This is a sample entry from Don DeBartolo’s email newsletter, Trade Spotlight: Spreads, published on Wednesday, July 19, 2017.
There is a futures spread trade opportunity in Crude Oil. Shorting the spread on a break of a pivot point low and Trend Line. The stop loss will be placed above the recent resistance level. The target is the spread low from mid-August 2015. See chart below. There is a seasonal tendency for this spread to sell-off during this time period. The MACD indicator is flat at the moment, but the Stochastic indicator shows bearish momentum.
Establishing a bearish position where a front month contract is sold and a deferred month contract is purchased. Anticipating the spread to widen negatively. Setting up a futures spread will potentially reduce the risk and volatility in this energy market, as well as reducing the margin requirement.
Sell the September 2017 / Buy the December 2017 Crude Oil spread at -.70 using a stop order, GTC.
Initial Margin = $292 Maintenance Margin = $265
If filled:
Stop loss: Stop loss is -.49 points, above the resistance level, GTC. ($210)
Target: Target is -1.18, the spread low (12/14/15), GTC. ($480)
Crude Oil Spread Chart from Bar Chart
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