Daily Morning Report

Thursday, March 16–Jim Wyckoff’s morning markets report

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The marketplace has been somewhat assuaged by news the Swiss central bank has thrown its financial support behind the troubled Credit Suisse bank. Credit Suisse’s CEO said his bank will continue its “strategic transformation to deliver value to our clients.” Credit Suisse’s stock price jumped 20% Thursday. However, many long-time market watchers are “waiting for the next shoe to drop” in the banking crisis.

The European Central Bank is meeting Thursday. The ECB was expected to raise its main interest rate by 50 basis points. However, the still-shaky banking sector in the Euro zone at present has likely altered the ECB’s plans. Said analyst Han Tan from Exinity: “A week is indeed a long time in global financial markets, and the calculus for central bank rate hikes has been dramatically altered by the SVB and Credit Suisse crises in recent days. The market’s prior foregone conclusion of a 50-basis point hike by the European Central Bank has been whittled down to a coin toss today. A 50bp hike may be too much for now, in light of the still-fragile sentiment surrounding the banking sector on both sides of the Atlantic. The ECB’s dilemma pits consumer price stability against financial systemic stability, and markets will be attuned to where the ECB’s bias lies. The central bank’s policy signals could serve as a canary in the coal mine, at least ahead of the Fed’s meeting next week, as contagion fears continue to permeate global financial markets.”

The Federal Reserve’s FOMC meets next week and there is a hot debate in the marketplace regarding whether the Fed will raise its main interest rate by 25 basis points, or stand pat amid the U.S. and European banking crises. There appear to be valid arguments for both sides.

The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil futures prices are firmer and trading around $68.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.494%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, new residential construction, and import and export prices.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. The 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 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 this week’s high of 3,972.50 and then at 4,000.00. Support for active traders is seen at this week’s low of 3,839.25 and then at the December low of 3,822.00. Wyckoff’s Intra-day Market Rating: 4.5

June Nasdaq index futures: Prices are slightly up in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 12,500.00 and then at the March high of 12,623.00. On the downside, shorter-term support is seen at 12,200.00 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

June 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 and 18-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 this week’s high of 133 2/32 and then at 134 even. Shorter-term support lies at 131 even and then at 130 even. Wyckoff’s Intra-Day Market Rating: 5.5

June U.S. T-Notes: 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 115.19.5 and then at this week’s high of 115.31.0. Shorter-term technical support is seen at the overnight low of 114.26.0 and then at 114.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

EURO CURRENCY

The June Euro currency futures are slightly higher in early U.S. trading. The shorter-term moving averages for the Euro are still 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 neutral to neutral early today. The Euro currency finds shorter-term technical resistance at 1.0700 and then at 1.0750. Shorter-term support is seen at this week’s low of 1.0580 and then at 1.0500. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

April Nymex crude oil prices are firmer in early U.S. trading, after hitting a 15-month low Wednesday. Bears have the solid overall near-term technical advantage. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below 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 $69.00 and then at $70.00. Look for sell stops just below technical support at $67.00 and then at this week’s low of $65.65. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Grain futures prices were mixed overnight. Risk aversion this week has limited buying interest in grains and may continue to do so. The big drop in crude oil prices Thursday to a 15-month low is an ominous, bearish “shot across the bow” of the entire raw commodity sector. Soybean market bulls have the slight overall near-term technical advantage. Corn and wheat bears have the firm overall chart advantage. On tap today is the weekly USDA export sales 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

Wednesday, March 15–Jim Wyckoff’s morning markets report

Global stock markets were mixed overnight, with Asian shares mostly up and European shares solidly down. European banking stocks are taking a big hit today, led by Credit Suisse and worries about its financial health. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. Risk aversion is again elevated at mid-week as the banking turmoil that started in the U.S. is spreading in Europe. Falling U.S. Treasury yields and a firmer U.S. dollar index are indicative of traders and investors who are stressed and wanting to hold those safe-haven assets. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.534%.

The European Central Bank meets Thursday and was expected to raise its main interest rate by 50 basis points. However, the shaky banking sector in the Euro zone at present may at the last minute alter the ECB’s plans. The Federal Reserve’s FOMC meets next week and there is a hot debate in the marketplace regarding whether the Fed will raise its main interest rate by 25 basis points, or stand pat amid the U.S. banking crisis.

The data point of a very busy U.S. economic report day Wednesday is the producer price index report for February. PPI is seen coming in up 0.3% from January, following a 0.7% rise in January from the December report. Tuesday’s U.S. consumer price index report came out right in line with market expectations.

In overnight news, China’s economy rebounded the first two months of the year, as the world’s second-largest economy moved away from Covid restrictions of the past three years. Retail sales in January and February were up 3.5% from the same period a year ago. Industrial production was up 2.4% in the same periods. China’s exports were down 6.8% in the same periods.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil futures prices are slightly up and trading around $71.50 a barrel. 

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Empire State manufacturing survey, retail sales, the producer price index, the NAHB housing market index, manufacturing and trade inventories, the weekly DOE liquid energy stocks report and Treasury international capital data.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are sharply lower in early U.S. trading. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,972.50 and then at 4,000.00. Support for active traders is seen at this week’s low of 3,839.25 and then at the December low of 3,822.00. Wyckoff’s Intra-day Market Rating: 3.5

June Nasdaq index futures: Prices are sharply down in early U.S. trading. 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 average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,374.25 and then at 12,500.00. On the downside, shorter-term support is seen at 12,000.00 and then at this week’s low of 11,806.25. Wyckoff’s Intra-Day Market Rating: 3.5.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are sharply higher on safe-haven demand. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at Tuesday’s high of 132 4/32 and then at this week’s high of 132 30/32. Shorter-term support lies at the overnight low of 129 1/32 and then at this week’s low of 128 7/32. Wyckoff’s Intra-Day Market Rating: 7.0

June U.S. T-Notes: Prices are solidly 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 115.00.0 and then at this week’s high of 115.13.0. Shorter-term technical support is seen at the overnight low of 113.08.5 and then at 113.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5

EURO CURRENCY

The June Euro currency futures are solidly lower in early U.S. trading. 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 neutral to bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0822 and then at 1.0900. Shorter-term support is seen at 1.0640 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 3.5

NYMEX CRUDE OIL

April Nymex crude oil prices are lower and hit a three-month low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below 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 $72.56 and then at $74.00. Look for sell stops just below technical support at $70.00 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures prices were mixed but mostly mostly lower overnight. Risk aversion at mid-week is again elevated and is limiting buying interest in grains. Soybean market bulls have the overall near-term technical advantage. Corn and wheat bears have the firm overall chart advantage.

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

Tuesday, March 14–Jim Wyckoff’s morning markets report

Global stock markets were mostly lower overnight, while U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Trader and investor anxiety is still elevated Tuesday, following late last week’s collapse of Silicon Valley Bank (SVB), the sixteenth largest bank in the U.S. The reverberations of the bank failure are still present in the marketplace and will likely continue to be for at least the next few days.

Focus today is on the U.S. consumer price index report for February, which is forecast coming in at up 6.0%, year-on-year, compared to a rise of 6.5% in the January CPI report.

Goldman Sachs and many other analysts are forecasting the Federal Reserve now will not raise U.S. interest rates at its FOMC meeting next week. The fear in the marketplace is a contagion effect and crisis of confidence among the public. So far today, there does not appear to be extreme anxiety or panic in the marketplace, following the U.S. government’s pledge to cover the funds for all of SVB’s depositors—but not its investors in its stock.

The U.S. Treasury market has stabilized. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.605%. Another surge in U.S. T-Bond and T-Note prices (falling yields) would suggest a surge in marketplace worry and anxiety. The U.S. 2-year Treasury note on Monday surged to the largest daily price gain (yield decline) since the stock market meltdown in 1987.

The key outside markets today see the U.S. dollar index firmer after a steep two-session downdraft. Nymex crude oil futures prices are solidly lower and trading around $73.00 a barrel. Crude has been hit this week by worries about declining global demand amid the financial turmoil and its lingering implications.

Other U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales indexes and the NFIB small business index.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are firmer in early U.S. trading after hitting a 2.5-month low Monday. The 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 is below 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 Monday’s high of 3,971.50 and then at 4,000.00. Support for active traders is seen at Monday’s low of 3,839.25 and then at the December low of 3,822.00. Wyckoff’s Intra-day Market Rating: 5.5

June Nasdaq index futures: Prices are slightly up in early U.S. trading. 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 to bullish early today. Shorter-term technical resistance is seen at Monday’s high of 12,222.75 and then at 12,500.00. On the downside, shorter-term support is seen at Monday’s low of 11,806.25 and then at 11,650.00. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are lower on a corrective pullback after hitting a five-week high Monday, on safe-haven demand. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neural to bullish early today. Shorter-term technical resistance is seen at the overnight high of 132 4/32 and then at Monday’s high of 132 30/32. Shorter-term support lies at 130 even and then at 129 even. Wyckoff’s Intra-Day Market Rating: 4.0

June U.S. T-Notes: Prices are solidly lower on a corrective pullback after hitting a five-week high Monday. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 115.00.0 and then at Monday’s high of 115.13.0. Shorter-term technical support is seen at the overnight low of 113.22.0 and then at 113.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The June Euro currency futures are weaker in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above 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 Monday’s high of 1.0816 and then at 1.0850. Shorter-term support is seen at Monday’s low of 1.0713 and then at last Friday’s low of 1.0640. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

April Nymex crude oil prices are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above 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 $74.90 and then at $76.00. Look for sell stops just below technical support at Monday’s low of $72.30 and then at the December low of $70.86. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures prices were mostly lower overnight. Risk aversion in the marketplace this week is likely to continue to limit buying interest in grains. Soybean market bulls have the overall near-term technical advantage. Corn and wheat bears have the firm overall chart advantage.

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 13–Jim Wyckoff’s morning markets report

Global stock markets were mostly lower overnight, while U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Trader and investor anxiety is elevated to start the trading week, following a turbulent weekend in the wake of late last week’s collapse of Silicon Valley Bank, the sixteenth largest bank in the U.S. The federal government said it would back all depositors in the failed bank. Other smaller U.S. banks are reported to be in stress due to depositor withdrawals. Government regulators have also taken over Signature Bank, which serves many crypto currency companies.

To show how much this event has shaken the general marketplace, Goldman Sachs is now predicting the Federal Reserve will not raise U.S. interest rates at its FOMC meeting next week. Said one market analyst in a Wall Street Journal story today: “When the Fed raises rates so quickly, nine times out of 10, it breaks things. We may see more corporate failures; we may see more regional banks go under.” Read a headline on Dow Jones Newswires: “Bank mayhem is now on the Fed’s radar.”

Gold prices have extended late last week’s sharp gains and have hit a four-week high near $1,900 an ounce today. Safe-haven demand is featured in the metal. U.S. Treasury prices are also solidly up (yields down) on flight-to-quality buying. Meantime, Bitcoin prices are sharply up.

Of course, the fear in the marketplace is a contagion effect and crisis of confidence among the investing public and the general public. The next two days will be critical in gauging the stress of the investing and general public.

The key outside markets today see the U.S. dollar index lower after hitting a three-month high last week. Nymex crude oil futures prices are lower and trading around $75.25 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.549%, after recently poking above the 4.0% level.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are slightly down and near a two-month low in early U.S. trading. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 3,950.00 and then at 4,000.00. Support for active traders is seen at the last week’s low of 3,881.00 and then at the December low of 3,822.00. Wyckoff’s Intra-day Market Rating: 4.5

June Nasdaq index futures: Prices are slightly up near steady in early U.S. trading. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,222.75 and then at 12,500.00. On the downside, shorter-term support is seen at last week’s low of 11,925.75 and then at 11,750.00. Wyckoff’s Intra-Day Market Rating: 5.0.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are solidly higher and hit a five-week high on safe-haven demand 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 and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 130 30/32 and then at 132 even. Shorter-term support lies at the overnight low of 128 7/32 and then at 127 even. Wyckoff’s Intra-Day Market Rating: 7.0

June U.S. T-Notes: Prices are sharply higher and hit a five-week high 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 114.29.5 and then at 115.00.0. Shorter-term technical support is seen at 113.16.0 and then at 113.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0

EURO CURRENCY

The June Euro currency futures are firmer in early U.S. trading. 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 bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0799 and then at 1.0850. Shorter-term support is seen at 1.0700 and then at Friday’s low of 1.0640. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

April Nymex crude oil prices are lower in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above 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 $76.00 and then at $77.00. Look for sell stops just below technical support at $74.00 and then at $73.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures prices were mixed overnight. Risk aversion in the marketplace this week is likely to limit buying interest in grains. Soybean market bulls have the firm overall near-term technical advantage. Corn and wheat bears have the firm overall chart advantage. 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