Spread trading is the simultaneous buying and selling of the same number of contracts in a certain commodity. The spread is the measurement of the price difference between the two different contracts. In other words a spread is buying one futures contract and selling one futures contract simultaneously to profit from the change in differential of the two contracts. The most common form of spread in commodities is the……. calendar spread in which you buy one month and simultaneously sell another. In the most common form of spread trading – Intra- commodity spreads- the commodity is the same product and they are deliverable at different times.

A trader who trades with the objective of achieving profits through the  successful anticipation of price movements.

A strategy involving the simultaneous purchase and sale of identical or equivalent commodity futures contracts or other instruments across two or more…….. markets in order to benefit from a discrepancy in their relationship. In a theoretical efficient market, there is a lack of opportunity for profitable arbitrage.

Yesterday morning the market started off with a sharp selloff but ended up holding support and then turned back around. The S&P cash and futures held a retest of their 150 day smooth and 50 day moving averages, that is short term bullish action. I think that as long as the S&P cash and futures can hold above these moving averages the market……… will continue its recent run higher. The Dow remains strong and continues to be the upside leader. The Transports are still in negative territory for the year but they are now trading back above their 200 day moving average and that is bullish action. The Nasdaq on the other hand continues to struggle getting back above their 200 day and 50 day moving averages. If the Nasdaq cannot get back above their 200 day and 50 day moving averages sooner than later I think that we might see this rally stall or we may start to head back down. The Nasdaq was one of the upside leaders and when one of the upside leaders fails to get back above support we could see the rest of the market take that as a negative. Today I will be initially looking to buy breaks down to support at 1240.75 and I will be looking for a test of the 200 day moving average at 1255.42 (futures) where I will be a seller. If we cannot sustain trade above support at 1240.75 I will turn seller and then be looking for the Gap to filled in (Gap is also the POC) and also a possible test of the TOV where I will be a scalp buyer in this area. If we cannot sustain trade above the TOV I will turn seller and then be looking for a test of a group of moving averages; 10 day, 20 day, and 50 day moving averages are all within 0.60 of each other, I will be a buyer in that area. Failure to hold those moving averages I will turn seller and then be looking for a test of the 150 day smooth moving average and the BOV where I will be a scalp buyer in that area. If we cannot hold the 150 day smooth moving average that would be bearish action and I would turn seller looking for the single ticks to be filled in below for 1222.75 – 1218.00 and I will be a buyer at the end of those single ticks (we would also be close to the daily pivot at 1220.50). Have a great day!

The momentum continues to shift from bullish to bearish, but without a true market leader and definitive trend. With only about a week remaining in the year I think that we could continue to see the bulls and the bears fight it out with low volume and high volatility. As of right now the bulls have momentum and are closer to taking control of this trade. The Dow is the strongest market because they are above……. all of their major moving averages and are comfortably in positive territory for the year. I think that as long as the Dow can sustain trade above their 200 day moving average the bulls will try to pull the rest of the Indices higher. The Nasdaq was the strongest market over the past few months but they are now struggling to get back above their 200 day and 50 day moving averages. I think that in order for the bulls to continue this momentum the Nasdaq has to get back above those moving averages. If the Nasdaq cannot get back above these moving averages I think that this rally could stall or even falter. The Transports are in striking distance of their 200 day moving average and violation of their 200 day moving average could add a spark to the market. The S&P busted through their 150 day smooth and 50 day moving averages yesterday. This area has been resistance over the past week but the bulls managed to push through it. I think that as long as the S&P cash can sustain trade above these moving averages the bulls will have a good chance of continuing this momentum. Today I will be initially looking to buy breaks leaning on 150 day smooth and 50 day moving averages. I will be looking for the market to test the HVB and fill in the Gap, then a possible a test of resistance at 1240.75 where I will be a seller. If we cannot sustain trade above the 150 day smooth and 50 day moving averages I will turn seller and look for a test of the daily pivot and possibly the single ticks from 1223.75 – 1218.00 to be filled in. I think that we will continue to see light volume and high volatility so I will be keeping it on the light side. Have a great day!

Written by Anthony Crudele

The Holidays are upon us but there is no Holiday cheer between the bulls and the bears….they continue to fight it out for control of this market. Yesterday was big day for the bears with the Nasdaq futures closing back in negative territory for the year and below their….. 150 day smooth moving average. Today the Nasdaq futures are poised to open back above that area so I will be watching to see if they can sustain trade above that area. If they cannot then I think that we could see a sharp selloff. The Dow closed below their 50 day moving average leaving only their 150 day smooth moving average and unchanged for the year left to hold before the bears take back control of their market. I think that the Dow will remain choppy in a range between unchanged for the year and their 200 day moving average. If they do breakout on either side then we could see a sharp move for all of the markets in that direction. The Transports also closed below their 50 day and 150 day smooth moving averages but are poised to open back above them this morning. I will be watching to see which side that they hold on for a lead on today’s direction. The S&P remains weak and under control of the bears. They are below all of their major moving averages and they also made new lows for month. As long as the S&P cash remains below their 50 day and 150 day smooth moving average I think that we will continue to see volatility that will favor the bears. Today I will be initially looking to sell rallies up to resistance at 1218.25 looking for us to test the daily pivot at 1208.25 and potentially fill in the one single tick below at 1207.25 and test the POC at 1206.25 where I will be a buyer in that area. If we fail to hold this area I will turn seller and then be looking for us to fill in the Gap and test the HVB and support at 1198.00 where I will be a buyer. If we fail to hold support at 1198.00 I will turn seller and then be looking for us to test yesterdays low at 1195.50 and potentially support at 1188.00 where I will be an aggressive buyer. If we cannot sustain trade below 1218.25 I will turn buyer and then be looking for resistance above at the 150 day smooth moving average, 50 day moving average and resistance at 1228.50 where I will be an aggressive seller in that area. Have a great day!

Written by Anthony Crudele

Back and forth we go….The bulls and the bears continue to battle it out for control of this trade. Overnight the Nasdaq futures came within 1.25 of unchanged for the year and then rallied 30.00. I think that the bulls are protecting unchanged for the year in the Nasdaq. As long as the Nasdaq can sustain…… trade in positive territory for the year I think that the rest of the market will take that as a positive and try to rally into the end of the year. The Dow is trading comfortably in positive territory for the year and is currently in a tight trading range between their 50 day and 200 day moving average. Whichever side that they can break out from could be a good lead for direction. The Transports recently held a test of their 150 day smooth and 50 day moving averages. That is bullish action and as long as they can sustain trade above that area I think that we could see the Indices start to grind back up. The S&P cash continues to sustain trade below all of their major moving averages and that is bearish action. If the cash continues to fail to get back above their 150 day smooth and 50 day moving averages I think that we see another selloff in the S&P. There is divergence between all of the major markets and I expect the trade to remain choppy until either the bulls or the bears start to take control of this market. Today I will be initially looking to sell rallies up to the 150 day smooth moving average at 1224.11 (futures), resistance at 1226.25, and the 50 day moving average at 1227.03 (futures) and I will be looking for a test of the daily pivot at 1214.25 where I will be a buyer. Failure to sustain trade below that area I will turn buyer and then be looking for a test of resistance above at 1238.00 where I will be a seller. If we cannot sustain trade above the daily pivot I will turn seller and then be looking for us to fill in the Gap and then possibly test support below at 1202.50 where I will be a buyer. Failure to sustain trade above 1202.50 I will turn seller and then be looking for the monthly low to be tested at 1198.00 and then a possible test of support below at 1190.50 where I will be a buyer. Have a great day!

Written by Anthony Crudele

The bulls and the bears continue to fight it out and at this moment there is still no winner. The Nasdaq futures remain in positive territory for the year and above their 150 day smooth moving average. The Nasdaq has been trying for months to lead the rest of the market higher but they have been unsuccessful. I think that as long as the Nasdaq can sustain….. trade in positive territory for the year and above their 150 day smooth moving average the bulls will continue to try and push the Nasdaq and the rest of the market higher. The Dow remains strongly in positive territory for the year and is poised to open back above their 200 day moving average. That would put the Dow above all of their major moving averages and that is bullish action. The Dow is currently the strongest market and if they can sustain trade above their 200 day moving average I think that we could see the rest of the market add to their overnight gains. Yesterday the S&P cash failed at a test of their 150 day smooth and 50 day moving averages. This morning they are poised to open near them. If the cash can push through these moving averages and sustain trade above them, I think that we could see a nice rally today. The Transports closed back above their 150 day smooth moving average and their 50 day moving average. That is bullish action and as long as they can sustain trade above these moving averages I think that will give the bulls the advantage. Today I will be initially looking to buy breaks down to the daily pivot at 1214.25 and I will be looking for a test of support at 1226.25 where I will be a seller. If we cannot sustain trade below resistance at 1226.25 I will turn buyer and then be looking for a test of resistance above at 1238.00 where I will be an aggressive seller. Failure to sustain trade above the daily pivot at 1214.25 I will turn seller and then be looking for the market to fill in the Gap and then look to possibly test support below at 1202.50 where I will be a buyer. Today is quadruple witching so I expect another choppy day. Have a great weekend!

Written by Anthony Crudele

The market continues to selloff and the bears seem to be taking control, but the bulls have not yet lost the war. Yesterday the Nasdaq futures came just short of testing their 150 day smooth moving average and unchanged for the year and then they popped. As long as the Nasdaq can sustain trade above that area then I think that the market may start to work its way back up. The Dow is back below….. their 200 day moving averages but still strongly in positive territory for the year and also trading above their 50 day and 150 day smooth moving averages. As long as the Dow can hold those moving averages and can sustain trade in positive territory for the year I think that the market could start to work its way back up. The S&P on the other hand is trading weak. The cash is now trading below all of their major moving averages and they are still in negative territory for the year. This is bearish action and unless the S&P cash can get back above their 50 day and 150 day smooth moving averages I think that the advantage goes to the bears. The Transports are also trading below all of their major moving averages and but are poised to open near their 150 day smooth and 50 day moving averages on today’s open. If they can get back above those moving averages then I think that the market could add to their overnight gains and the S&P cash could look to retest some of their moving averages. If they cannot get back above those moving averages then I think that the markets will selloff. Today I will be initially looking to sell rallies up to resistance at 1226.25 (keeping a close eye on the 150 day smooth and 50 day moving averages in the cash) and I will be looking for us to test support at the daily pivot (1214.25) to the TOV where I will be a buyer. If we cannot sustain trade above the daily pivot I will turn seller and then be looking for the market to fill the Gap and then possibly test the HVB and support at 1202.50 where I will be a buyer at those areas. Failure to hold support at 1202.50 I will turn seller and then be looking for a test of support below at 1190.50 where I will be an aggressive buyer. If we cannot sustain trade below resistance at 1226.25 I will turn buyer (the cash will then be above their 150 day smooth and 50 day moving averages) and I will be looking for a test of resistance above at 1238.00 where I will be an aggressive seller. Have a great day!

Written by Anthony Crudele

The bears continue to press the bulls and the bulls continue to push back. The Nasdaq futures are currently trading below their 200 day moving average. That is important because the bulls have been leaning on the Nasdaq for upside leadership and now the Nasdaq is starting to break down. If the Nasdaq remains below their….. 200 day moving average I think that the pressure will remain on the bulls. The Dow is currently holding above their 200 day moving average. They are the only major market still trading above their 200 day moving average. If the Dow fails to sustain trade above their 200 day moving average then I think that we could see rapid declines across the major markets. If the Dow can sustain trade above their 200 day moving average then I think that we could see the major markets start to grind back up. The S&P cash is currently trading near their 150 day smooth moving average and their 50 day moving average. I think that this area is very important for the market. If the S&P cash cannot hold these areas then I think that will be very bad news for the bulls and we could see all of the major markets selloff. If the S&P cash can hold this area then I think that we could see the market start to work its way back up. The Transports are currently holding above their 150 day smooth moving average and their 50 day moving average. They are not as close as the S&P cash is to theirs but if they start to fail to hold this area that would be bearish action and we could see the major markets start to selloff. If they can hold this area then we may start to see the major markets start to work their way back up. Today I will be initially watching to see how we open around 1217.75. If we open below it I will be a seller (keeping a close eye on the moving averages in the cash) and be looking for the market to test yesterday’s low (1212.50) and then look to possibly test support below at 1206.75 where I will be a buyer. Failure to hold 1206.75 I will turn seller and then be looking for a test of support below at 1195.50 where I will be a buyer. If we cannot sustain trade below 1217.75 I will be a buyer and then be looking for a test of the BOV and then possibly a test of the daily pivot at 1228.75 up to the POC where I will be a seller. If we cannot sustain trade below the daily pivot I will turn buyer and then be looking for a test of resistance at 1239.75 up to the TOV where I will be a seller. Have a great day!

Written by Anthony Crudele