Matt McKinney's Options & Futures Trading Strategies Blog

Direct: 312-277-0115  |  mmckinney@zaner.com

Matt Mckinney's Options & Futures Trading Strategies Blog is a blog dedicated to bringing updates, news and commentary on futures and commdity markets.

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Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  These recommendations are a solicitation for entering into derivatives transactions.  All known news and events have already been factored into the price of the underlying derivatives discussed.  From time to time persons affiliated with Zaner, or its associated companies, may have positions in recommended and other derivatives.


Grain Options Play: Corn Dribbles Lower, Beans Break Hard

Posted on 8/26/2016 8:29:26 PM by: Matt McKinney, Market Strategist @ Zaner. 312-277-0115.

Direct-312-277-0115, http://www.mmckinneyfutures.com/

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.

 

 

 

Grain Options Play: Corn Dribbles Lower, Beans Break Hard

While Key Support Was Taken Out In The Corn Some Time Ago, While Soybeans Just Made Another Leg Down Breaching Critical Support.

 

Fundamentally, with the Pro Farmer crop tour finished all indications point to a revision up in Soybean yields and down in Corn yields on the upcoming September USDA report. This caused Soybeans to get slammed this week, making yet another leg down. While Corn couldnt help itself and it closed at a new low close for the move as well.

This big move down in Soybeans this week caused my bullishness to waiver if only slightly. Yet I remain firm in my belief that the potential in the Corn and Soybean markets is to the upside and that currently we are looking at some of the lowest prices for Corn that we will ever see.

On the weather front it would appear that current forecasts of warm dry weather conditions in the Corn Belt are just what the crops need. But remember we still have September and harvest left and no crop is ever made until its in the bin.

With all of the bearish news smothering the Corn and Soybeans recently Im actually quite impressed with how these markets have held up. So for farmers who are pessimistic, discouraged, or just fed up I urge you to hang in there and keep it moving because if you can manage through this much brighter days are right around the corner.

 

For Our Zaner Daily Commentary:http://www.zaner.com/offers/?page=16&ap=mmckinne

 

Technically, I have added my favorite technical indicators to the charts below. I have coined them the "10/20/50/BB Trend Finder". They are the 10 (red line), 20 (green line), and the 50 (blue line) day Simple Moving Averages or SMAs. I have also added Bollinger Bands or BBs (light blue shaded area) and Candlesticks (the red and green bars with the candlestick wicks, and on this daily chart each bar represents one day of trading).

These few technical indicators can tell me many, many different characteristics about the market at a quick glance so I have them saved on my charts in MARKETHEAD, so they can populate on any chart I choose at the click of a mouse.

 

 

On the daily Corn chart above the market has made a new low close for the move and it looks to be retesting the previous low. In addition, the 10 day and 20 day SMAs are curling lower indicating a short term down trend and the BBs are both pointing sideways indicating a range bound market.

 

On the daily Soybean chart above, the market has made an abrupt change in trend as both the 10 day and the 20 day SMAs have been breached on the downside. The change in trend is not from up to down, but from up to no longer up.

 

I figured all this out by putting my "10/20/50/BB Trend Finder" on the chart above and applying these indicators to the charts at the click of a mouse which I found at: http://www.markethead.com/2.0/free_trial.asp?ap=mmckinne, which is a web application that we have developed for our clients called MARKETHEAD where I get about 70-80% of all my research from. That means I get both technical and fundamental research from this web app and I am a veteran series 3 Broker of 17 years. So if Im using it then maybe my readers should check it out. Yes?

 

 

Grain Options Play:

One potential strategy could be to buy Bull Call Spreads and in a 3 to 1 ratio a Put. For exact details on this strategy, months, expiration dates, strike prices, and number of positions feel free to contact me at 312-277-0115 or mmckinney@zaner.com.

 

CME Options On Futures: The Basics: http://www.zaner.com/offers/?page=9&ap=mmckinne

 

FREE QUOTE- "Experience has taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that your generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you dont make."

-Donald Trump

 

FUTURES, OPTIONS AND FOREX TRADING IS SPECULATIVE IN NATURE AND INVOLVES SUBSTANTIAL RISK OF LOSS. THESE RECOMMENDATIONS ARE A SOLICITATION FOR ENTERING INTO DERIVATIVES TRANSACTIONS. ALL KNOWN NEWS AND EVENTS HAVE ALREADY BEEN FACTORED INTO THE PRICE OF THE UNDERLYING DERIVATIVES DISCUSSED. FROM TIME TO TIME PERSONS AFFILIATED WITH ZANER, OR ITS ASSOCIATED COMPANIES, MAY HAVE POSITIONS IN RECOMMENDED AND OTHER DERIVATIVES.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERDLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STICKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT OPTIONS PRICES MAY ONLY MOVE A LITTLE.

THE LIMITED RISK CHARACTERISTIC OF OPTIONS REFERS TO LONG OPTIONS ONLY AND REFERS TO THE AMOUNT OF THE LOSS, WHICH IS DEFINED AS THE PREMIUM PAID ON THE OPTION(S) PLUS FEES.


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