Daily Morning Report

Monday, November 8–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. The U.S. indexes hit record highs last Friday. There remains little risk aversion in the global marketplace at present. The U.S. House of Representatives late Friday approved a pared-down U.S. government spending plan.

In other weekend news, China reported its October imports were up 20.6%, year-on-year, which was less than expected. However, China’s exports in the period were higher than expected, at up 27.1%.

China’s Communist Party has begun a four-day meeting at which President Xi Jinping is expected to make a move to extend his rule indefinitely. Xi wants to extend his ambitious plans for the domestic economy and its global economic and geopolitical power.

The key outside markets today see the U.S. dollar index slightly lower after hitting a new high for the year last Friday. Nymex crude oil prices are higher and trading around $82.50 a barrel. The oil market bulls have become wobbly. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.481%. 

U.S. economic data due for release Monday is light and includes the employment trends index.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and not far below Friday’s record high. Bulls have the solid overall near-term technical advantage as prices are trending up. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the contract and record high of 4,711.25 and then at 4,750.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Friday’s low of 4,667.50 and then at 4,650.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0

December Nasdaq index futures: Prices are a bit firmer in early U.S. trading. Prices Friday hit a record high. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the  contract and record high of 16,448.50 and then at 16,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 16,129.50 and then at and then at 16,000.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are lower in early U.S. trading on a downside correction after Friday’s big spike higher. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 162 24/32 and then at last week’s high of 163 4/32. Buy stops likely reside just above those levels. Shorter-term support lies at 162 even and then at 161 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

December U.S. T-Notes: Prices are lower in early U.S. trading on a corrective pullback after last Friday’s solid gains. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance is seen at the overnight high of 131.25.5 and then at last week’s high of 131.30.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.10.0 and then at 131.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The December Euro currency futures are a bit higher in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.1600 and then at last week’s high of 1.1625. Buy stops likely reside just above those levels. Shorter-term support is seen at last week’s low of 1.1520 and then at 1.1500. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Nymex crude oil prices are higher in early U.S. trading. Bulls have the near-term technical advantage but have become wobbly recently. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the $83.50 and then at $84.00. Look for sell stops just below technical support at the overnight low of $81.05 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures were steady to firmer overnight. Corn and wheat bulls still have the technical advantage. Soybean bears are in command. On tap today is the weekly USDA export inspections report. Tuesday’s monthly USDA supply and demand report is in focus. That report is expected to favor the bearish camp—especially in soybeans.

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

Jim Wyckoff

Friday, November 5–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to slightly higher openings when the New York day session begins. The U.S. indexes hit record highs again overnight. Traders and investors are generally in upbeat moods at present, as U.S. corporate earnings reports have been very positive. Risk appetite got another boost Friday morning when Pfizer reported its Covid-19 pill as 89% effective in reducing hospitalization and death.

Traders are awaiting Friday morning’s important U.S. employment situation report for October. The key non-farm payrolls component of that report is expected to show a rise of 450,000 compared to a gain of 194,000 in the September report. The U.S. unemployment rate is seen at 4.7% versus 4.8% in the September report. The average hourly earnings component will be closely watched for inflation clues, and it’s seen up 4.9%, year-on-year, compared to up 4.58% in the September report.

The key outside markets today see the U.S. dollar index higher and near the high for the year. Nymex crude oil prices are higher and trading around $79.65 a barrel. The oil market bulls have become wobbly this week. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.532%. 

Other U.S. economic data due for release Friday includes consumer credit.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and hit another record high overnight. Bulls have the solid overall near-term technical advantage as prices are trending up. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the contract and record high of 4,686.00 and then at 4,700.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Thursday’s low of 4,650.75 and then at 4,613.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0

December Nasdaq index futures: Prices are up in early U.S. trading and hit another record high overnight. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight record high of 16,423.75 and then at 16,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Thursday’s low of 16,129.50 and then at and then at 16,000.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 161 16/32 and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 160 22/32 and then at 160 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

December U.S. T-Notes: Prices are a bit weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance is seen at this week’s high of 131.14.0 and then at 131.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.00.0 and then at 130.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

EURO CURRENCY

The December Euro currency futures are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at 1.1600 and then at this week’s high of 1.1625. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1535 and then at 1.1500. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Nymex crude oil prices are higher in early U.S. trading, after Thursday’s sell off. Bulls still have the near-term technical advantage but have become wobbly this week. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $80.17 and then at $81.00. Look for sell stops just below technical support at this week’s low of $78.25 and then at $77.50. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

U.S. grain futures were mixed to firmer overnight. Not much new this week. Corn and wheat bulls still have the technical advantage. Soybean bears are in command. Next week’s (Tuesday) monthly USDA supply and demand report is coming into focus. That report is expected to favor the bearish camp—especially in soybeans.

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

Jim Wyckoff

Thursday, November 4–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed to mostly firmer in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. The U.S. indexes hit record highs overnight.

The market place is still digesting the Federal Reserve’s Open Market Committee (FOMC) meeting that ended Wednesday afternoon. The Fed announced its tapering of monthly bond buying, as expected. It’s also expected the tapering will wind down next summer. There were no big surprises in the FOMC statement or Fed Chair Powell’s press conference, which suggested the marketplace had pretty well dialed in the outcome. Powell did suggest that U.S. interest rate hikes do not necessarily have to come after tapering winds down–and that leaned a little dovish and may have helped lift gold prices off their daily lows Wednesday.

On tap Thursday is the regular monetary policy meeting of the Bank of England. The BOE has hinted recently that its monetary policy will also start to tighten due to inflationary pressures.

Speaking of inflation, it’s running hotter in the Euro zone. The zone’s September producer price index was reported up 2.7% from August and up a whopping 16.0%, year-on-year.

Traders are awaiting Friday’s important U.S. employment situation report for October. The key non-farm payrolls component of that report is expected to rise 450,000 compared to a rise of 194,000 in the September report.

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are higher and trading around $82.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.574%. 

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade report, preliminary productivity and costs, the global services PMI, and the monthly U.S. chain store sales index.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and hit another record high overnight. Bulls have the solid overall near-term technical advantage as prices are trending up. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the contract and record high of 4,662.00 and then at 4,700.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Wednesday’s low of 4,613.00 and then at this week’s low of 4,586.50. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0

December Nasdaq index futures: Prices are up in early U.S. trading and hit another record high overnight. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight record high of 16,216.00 and then at 16,300.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Wednesday’s low of 15,935.25 and then at and then at this week’s low of 15,768.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 161 even and then at this week’s high of 161 14/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 159 18/32 and then at 159 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

December U.S. T-Notes: Prices are a bit higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance is seen at 131.00.0 and then at this week’s high of 131.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.18.0 and then at this week’s low of 130.12.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The December Euro currency futures are solidly lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at 1.1600 and then at this week’s high of 1.1625. Buy stops likely reside just above those levels. Shorter-term support is seen at the October low of 1.1537 and then at 1.1500. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Nymex crude oil prices are higher in early U.S. trading. Bulls still have the near-term technical advantage but have become wobbly this week. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at Wednesday’s high of $83.08 and then at $84.00. Look for sell stops just below technical support at $81.00 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures were mixed to firmer overnight. On tap today is the weekly USDA export sales report. Corn and wheat bulls still have the technical advantage. Soybeans continue to struggle.

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

Jim Wyckoff

Wednesday, November 3–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed to weaker in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. The U.S. indexes hit record highs on Tuesday.

The Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning ends Wednesday afternoon with a statement and press conference from Fed Chairman Jay Powell. Most Fed watchers believe the U.S. central bank will announce the timing of tapering of its monthly bond purchases. An immediate reduction of $15 billion per month of bond purchases is being bandied about the marketplace. No changes in U.S. interest rates are expected, but market watchers will parse the Fed’s comments for clues on the timing of future rate increases.

On Friday the U.S. employment situation report for October is due. The key non-farm payrolls component of that report is expected to rise 450,000 compared to a rise of 194,000 in the September report.

Reports say more provinces in China are fighting coronavirus outbreaks than at any time since Covid-19 emerged in Wuhan province in 2019. China officials are warning that new Covid lockdowns in China are likely to dent economic growth.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are sharply lower and trading around $82.00 a barrel. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.553%. 

It’s a busy day of U.S. economic data released Wednesday, including the weekly MBA mortgage applications survey, the ADP national employment report, the Treasury quarterly refunding announcement, the U.S. services PMI, the ISM report on business services, manufacturers’ shipments and inventories and the weekly DOE liquid energy stocks report.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are near slightly down in early U.S. trading. Bulls have the solid overall near-term technical advantage as prices are trending up. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Tuesday’s contract and record high of 4,627.00 and then at 4,650.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,586.50 and then at 4,550.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5

December Nasdaq index futures: Prices are slightly up in early U.S. trading and poked to a record high overnight. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight record high of 15,987.25 and then at 16,100.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 15,768.50 and then at 15,595.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

December U.S. T-Bonds: Prices are higher in early U.S. trading and hit a five-week high overnight. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 161 14/32 and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 160 17/32 and then at 160 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

December U.S. T-Notes: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance is seen at 131.07.0 and then at 131.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.27.5 and then at 130.20.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The December Euro currency futures are slightly up in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.1650 and then at 1.1680. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1555 and then at the October low of 1.1537. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Nymex crude oil prices are sharply lower in early U.S. trading. Bulls still have the near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $83.08 and then at $84.00. Look for sell stops just below technical support at the overnight low of $81.91 and then at $81.00. Wyckoff’s Intra-Day Market Rating: 3.5

GRAINS

U.S. grain futures were mixed to weaker overnight. Not much new at mid-week. Corn and wheat bulls have the technical advantage to suggest more gains in the near term. Soybeans continue to struggle. It’s not likely that soybeans will continue to trend in an inverse fashion to corn and wheat. Corn and soybean harvest in the U.S. is winding down and focus in the coming months will be on South American corn and soybean growing conditions, and global demand.

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

Jim Wyckoff