April 28, 2010 - Issue #530

In This Issue

1. Follow the Crude Oil Futures Market
2. Cotton Outlook by LEVEX Capital Management
3. Economic Calendar

1. Follow the Crude Oil Futures Market

Are you thinking about trading crude oil futures? Or already involved in the market?

We've created a new page where you can get historical information, quotes, and breaking news on crude oil: the Crude Oil Futures page.

Bookmark this page today as you may find it helpful in your futures trading.

Good Trading!

2. Cotton Outlook by LEVEX Capital Management

courtesy of the LEVEX Capital Management Options Newsletter

The daily chart below is of the cotton futures market.

Click the image to enlarge. Click the "x" or press ESC to close.

Applying a few technical indicators along with Elliott Wave analysis suggests a picture of a strong market that may be nearing the end of its recent uptrend. Of course, the answer is unknown and only time can tell.

Using some overbought / oversold indicators, we see the possibility of market pull back. Possible lines of retracement are drawn on the chart using Fibonacci tools.

In order not to try and predict or fish for a top in this case, we are waiting for confirmation of a stronger pull back by observing price action and, in this specific case, a break of first short term support at 82.70.

If price action takes out this support level, it may present a set up for either an outright put option or a put spread combination. If you would like to get an update along with an option trade idea if and when this happens, you can sign up for a free 45 day trial to LEVEX Options newsletter.

Levex Capital Management Inc. publishes an options newsletterwhich provides medium-term (a few days to a few weeks) trade ideas using options and based mostly on technical analysis and its proprietary "Diamond" algorithm.

THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. IN CONSIDERING WHETHER TO TRADE OR TO AUTHORIZE SOMEONE ELSE TO TRADE FOR YOU, YOU SHOULD BE AWARE OF THE FOLLOWING: IF YOU PURCHASE A COMMODITY OPTION, YOU MAY SUSTAIN A TOTAL LOSS OF THE PREMIUM AND OF ALL TRANSACTION COSTS. IF YOU PURCHASE OR SELL A COMMODITY FUTURE OR SELL A COMMODITY OPTION, YOU MAY SUSTAIN A TOTAL LOSS OF THE INITIAL MARGIN FUNDS AS WELL AS FUNDS IN EXCESS OF YOUR ORIGINAL DEPOSIT.. IF THE MARKET MOVES AGAINST YOUR POSITION, YOU MAY BE CALLED UPON BY YOUR BROKER TO DEPOSIT A SUBSTANTIAL AMOUNT OF ADDITIONAL MARGIN FUNDS, ON SHORT NOTICE, IN ORDER TO MAINTAIN YOUR POSITION. IF YOU DO NOT PROVIDE THE REQUESTED FUNDS WITHIN THE PRESCRIBED TIME, YOUR POSITION MAY BE LIQUIDATED AT A LOSS, AND YOU WILL BE LIABLE FOR ANY RESULTING DEFICIT IN YOUR ACCOUNT. UNDER CERTAIN MARKET CONDITIONS, YOU MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE A POSITION. THIS CAN OCCUR, FOR EXAMPLE, WHEN THE MARKET MAKES A "LIMIT MOVE." THE PLACEMENT OF CONTINGENT ORDERS BY YOU OR YOUR BROKER, SUCH AS A "STOP-LOSS" OR "STOP-LIMIT" ORDER, WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS. A "SPREAD" POSITION MAY NOT BE LESS RISKY THAN A SIMPLE "LONG" OR "SHORT" POSITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ASPECTS OF THE COMMODITY MARKETS. YOU SHOULD THEREFORE CAREFULLY CONSIDER IF COMMODITY TRADING IS SUITABLE FOR YOU BEFORE YOU TRADE.

3. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** 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!