JimHuangChicago

JimHuangChicago Wizard

CBOT: Micro 10-Year Yield ( CBOT_MINI:10Y1! ) Last Friday, U.S. stocks plunged again as soaring interest rates and FX market turmoil fueled investor fears of a global recession. The Dow fell below 30,000 and closed at 29,590, down 486 or -1.6%. S&P 500 broke through 3700 and settled at 3,697, down 1.72%. Nasdaq Composite lost nearly 200 points and closed at...

JimHuangChicago Wizard

COMEX: Gold Futures ( COMEX:GC1! ) Last Tuesday, September 13th, the Bureau of Labor Statistics reported that U.S. Consumer Price Index rose 0.1% in August to an annual rate of 8.3%. Both were higher than market expectations of -0.1% and 8.1%, respectively. One tenth of one percent didn’t seem much, but it refuted the mainstream notion that inflation has already...

JimHuangChicago Wizard

When the Russia-Ukraine conflict first broke out, world markets were in a complete shock. Equities fell and commodities rose as geopolitical tension became the dominant price driver. As fighting dragged on from weeks to months, other important factors took over. Besides the traditional supply and demand variables, we have witnessed a record shattering inflation...

JimHuangChicago Wizard

WTI crude oil is currently trading at $83 a barrel. Who would have thought that with OPEC cutting oil production and Russia shutting down natural gas distribution, petroleum would be $10 cheaper than when the Ukraine War first started? Winter is coming to global economy. And financial markets everywhere would be bracing for a deep freeze in the coming...

JimHuangChicago Wizard

This is the 2nd installment of “The Great Wall Street Repricing” series. The price of a commodity is determined by the interaction between the demand and supply of its market. This year, such interaction acts like a Tug of War. On the one hand, tight supply pushes commodity price upward; on the other hand, weak demand pulls the price back down. Commodity prices...

JimHuangChicago Wizard

Equity Indexes: CME Micro S&P 500 ( CME_MINI:MES1! ), Micro Russell 2000 ( CME_MINI:M2K1! ) On August 26th, Fed Chairman Jerome Powell declared to forcefully fight the worst inflation in 40 years. He warned that the Fed would continue raising interest rates, even if it would cause "some pain" to the U.S. economy. In an eight-minute speech at the Jackson Hole...

JimHuangChicago Wizard

CME: S&P 500 CME_MINI:ES1! ; NYMEX: WTI NYMEX:CL1! and Henry Hub NYMEX:NG1! ; COMEX: Copper COMEX:HG1! and Aluminum COMEX:ALI1! The 2020 U.S. presidential election put Democrats in control of the White House and both branches of the Congress. In the upcoming mid-term elections, if Democrats retain their majority, Joe Biden will become the most powerful U.S....

JimHuangChicago Wizard

CME:LE1! The U.S. Bureau of Labor Statistics (BLS) released July non-farm payrolls on August 5th and July Consumer Price Index (CPI) on August 10th. Both reports beat market expectations. About 528,000 new jobs were created in July, well above June level. Annualized Inflation was lowered to 8.5% from the record 9.1% in June. While strong jobs data and taming...

JimHuangChicago Wizard

CME:HE1! CBOT:ZC1! CBOT:ZM1! On August 1st, USDA Daily Hog and Pork Report shows that benchmark Iowa Carcass Base Price averages $128/cwt. This is a 15% increase year-over-year, and a whopping 70% higher than the five-year average of $75. Is pork still affordable? Meanwhile in the futures market, while August Lean Hog contract (HEQ2) is quoted at...

JimHuangChicago Wizard

CBOT_MINI:10Y1! CBOT_MINI:2YY1! The Federal Open Market Committee (FOMC) is scheduled to meet on July 26-27. Market widely expects a 75-basis-points (bps) Fed Funds rate increase, from current target of 1.50%-1.75% to 2.25%-2.50%. The call for a 100-point hike, while still feasible, is weakened after U.S. gasoline price dropped 70 cents per gallon in the past...

JimHuangChicago Wizard

CBOT:ZW1! On June 15th, I issued an options trading strategy on CBOT Wheat Futures. At the time, I expected wheat price to experience a very large move but was unsure of its direction. Consequently, I recommended a Long Strangle options strategy : Purchase both an out-of-money (OTM) call and an OTM put on September Wheat Futures. The original trading idea may...

JimHuangChicago Wizard

CME:6E1! The U.S. dollar reached 1:1 parity with Euro on Tuesday for the first time in 20 years. Wall Street may tell you that the common currency for 19 European countries has been hammered by economic woes, high inflation, and an energy supply crisis brought by the Russia-Ukraine conflict. I have a very straight-forward answer to the depreciation of the...

JimHuangChicago Wizard

NYMEX:RB1! While the U.S. stock market performed miserably lately, energy commodities have a banner year. According to the American Automobile Association (AAA), the national average gasoline price reached an all-time high of $5.016 a gallon on June 14th. Diesel logged its own record on June 19th, at $5.816 a gallon. Crude oil price hike is certainly a major...

JimHuangChicago Wizard Updated 

CBOT:ZW1! What do Gold, Crude Oil, Natural Gas, Corn, Soybeans, and Wheat have in common? Their prices all go up in a global crisis. In other words, these strategically important commodities are positively correlated with the level of risk. “Risk Up, Price Up; and Risk Down, Price Down”. Everyday non-professional traders (NonProfs) usually have a disadvantage...

JimHuangChicago Wizard

CME_MINI:ES1! In the past six months, the S&P 500 has fallen from an all-time high of 4,818.62 to a fresh 52-week low of 3,636.82, down 1,181.8 points, or -24.5%. Following a brutal week, the U.S. stock market rose on Tuesday, as investors weighed the Fed rate hikes amid rising fears of a recession. The Dow rose 2.15%. The S&P popped 2.45%, and the Nasdaq...

JimHuangChicago Wizard

CBOT:ZS1! Last week, I laid the groundwork for a new idea on event-driven strategy. Event-Driven Strategy Focusing on Global Crisis. Three-factor Commodities Futures Pricing Model and Game Theory Matrix were introduced, illustrated with my own experience trading COMEX Gold Futures (GC) during the US-China trade conflict in 2019. My idea was featured on...

JimHuangChicago Wizard

COMEX:GC1! While the US-China trade friction started in 2018, I quickly observed a pattern similar to chess moves by two Grandmasters. President Donald Trump first initiated tariff on Chinese goods exporting to the U.S. Then, President Xi of China responded by taxing imported goods originated from the U.S. Infuriated, Trump raised the stake by higher tariff rates...