Futures Market Update 2012-10-17: US Dollar Index, Sugar, Natural Gas Futures

I'd like to mention some of the things in the futures market I've got my eye on for the immediate future. There are three; The US dollar index futures, sugar futures, and natural gas futures.

Previous Trade in Gas

Before I begin with that, I have already exited my previous natural gas short position. I took 8 points out of the market, a satisfactory profit. I exited because I saw that MACD was not keeping up with new lows, and the EIA storage report expectations seem like they are more on the bullish side. Conclusion, I decided to take my profits.

Natural Gas Futures

Seeing as how I'm on natural gas, I'll talk about that futures market first. All comments refer to a 60 minute chart. It seems like there is an opportunity developing to go long in gas. The best point to enter would have been this morning around quarter to 7 (my time), as there was an MACD divergence that became apparent. However, I did not enter because I was asleep. Oh well, I really don't like chasing trades. However, seeing as how the EIA report is tomorrow, we may see a re-occurrence of the MACD divergence early tomorrow morning before the report. Even if we don't see that occur, there is a pretty good chance a swing opportunity will present itself if price move near or below the moving average.

The factors I am considering when deciding whether or not to go long this market in the very near future are the impending EIA storage report that can cause volatility, the MACD divergence that occurred this morning, and the potential upside. I think the EIA report and the MACD divergence would both be in my favor to go long. However, I am skeptical about the upside potential in natural gas at this moment. Another factor is that I am still trading e-miNY contracts in gas. So even if there is a good move, the profit potential would be smaller than the potential if I catch a good move in sugar or the dollar index. Overall, this trade is my 3rd favorite at this time. That my change tomorrow morning.

US Dollar Index

Regarding the US dollar index futures market, I am seeing a potential strong MACD divergence forming in the 60 minute charts. The daily charts are showing that we are seeing prices in the low end of its recent history. I am very optimistic about seeing some type of upward dynamic here, even if it is short lived. I do not have a trade going on here at this moment, but I am strongly considering one. If I do put on a trade, chances are it will be tomorrow morning. This trade is my 2nd favorite trade of the three I am considering right now.

Sugar Futures

Regarding the sugar futures market, I am suddenly quite bullish here. We have seen a fairly sharp decline over the past week or two. I commented in my last post that I was very tempted to buy into an MACD divergence, and than I might regret not doing so. Well, I kind of regret not having bought it. I am seeing an MACD divergence on the 60 minute charts that has occurred in the last couple of days. Now, prices are hugging the moving average I have set. The daily charts are strange, but they could show the MACD ticking up next session. They also show that we are in the bottom area of recent price history. We saw a good MACD divergence develop about a month ago on the daily charts. So I am left wondering if that movement has completed, or if there is still some juice there and what we are only in a temporary correction right now. When I think about this trade, I get pretty excited. This is one trade that gets my instincts riled up. This trade is my favorite, as of this moment, of the three I am considering. I am still thinking about whether I want to buy at the market when the session opens in the middle of the night, or if I want to wait until morning to see what it looks like.

Conclusion

I've got three trades that I feel quite strongly about. You may ask yourself, "Why don't you just trade all three?". The answer is that I just don't want to. If I did, I wouldn't have time to sleep because I'd be up monitoring the different markets at different times of the day. When miss out on sleep, I start making poor decisions and that can cost me money. I would rather just focus on one trade that I feel the best about. Also, I think that sugar has the highest upside potential at this specific time. Although, I might be able to debate against that if I was trading full sized gas contracts, which I am not.

Other Futures Market Thoughts

In other markets, I am still looking for gold prices to make more lows so that I can position myself long for a long haul hold. I feel like this situation is developing in my favor, slowly but steadily.

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