an extreme that often results in a reversal. Likewise, The AAII Index suggests only 25% of those polled were bearish the market. The bus could be getting full...and we all know that that means.

     

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