Daily Morning Report

Tuesday, November 29–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Traders and investors are still very closely monitoring the civil unrest situation in China. Some market watchers are deeming the recent unrest as bullish for stocks and commodities because it will likely force China to back off on its strict Covid lockdowns that have crimped the world’s second-largest economy. Reports said new Covid cases in China are decelerating a bit. It was calmer in Chinese streets Tuesday evening, with no major protesting reported in the media. Reports said Chinese authorities deployed a heavy police presence in major cities to deter a repeat of the weekend demonstrations. Respected authority on China, Bill Bishop of Sinocism, said the government “has a playbook for dealing with these kinds of events and has been hardening the system for many years for just these kinds of threats.” He said the Chinese government will be “pushing harder on propaganda work, censorship and political thought work. And ‘hostile foreign forces’ will be blamed.” Bishop added, “For all the stability maintenance work Beijing has done they really would have a hard time dealing with tens or hundreds of thousands or more people on the streets in one or more cities. I am not expecting anything like that to happen, but you can’t rule it out, and I will bet the security services are not ruling it out.”

Other big market events this week include a speech by Federal Reserve Chairman Jerome Powell on Wednesday afternoon and the U.S. employment report from the Labor Department on Friday morning.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly higher on a strong rebound after hitting an 11-month early Monday, and are trading around $79.50 a barrel. There are reports OPEC at its meeting next week will consider cutting the cartel’s collective crude oil production. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently 3.652%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the monthly and quarterly U.S. house price indexes, the S&P CoreLogic/Case-Shiller home price indexes, and the consumer confidence index.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. The 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 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 Monday’s high of 4,061.25 and then at Friday’s high of 4,094.50. Support for active traders is seen at 4,000.00 and then at last week’s low of 3,937.50. Wyckoff’s Intra-day Market Rating: 5.5

March Nasdaq index futures: Prices are firmer in early U.S. trading. Bulls have the slight overall near-term technical advantage but need to show more power soon to keep it. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with 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 Monday’s high of 11,900.50 and then at 12,000.00. On the downside, shorter-term support is seen at last week’s low of 11,526.50 and then at 11,300.00. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are higher in early U.S. trading. Prices Monday hit a seven-week high. 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 Monday’s high of 128 17/32 and then at 129 even. Shorter-term support lies at 127 even and then at 126 even. Wyckoff’s Intra-Day Market Rating: 6.0

March U.S. T-Notes: Prices are higher in early U.S. trading. Prices Monday hit a seven-week high. 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 lies at Monday’s high of 113.27.0 and then at 114.00.0. Shorter-term technical support lies at the overnight low of 113.03.5 and then at last Friday’s low of 112.27.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The March Euro currency futures are higher in early U.S. trading. Prices Monday hit a nearly five-month high. Bulls have the firm overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar 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 neutral early today. The Euro currency finds shorter-term technical resistance at 1.0500 and then at Monday’s high of 1.0580. Shorter-term support is seen at Monday’s low of 1.0425 and then at 1.0400. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

January Nymex crude oil prices are solidly higher on a strong rebound after hitting an 11-month low on Monday. Bears still have the overall near-term technical advantage as a price downtrend is in place on the daily bar chart. However, the bears now appear to be exhausted to begin to suggest a market bottom is in place. 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 the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $80.00 and then at $82.00. Look for sell stops just below technical support at $78.00 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 6.5

GRAINS

U.S. grain futures were steady to firmer in overnight trading. The China unrest is still bearish for the grains, but it appears that situation has eased a bit, which may prompt buyers back into the grains. Corn and soybean bulls have the slight overall near-term technical advantage. Wheat bears have the firm near-term technical 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, November 28–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The marketplace is uneasy to start the trading week, as there is civil unrest in China over its strict zero-Covid policies. Reports said there were demonstrations across China over the weekend. It’s the largest show of discontent since the Tiananmen Square protests in 1989. China is the world’s second-largest economy and the most populous nation. The geopolitical and economic consequences of a further escalation in protests and any crackdown by Chinese authorities would be huge.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly lower, hit a 10-month low overnight, and are trading around $74.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently 3.692%.

Other big market events this week include a speech by Federal Reserve Chairman Jerome Powell on Wednesday afternoon and the U.S. employment report from the Labor Department on Friday morning.

U.S. economic data due for release Monday includes the Texas manufacturing outlook survey.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are lower in early U.S. trading, profit taking after hitting a nine-week high on Friday. Bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. The 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 is above 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 4,061.25 and then at Friday’s high of 4,094.50. Support for active traders is seen at 4,000.00 and then at last week’s low of 3,937.50. Wyckoff’s Intra-day Market Rating: 4.0

March Nasdaq index futures: Prices are lower in early U.S. trading. Bulls have the slight overall near-term technical advantage but need to show more power soon to keep it. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 11,865.00 and then at 12,000.00. On the downside, shorter-term support is seen at last week’s low of 11,526.50 and then at 11,300.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are slightly higher in early U.S. trading and hit a seven-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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 128 17/32 and then at 129 even. Shorter-term support lies at 127 even and then at 126 even. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are firmer in early U.S. trading and hit a seven-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 neutral early today. Shorter-term resistance lies at the overnight high of 113.27.0 and then at 114.00.0. Shorter-term technical support lies at 113.00.0 and then at Friday’s low of 112.27.5. 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 higher and hit a nearly five-month high in early U.S. trading. Bulls have the firm overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar 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 neutral to bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0580 and then at the 1.0600. Shorter-term support is seen at 1.0500 and then at the overnight low of 1.0425. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

January Nymex crude oil prices are lower and hit a 10-month low in early U.S. trading. Bears have the solid overall near-term technical advantage as a price downtrend is in place on the daily bar chart. 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 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 $75.00 and then at the overnight high of $76.49. Look for sell stops just below technical support $73.00 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 3.5

GRAINS

U.S. grain futures were mostly lower in overnight trading. On tap today is the weekly USDA export inspections report. Increased risk aversion amid the China unrest is bearish for the grains. Corn and soybean bulls and bears are on a level overall near-term technical playing field. Wheat bears have the firm near-term technical 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

Friday, November 25–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight, with European shares mostly firmer and Asian shares mostly weaker. U.S. stock indexes are headed for mixed openings when the New York day session begins. Many U.S. markets close early Friday, the day after the Thanksgiving holiday in which U.S. markets were closed. Today is typically one of the slowest U.S. trading days of the year.

Today is “Black Friday” in the U.S., where holiday shoppers go wild. Early results on U.S. consumer spending will be closely examined by market watchers, including the Federal Reserve.

The marketplace remains subdued late this week as Covid-19 cases in China are rising at a record pace as China’s government tries to deal with its slumping economy amid Covid-related lockdowns. China’s central bank lowered its reserve requirement ratio by 25 basis points Friday in a bid to support the world’s second-largest economy. “Combined with other measures to boost the property market and ease Covid curbs, the cut could be supportive over the medium term when growth remains highly uncertain,” said one analyst.

The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are higher and trading around $79.75 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently 3.722%.

There is no major U.S. economic data due for release Friday.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading and near the recent for-the-move high. Bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. The 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 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 November high of 4,050.75 and then at 4,100.00. Support for active traders is seen at 4,000.00 and then at this week’s low of 3,937.50. Wyckoff’s Intra-day Market Rating: 5.5

December Nasdaq index futures: Prices are slightly lower in early U.S. trading. Bulls have the slight overall near-term technical advantage but need to show more power soon to keep it. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 12,000.00 and then at the November high of 12,118.75. On the downside, shorter-term support is seen at Wednesday’s low of 11,720.00 and then at this week’s low of 11,526.50. Wyckoff’s Intra-Day Market Rating: 5.0.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Prices hit a seven-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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 128 13/32 and then at 129 even. Shorter-term support lies at 127 even and then at 126 even. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are slightly lower in early U.S. trading after hitting a seven-week high overnight. 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 above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 113.24.5 and then at 114.00.0. Shorter-term technical support lies at 112.20.0 and then at this week’s low of 112.11.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

EURO CURRENCY

The March Euro currency futures are slightly lower in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. 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 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 1.0531 and then at the November high of 1.0568. Shorter-term support is seen at 1.0400 and then at this week’s low of 1.0316. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

January Nymex crude oil prices are higher in early U.S. trading. Bears have the overall near-term technical advantage as a price downtrend is in place on the daily bar chart. 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 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 $81.00 and then at this week’s high of $82.36. Look for sell stops just below technical support $78.00 and then at the overnight low of $76.89. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures were mixed in overnight trading. On tap today is the weekly USDA export sales report. Grain markets close early today. Grain bulls are squelched due to ongoing demand worries amid the China Covid lockdowns. Corn and soybean bulls and bears are on a level overall near-term technical playing field. Wheat bears have the firm near-term technical advantage. Grain traders will continue to closely monitor the key outside markets: the U.S. dollar index and crude oil prices.

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 23–Jim Wyckoff’s Morning Markets Report

Most global stock markets were slightly up overnight. U.S. stock indexes are headed for slightly higher openings when the New York day session begins. The marketplace remains tentative at mid-week as Covid-19 cases in China continue to rise and are crimping the world’s second-largest economy. Newswire reports this morning quoted Chinese officials as saying they will further ease China’s monetary policies in an effort to produce more economic growth.

Meantime, the Euro zone reported its November manufacturing purchasing managers index (PMI) at 47.3, which was slightly above market expectations and compares to the October reading of 46.4. Still, a reading below 50.0 suggests contraction in the sector. It was the fifth month in a row of manufacturing sector contraction for the Euro zone.

Today is the busiest day for U.S. economic data this holiday-shortened trading week, including the minutes from the last FOMC monetary policy meeting, to be released in the early afternoon. The minutes may contain a few new clues on the future path and timing of Fed monetary policy. U.S. markets are closed on Thursday for the Thanksgiving holiday.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are lower and trading around $79.00 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently 3.756%.

Other U.S. economic data due for release Wednesday includes the weekly jobless claims report, the weekly MBA mortgage applications survey, durable goods orders, the U.S. flash services and manufacturing purchasing managers indexes (PMI), new residential sales, the University of Michigan consumer sentiment survey and the weekly DOE liquid energy stocks report.

–Jim

U.S. STOCK INDEXES

December S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with the 9-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 November high of 4,050.75 and then at 4,100.00. Support for active traders is seen at this week’s low of 3,937.50 and then at last week’s low of 3,912.50. Wyckoff’s Intra-day Market Rating: 5.5

December Nasdaq index futures: Prices are slightly higher in early U.S. trading. Bulls have the slight overall near-term technical advantage but need to show more power soon to keep it. 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 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 12,000.00 and then at the November high of 12,118.75. On the downside, shorter-term support is seen at this week’s low of 11,526.50 and then at 11,300.00. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Prices hit a six-week high on Wednesday. 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 127 even and then at 128 even. Shorter-term support lies at 126 even and then at this week’s low of 125 even. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at this week’s high of 113.00.0 and then at 113.16.0. Shorter-term technical support lies at this week’s low of 112.11.5 and then at 112.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

EURO CURRENCY

The March Euro currency futures are firmer in early U.S. trading. Bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. 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 above the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0436 and then at 1.0500. Shorter-term support is seen at this week’s low of 1.0316 and then at 1.0250. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

January Nymex crude oil prices are lower in early U.S. trading. Bears have the near-term technical advantage as a price downtrend is in place on the daily bar chart. 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 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 $80.00 and then at $81.00. Look for sell stops just below technical support at the overnight low of $78.38 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

U.S. grain futures were mixed in overnight trading. Not much new this week, in quiet trading. Bulls are being squelched due to ongoing demand worries amid the China Covid lockdowns. Corn and soybean bulls and bears are on a level overall near-term technical playing field. Wheat bears have the firm near-term technical advantage. Grain traders will continue to closely monitor the key outside markets: the U.S. dollar index and crude oil prices.

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