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How to Profit from Future Options- IFO Weekly Update

Published on August 13, 2012

How to Profit from Future Options- IFO Weekly Update

August 13, 2012

Futures markets especially Corn, Wheat and Crude have been buzzing rather actively during past few months. As part of our Income from Future Options (IFO) service, our strategy has been to wait for the best set-ups that increases our probability of success and as soon as our set-up emerges, then we go for it. (Try IFO FREE for 14 days, thereafter US$97/- per month) (prices are revised upwards from Jul 22, 2013).

Here is the weekly outlook for 3 markets that we are monitoring for set-ups to emerge. Usually this discussion is shared with Members only. This week we are sharing it with all.

CORN

 Corn has been consolidating and forming a bullish formation for weeks now. Latest USDA report showed just how bad the situation is in corn. Soon after the report, CORN futures spiked but then settled for lower. As of now, Dec futures are still below Friday’s low. I was actually waiting for a bullish breakout to trade it to the upside. But on Friday, we had a big down day with a false breakout. Now the question is if the bulls have lost it and the bullish pattern invalidated. Should corn break the low at 774, I will have little faith left in the bulls.

Potential Trade Ideas 
I am waiting for the bullish pattern to be invalidated to play corn to the downside. As corn can move very quickly in either direction, I will only take the trade if there is a close enough stop to limit my risk. Close enough stop meaning corn doesn’t have to move a lot against me to prove me wrong. This is an aggressive setup.

GOLD

 Last week I wrote that gold may have found support and this week, it really looks that way. However, gold has yet to reach 1640 and the climb so far looks laborious to say the least. With each passing week, the lows are getting higher and higher and I would like to believe that the bulls are accumulating their strength slowly but steadily.

Potential Trade Ideas
Still waiting for gold to really push past 1620 with a convincing bullish candle to initiate bull put spreads. Looks like we are getting closer to that day. Patience is the key word.

NATURAL GAS

Natural gas made lower highs and lower lows over the past 2 weeks with big bearish candles. It looks like market wants to push lower. As US elections approach, this is going to be interesting market to trade. Next level of support should be at 2.7 region and if that doesn’t hold, the next level will be 2.3

Potential Trade Ideas
I want to see the support at 2.7 taken out, preferably with small red candles to consider a bear call spread or even a naked call. I always prefer small candles in my setups as small candles usually means small stop losses.

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