Cotton’s Move
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Futures and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading .40 points higher and the bond market is trading up 2 ticks.
March Cotton [CTH0>CTH0], mentioned last night as being on the Volatility Explosions List, had its largest 1-day move in weeks today as volatility began to revert back to its mean. This is why it pays to watch commodities that are on these lists.
Tonight we have 4 indicators pointing higher on the Market Bias Page. Look for buying opportunities in the March NASDAQ 100 [NDH0>NDH0], Dow Jones [DJH0>DJH0] and S&P [SPH0>SPH0] futures. Just use caution as tomorrow is a triple witching.
January Soybeans [SF0>SF0], on the Pullbacks Off Lows List, has formed a three-bar pullback from lows and closed poorly (a). March Corn [CH0>CH0] and Wheat [WH0>WH0] are similar patterns. Look for shorting opportunities here.
Volatility Watch
March Silver [SIH0>SIH0] remains on two of the Volatility Explosions Lists. Continue to watch for a larger-than-normal move (in either direction) as volatility reverts to its mean.
In my experience, gold can go for quite some time before making a large move. With that said, February Gold [GCG0>GCG0] is now on the Volatility Explosions-Multiple Days List. Watch this one going forward for a larger-than-normal move (in either direction) as volatility reverts to its mean.
Best of luck with your trading on Friday!
PS-Reminder: Protective stops on every trade!