Daily Morning Report

Tuesday, March 2–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly down overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins, after strong gains posted Monday. Government bond yields generally pulled back a bit Monday, which assuaged stock market traders for the moment. However, Asian markets were rattled overnight when a top banking official in China said the U.S. and other stock markets were in bubbles that are bound to eventually correct. The U.S. Treasury 10-year note is presently trading around 1.445% for its yield. Many veteran market watchers believe U.S. Treasury yields will continue to climb in the coming months.

In other overnight news, the Euro zone consumer price index for February came in at up 0.9% compared to a 0.9% gain in January. Once again, inflation data coming from a major global economy is nowhere near suggesting problematic price inflation down the road. However, inflation data later this year will probably be more indicative, if any major economies are indeed starting to run too hot.

The key “outside markets” today see Nymex crude oil futures prices near steady and trading around $60.65 a barrel. There is an OPEC meeting on Thursday that the marketplace will closely monitor. The U.S. dollar index is a bit higher early today.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the ISM New York report on business, the IDB/TIPP economic optimism index, and domestic auto industry sales.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices a bit weaker in early U.S. trading after Monday’s solid gains. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Monday’s high of 3,901.75 and then at last week’s high of 3,924.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,856.50 and then at 3,825.00. Wyckoff’s Intra-day Market Rating: 4.5

June Nasdaq index futures: Prices are weaker in early U.S. trading after good gains seen Monday. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 13,316.75 and then at 13,400.00. On the downside, shorter-term support is seen at the overnight low of 13,152.50 and then at 13,000.00. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 160 1/32 and then at this week’s high of 160 26/32. Shorter-term support lies at 158 16/32 and then at 158 even. Wyckoff’s Intra-Day Market Rating: 4.0

June U.S. T-Notes: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 133.17.0 and then at 133.24.0. Shorter-term technical support lies at this week’s low of 133.00.0 and then at 132.28.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

EURO CURRENCY

The June Euro currency futures are lower and hit a four-week low in early U.S. trading. Bulls have lost their overall near-term technical advantage as a price uptrend on the daily chart has been negated. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below with the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2077 and then at 1.2100. Shorter-term support is seen at the overnight low of 1.2019 and then at 1.2000. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

April Nymex crude oil prices are near steady in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend in place on the daily chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $61.00 and then at $62.00. Look for sell stops just below technical support at the overnight low of $59.45 and then at $59.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

U.S. grain futures are mixed to lower in early U.S. pre-market trading. Not much new. Markets may be quieter up until the late-March USDA planting intentions report, which is one of the most important grain market reports of the year. Grain market bulls still have the firm overall near-term technical advantage as prices are mostly trending up—both on a near-term and longer-term basis.

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

Monday, March 1–Jim Wyckoff’s Morning Markets Report

Global stock markets were higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Global bond market yields have down-ticked a bit to start the trading week, which has given some buoyancy to the stock markets that got hit last week when the U.S. 10-year Treasury yield moved above 1.6% to a one-year high. The U.S. 10-year on Monday is currently fetching 1.445%.

President Biden’s $1.9 trillion U.S. stimulus bill was passed by the House of Representatives on Saturday and now moves to the Senate. With some unemployment support measures running out in two weeks, the focus for lawmakers is on getting the bill passed through the Senate and ready for Biden’s signature as quickly as possible. 

In overnight news, the Euro zone February manufacturing purchasing managers index (PMI) came in at 57.9 versus 54.8 in January. Meantime, China’s private survey Caixin PMI came in at 50.9 in February from 51.5 in January. A reading above 50.0 suggests growth in the sector. U.S. PMI numbers are out this morning.

The key “outside markets” today see Nymex crude oil futures prices higher and trading around $62.25 a barrel. There is an OPEC meeting on Thursday that the marketplace will closely monitor. The U.S. dollar index is a bit higher early today.

U.S. economic data due for release Monday includes the U.S. manufacturing purchasing managers index, the ISM business report on manufacturing, construction spending and the global manufacturing purchasing managers index.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices higher and rebounding from a three-week low hit Friday. Bulls still have the overall near-term technical advantage but have faded. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 3,846.75 and then at 3,875.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 3,800.00 and then at last week’s low of 3,775.00. Wyckoff’s Intra-day Market Rating: 6.0

June Nasdaq index futures: Prices are higher in early U.S. trading after hitting a seven-week low last Friday. Bulls still have the overall near-term technical advantage but have faded. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 13,120.75 and then at 13,250.00. On the downside, shorter-term support is seen at the overnight low of 12,945.00 and then at 12,800.00. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are weaker in early U.S. trading. Prices hit a contract low last week. Bears have the strong overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 160 26/32 and then at 161 even. Shorter-term support lies at the overnight low of 159 6/32 and then at 159 even. Wyckoff’s Intra-Day Market Rating: 4.0

June U.S. T-Notes: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish today. Shorter-term resistance lies at the overnight high of 133.16.5 and then at 133.20.0. Shorter-term technical support lies at 133.00.0 and then at 132.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

EURO CURRENCY

The June Euro currency futures are lower in early U.S. trading on more profit taking after hitting a six-week high late last week. Bulls have lost their overall near-term technical advantage as a price uptrend on the daily chart has been negated. The shorter-term moving averages for the Euro 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2125 and then at 1.2150. Shorter-term support is seen at the overnight low of 1.2058 and then at 1.2025. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

April Nymex crude oil prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend firmly in place on the daily chart. The shorter-term moving averages are bullish early today as the 4-day is above 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 last week’s high of $63.81 and then at $64.00. Look for sell stops just below technical support at $61.34 and then at $61.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures are higher in early U.S. pre-market trading. Bulls still have the firm overall near-term technical advantage as prices are mostly trending up—both on a near-term and longer-term basis. On tap today is the weekly USDA export inspections report.

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, February 26–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Bearish weekly and monthly low closes in the stock indexes today would be an ominously bearish signal that the indexes may have put in at least near-term tops if not major tops.

Marketplace attention is squarely on the strong rise in government bond yields this week, which saw the benchmark U.S. Treasury yield push above 1.6% at one point late this week. The 10-year yield has backed off a bit Friday and is fetching 1.475%. Higher bond yields are throwing a scare into the stock market bulls who have had a seemingly free pass to higher and higher share prices in recent months. However, the rising bond yields, if they continue to do so, will erode some investor interest in the stock market. The technology sector of stocks is already spooked as seen by bigger losses this week.

Bond yields are climbing on notions the major global economies will break out of their pandemic shackles in strong fashion during the second half of this year. Also, U.S. Democrats are ready to push a $1.9 trillion Covid-19 relief package through the U.S. House Friday. That win is expected despite a setback that means a minimum wage boost is unlikely to be in the final version that reaches President Biden. A near party-line vote seemed certain on the relief measure in the House.

Gold, which pays no dividend, has been hit hard by the rising government bond yields and on Friday the safe-haven metal fell to an eight-month low.

The markets are paying little attention to a U.S. military precision strike against Iranian- backed camps in Syria overnight. U.S.-Iran tensions were already elevated and the U.S. military action may prompt retaliation from Iran.

The key “outside markets” today see Nymex crude oil futures prices weaker and trading around $63.00 a barrel after hitting a 13-month high on Thursday. The U.S. dollar index is solidly higher early today on a corrective bounce from recent selling pressure.

U.S. economic data due for release Friday includes personal income and outlays, the advance economic indicators report, the Chicago ISM business survey, and the University of Michigan consumer sentiment survey.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices lower and hit a three-week low in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading late this week. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,847.50 and then at 3,875.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 3,800.00 and then at 3,775.00. Wyckoff’s Intra-day Market Rating: 4.0

March Nasdaq index futures: Prices are lower and hit a seven-week low in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded badly this week. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,915.00 and then at 13,000.00. On the downside, shorter-term support is seen at the overnight low of 12,662.25 and then at 12,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are higher in early U.S. trading on a corrective bounce from recent strong selling pressure that saw prices hit a contract low on Thursday. Bears have the strong overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 161 even and then at Thursday’s high of 161 24/32. Shorter-term support lies at the overnight low of 159 1/32 and then at 158 even. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are higher in early U.S. trading on a corrective bounce after hitting a contract low on Thursday. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at 134.00.0 and then at the overnight high of 134.08.0. Shorter-term technical support lies at the overnight contract low of 133.10.5 and then at the contract low of 133.02.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The March Euro currency futures are solidly lower in early U.S. trading on profit taking aftert hitting a six-week high on Thursday. Bulls still have the overall near-term technical advantage amid a price uptrend in place on the daily chart. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at 1.2150 and then at the overnight high of 1.2188. Shorter-term support is seen at the overnight low of 1.2096 and then at 1.2050. Wyckoff’s Intra Day Market Rating: 3.5

NYMEX CRUDE OIL

April Nymex crude oil prices are lower on profit taking after hitting a 13-month high on Thursday. Bulls still have the solid overall near-term technical advantage amid a price uptrend firmly in place on the daily chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $63.81 and then at $64.00. Look for sell stops just below technical support at $62.00 and then at $61.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

U.S. grain futures are solidly lower in early U.S. pre-market trading. Risk aversion is hitting the grains late this week. Bulls still have the firm overall near-term technical advantage as prices are mostly trending up—both on a near-term and longer-term basis.

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, February 25–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The discussion in the marketplace at present centers on global inflation prospects, with most traders reckoning inflation is up-ticking. The key question is how high will price inflation rise and will it become problematic. Government bond yields are trending up, with the yield on the benchmark U.S. 10-year Treasury note presently fetching 1.444%, a one-year high. Stock market bulls have taken note of the rising bond yields and are a bit worried about it. At least one big Wall Street investment bank is predicting a “commodity super-cycle” is just under way that will see raw commodity prices appreciate for quite some time to come. Many commodity futures markets such as the grains, crude oil and some softs have seen their prices hit multi-month and even multi-year highs this year.

Federal Reserve Chairman Jay Powell’s testimony to the U.S. Congress this week saw the central bank chief reiterate that U.S. money policy will remain very easy until U.S. employment has reached more normal levels coming out of the pandemic. This did work to assuage the stock index bulls a bit as prices have rebounded from early-week lows.

The key “outside markets” today see Nymex crude oil futures prices slightly up and trading around $63.30 a barrel. The U.S. dollar index is lower early today as the bulls have faded recently.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the second estimate of four-quarter gross domestic product, durable goods orders, pending home sales and the Kansas City Fed manufacturing survey.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices weaker in early U.S. trading. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,934.50 and then at the contract high of 3,959.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at Wednesday’s low of 3,851.75 and then at 3,825.00. Wyckoff’s Intra-day Market Rating: 5.5

March Nasdaq index futures: Prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 13,353.75 and then at 13,500.00. On the downside, shorter-term support is seen at 13,000.00 and then at 12,900.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are solidly lower and hit another contract low in early U.S. trading. Bears have the strong overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 160 16/32 and then at 161 even. Shorter-term support lies at the overnight contract low of 159 26/32 and then at 159 even. Wyckoff’s Intra-Day Market Rating: 2.0

March U.S. T-Notes: Prices are solidly lower and hit a contract low in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 135.00.0 and then at the overnight high of 135.09.0. Shorter-term technical support lies at the overnight contract low of 134.17.5 and then at 134.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0

EURO CURRENCY

The March Euro currency futures are solidly higher and hit a six-week high in early U.S. trading. Bulls have the firm overall near-term technical advantage amid a price uptrend in place on the daily chart. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2242 and then at 1.2300. Shorter-term support is seen at 1.2200 and then at the overnight low of 1.2160. Wyckoff’s Intra Day Market Rating: 7.0

NYMEX CRUDE OIL

April Nymex crude oil prices are slightly higher and hit a 13-month high in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend firmly in place on the daily chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above 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 overnight high of $63.79 and then at $64.00. Look for sell stops just below technical support at $62.00 and then at $61.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures are mixed in early U.S. pre-market trading. The bulls are having a good week and have the solid overall near-term technical advantage as prices are mostly trending up—both on a near-term and longer-term basis. On tap today is the weekly USDA export sales report. The path of least resistance for grain futures prices remains sideways to higher.

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