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Announcements
Daniels Trading Welcomes First Guest Webinar Presenter
Our line-up of education-packed webinars continues to grow. This week we're very excited to welcome special guest presenter, T. Henning Murrey of Murrey Math. Don't miss his presentation, "Trading the S&P 500 Futures Off the Spread of the New Contract and the VIX Index."
We look forward to seeing you and encourage you to attend as many events as you'd like. Sign up today to reserve your spot!
Explore dt's Webinar Archives
Did you miss a webinar you registered for? Or, do you simply want to see topics we've covered in the past? No problem! Navigate your way through our webinar archives and register for immediate access to the recordings.
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Markets to Watch
Bond Strategies
In hindsight the US Federal Reserve and the US Treasury Department seem to have done a masterful job in distributing the avalanche of supply from historic deficit spending. In fact, Treasury prices seem to be getting a lift in the wake of periodic auctions, but that is probably largely a function of the lack of attractive alternative investments. We do think that US Treasury auctions have been benefiting from an "invisible hand" which could take the form of direct buys by the US government that are later distributed into the market in smaller increments. It is also possible that the US is soliciting the help of foreign entities, many of which have a vested interest in preventing a US debacle.
However, we also think that the need to support the auctions will become less critical as the US government and US financial institutions get a grip on the trouble spots. We also think that a certain amount of Treasury buying interest is the result of lingering concerns of a failed recovery. In fact, the Chinese recently suggested that their ongoing interest in US Treasuries was economically based and not politically based. In other words, the Chinese were looking for a certain yield and the US Treasuries are providing that return. However, as the prospect of recovery improves it could increase the attractiveness of alternative investments and in turn pull money away from Treasuries. In our opinion the US will be able to keep certain interest rates down but that all rates won't be held down once there is positive economic momentum. While it might be considered anecdotal evidence, it was noted recently that Miami condo sales showed a significant jump, which in turn prompted some real estate analysts to suggest that the excess supply in that area could be worked off in a couple of years. For most of the last two years there have been very few real estate experts who would hazard a specific time for a recovery in Florida real estate.
Nonetheless, as we mentioned in the Commodity Outlook, we suspect that the next US Non Farm payroll report might show a better than expected reading, and that in turn could leave US Treasuries vulnerable to a compacted correction. With June bonds last week reaching their highest level since early December, it would seem like the Treasury market is at least partially factoring in a failure to recover or at least a much longer and slower recovery than one might have expected at the beginning of the year. Certainly evidence that inflation remains low was cause for some of the gains last week, but we challenge the bulls to feel good about their positions going into the next Nonfarm Payroll reading, especially if June bonds are priced above the 118-00 level! A good reading, rapidly rising energy and base metals prices and confidence in a global recovery
could easily set the stage for an April slide in bond prices of 4 points!
If you'd like to receive daily information on bond trading strategies, click here.
Suggested Trading Strategy:
- Sell 1 June bond at 118-10 limit, with an objective of 114-31. Risk the trade to a close above 119-09.
That translates to a risk of $968.75.
And a target of $3,343.75.
The Risk/Reward relationship is roughly 3.5 to 1.
- Buy a September Bond 114 put for 1-20 limit, with an objective of 4-20. That translates to a reward of $3,343.75 dollars before its trade cost.
Risk the position to a close below 0-35. A risk of $765.625.
The Risk/Reward relationship is roughly 4-to-1 on the Option play.
Previous Trading Strategy Recap:
Regarding last edition's trade suggestions, we were stopped out of our Sugar Option trade for a loss of $280 plus transaction cost.
If you'd like to further discuss these strategies to determine the best execution strategy for you, contact us.
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Industry News
Equity and Physical Commodity Prices On the Rise?
Over the last month equity and many physical commodity prices have managed to rise consistently without much in the way of classic fundamental justification.
On the contrary, if one were looking at the regularly scheduled economic data from the US, one might come to the conclusion that recent gains in equities and commodities were actually made in the face of signs that the recovery was less than robust. However, looking to the market action on March 16th and 17th there would seem to be views that the pace of the global recovery was capable of supporting a host of physical commodity markets. In fact, on March 16th the market was confronted with declines in US Housing Starts and Permits figures, yet equities, copper and energies all seemed to catch a broad-based wave of buying.
From our perspective, the sharp gains forged on March 16-17 were the result of upbeat, anecdotal "global" demand expectations. Certainly a downside breakout in the Dollar provided many commodity markets with a lift, but it did seem as if predictions of strengthening energy prices worldwide gave the markets confidence that economic growth would eventually gain (and sustain) a foothold. Yet another "on-hold" decision by the US Federal Reserve provided an added burst of optimism, but we have to wonder if the promise to hold rates down, even in the face of recovery, isn't beginning to foster premature inflation.
In looking ahead, we acknowledge the supply side burden that is hanging around the neck of the grain markets, but we are also confident that 6 to 12 months down the road the markets will have found a home for much of that supply. If trade sources are correct in their assumption that grain prices will fall sharply once a certain amount of corn planting is achieved, it could prompt a rebuilding of livestock herds, which in turn should boost feed demand in coming quarters. Furthermore, with oil prices managing to threaten the $85 per barrel level with one economic hand tied behind their back, we think that oil pricing above $90 per barrel could be seen at some point in the coming summer. If oil prices rise above $90 per barrel, it would likely prompt calls for Washington to do something about it, and that "something" might be to raise the ethanol mandate to 15%. So while grains might be a burden to overall commodity prices in the coming weeks, a decline in grain prices provide a key bottom to the market.
With a major financial firm suggesting that the February US Payrolls were likely held down significantly because of a long string of severe US weather in February, we have to think that many physical commodity markets will continue to buy the rumor of a positive US March payroll reading. In fact, one financially based international research entity recently suggested that a similar blizzard in 1996 might have impacted up to 1,000,000 US jobs. While we doubt that type of impact will seen off the February 2010 storms, it is possible that the markets are set up to see a payroll report that would result in a temporary recovery - euphoria event. Unfortunately for the equity markets, it is possible that a favorable payroll reading will result in a noted correction in equities off the fear that a positive jobs reading will cause the US Fed to come off the bench.
In our opinion, many commodity markets will be able to extend their upward track in the coming months, especially if a weak Dollar continues to provide a
favorable environment.
Keep a pulse on the industry and access more industry news.
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| In This Issue |
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| Trading Tip |
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Don’t just trade the volatile contracts.
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| Did You Know... |
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Daniels Trading offers Strategy Exchange, a database of trading systems providing system analysis tools to help you narrow your search and build a diversified portfolio of automated trading strategies.
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| Follow us |
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Get Your Complimentary Anatomy of Automated System Execution Guide!
No Time? No Experience? No Problem!
Automated system trading is a hands free approach to participating in the futures markets.
It is ideal for you if you:
- Have an interest in diversifying your portfolio
- Lack the time to effectively follow the markets
- Are new to commodity futures trading
- Wish to defer your trading decisions to a tested automated futures trading system
In it, you’ll receive valuable insights including:
- Information on the importance of asset diversification in today’s financial markets
- Experience fast and reliable execution
- How to develop your alternative investment strategy
- Tips to selecting the right trading systems for you and building a system portfolio
- Useful resources for further research
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Featured Video
Long on value. Short on cost.
Click here or anywhere on the video image below to launch the "Self-Directed Online Execution" video page on the Daniels Trading web site.
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Upcoming Webinars
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PRESENTER |
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EVENT |
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Brian Cullen |
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Technical Analysis SIMPLIFIED - Learn the Basics of Chart Analysis |
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Mon, 03/22 |
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02:00 PM CST |
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Discover the basics of technical analysis during this highly informative webinar. Learn common chart patterns and the market moves they predict. You'll gain comfort and confidence while learning how to identify key patterns and how to trade them. |
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Kurt Pfafflin |
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dt Pro 201 - Intermediate Order Entry, DOM & Chart Execution Techniques |
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Tue, 03/23 |
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03:30 PM CST |
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Maximize your trading potential by harnessing the power of our flagship dt Pro platform. You'll trade with ease and increased confidence as you learn powerful order entry and position management tactics.
Bracket orders, trailing stops, OCOs and many others will be covered. |
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Nick Metzger |
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Futures Options Basics - Easily learn the basics of futures options using real-world examples and simplified terminology. |
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Tue, 03/23 |
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02:00 PM CST |
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Caution - this webinar may teach you about options without dry lectures or confusing terminology! Options can be a great trading tool and often present many opportunities, but far too often traders avoid them because of a lack of knowledge and comfort. We're aiming high and want to help you to learn about options without putting you to sleep! We'll start by learning about the benefits of options. Then, by using real-world examples and simplified terminology, we'll begin to cover the basics of options and how even beginning traders can use them to create powerful trading strategies.
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Andy Bulawa |
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Using the Fibonacci Suite on dt Pro - Retracements, Arcs, Fans and Fib Bollinger Bands |
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Tue, 03/23 |
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04:30 PM CST |
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Fibonacci tools are some of the most popular technical indicators used by savvy traders. dt Pro is our flagship trading platform offering integrated execution and powerful technical analytics. Now you can get the best of both worlds by combining the two using our "Fibonacci Suite" on dt Pro. Learn about the key Fibonacci tools which are integrated into our dt Pro trading platform and how to use them. This webinar is a must attend for anyone using dt Pro or is interested in developing their technical trading toolbox. |
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Matt Vitiello |
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dt Pro 101 - Get Started with Our Flagship Trading Platform |
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Tue, 03/23 |
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01:00 PM CST |
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During this webinar we'll show you everything you need to know to get on the fast track using dt Pro, our flagship trading platform. Giving you direct market access, dt Pro provides everything you need to trade with speed, transparency and powerful indicators. |
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Brian Cullen |
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Technical Analysis SIMPLIFIED: INDICATORS- EMAs, RSI, MACD, OSC and Fibonacci |
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Wed, 03/24 |
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01:30 PM CST |
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Join us as we take a look at some of the most popular chart indicators. We will look at Moving Averages, Oscillators, MACD, Relative Strength Index and Fibonacci. After this presentation, you will understand these important indicators and how to use them. |
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Craig Turner |
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Futures for Stock Option Traders - Discover a Better Way to Trade |
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Wed, 03/24 |
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03:30 PM CST |
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Many stock option traders evolve into futures traders. Why? They've discovered that futures offer a world of possibilities unattainable in the equity markets: Discover better leverage. Trade with increased efficiency. Eliminate time decay. Take the next step by attending our webinar and learn how futures can benefit your trading. |
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T.Henning Murrey |
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Trading the S&P 500 Futures Off the Spread of the New Contract and the VIX Index |
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Wed, 03/24 |
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01:30 PM CST |
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Every thirteen weeks the futures market changes contracts out into the future. See what is built into the spread between these contract months. Let T. Henning Murrey of Murrey Math Trading Software show you how the spread is set to Murrey Math lines. See how to trade the futures spread between the cash market and how to use the VIX Index as an indicator. |
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Burton Schlichter |
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Capture the Move! A predictive not descriptive look at today's market. |
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Thu, 03/25 |
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02:30 PM CST |
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Look over the shoulder of Burton Schlichter, an experienced dt broker and author of the "Capture the Move" newsletter, which is exclusive to Daniels Trading clients. He will use his trading experience to identify opportunities in today's markets and share with you his formula for trading! Join the others who have "Captured the Move" and allow yourself to become an active trader while still maintaining a busy life. |
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Brian Cullen |
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Technical Analysis SIMPLIFIED: Chart Patterns - Triangles, Flags & Wedges |
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Thu, 03/25 |
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01:30 PM CST |
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Our "Technical Analysis SIMPLIFIED" series continues with this insightful summary of common chart patterns that can help to identify major breakouts, reversals and trends. Gain comfort and confidence as charts transform from random to identifiable patterns. You'll learn to anticipate moves in advance allowing you to take decisive action once key triggers are confirmed. |
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Andy Bulawa |
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3 Simple Methods for Entering the Market with Technicals |
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Thu, 03/25 |
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04:30 PM CST |
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Well-timed trading entries are critical to successful trading, yet many traders struggle in this area. Attend this webinar and you'll learn 3 simple methods for entering the market with technicals. Discover entry methods for both long and short positions. Lastly, you'll understand how to interpret the methods to know when to stay out of a position. All of the indicators you'll learn are available with our flagship trading platform, dt Pro, so you'll be able to apply them immediately or test them through a demo. |
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Scott Hoffman |
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Breakout Trading Insights |
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Thu, 03/25 |
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03:30 PM CST |
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Register for this Live Web Event and watch Scott Hoffman review and forecast the futures markets using his proprietary “Trade!” or “Fade!” method! You’ll learn the patterns Scott uses to identify breakout setups in the futures markets. This helps you home in on markets with the potential for explosive moves. You’ll also learn how and where to trade these setups to help minimize risk and maximize returns. You’ll see trade examples from recent market activity, and maybe see a setup candidate or two for the following trading session! Sign up for this free hour long seminar and learn how to apply the Trade or Fade methodology to your trading. |
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Drew Wilkins |
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Discover our dt Insider Market Advisory: Your resource for daily market knowledge and trading confidence. |
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Fri, 03/26 |
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02:00 PM CST |
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Discover how to get the most from our insider's view every day. Learn how to access our dt Insider Market Advisory (IMA). View IMA samples and learn how each issue can fast track you to an insider's view of the market. Get fundamental and technical summaries to help guide your decisions, or follow along with our direct trading recommendations.
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About Daniels Trading
Daniels Trading is a relationship-focused commodity futures brokerage located in the heart of Chicago's financial district. Founded in 1995, we have a history of providing effective and reliable trade executions to both individual traders and institutional investors around the globe. In addition to our focus on relationship and execution, Daniels Trading is a leader in providing ongoing education opportunities and resources for our customers.
Watch our "About Us" video.
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