Whether you're trading full-time or part-time, trading the markets is a business. Create a plan to determine what trading opportunities suit your lifestyle and work life. Know what kind of trader you are - or want to be, and then engage the markets with a pre-defined trading strategy.

• Swing trading vs. Day trading
• Trading opportunities that suit you
• Time saving tips
• Using a defined trading strategy

Register now to join us on May 16, 2012 at 7pm CDT for the Trading Opportunities for Busy People webinar.

Understand how professionals utilize sound trading strategies to guide them in and out of the markets. What are the key components of a trading strategy, and how can you learn to master price action to determine precise entries, stops, and profit targets.

• Key components of a strategy and why you need one
• How technical analysis differs from trading strategy
• Why is price action so important?
• How to implement a trading strategy

Register now to join us on May 30, 2012 at 7pm CDT for the Futures Trading Strategy webinar.

After some physical demand talk overnight (talk of tightening gold supply) from China and India, June gold has found some support near the $1550.0 an ounce level. The yellow one overnight hit its lowest level since December 29th due to recent uncertainty Greece might leave the EU. I must admit gold looks "UGLY" on the daily and monthly charts; however, I truly believe the next "BIG" move from these levels is going to be from the upside. Once again, I’m not saying that this is definitely the bottom, but I believe June gold is significantly closer to the bottom than the top of the range. If the shinny one cannot hold the $1550.0 an ounce level, then I believe we are prone to test $1525.0 an ounce or even last year’s July low of $1498.1, both which are highlighted below on my RJO Vantage daily gold candlestick chart. Instead of trying to catch a falling knife in the futures market, I would suggest for you gold bulls to buy some July or August call spreads. I suggest buying the August $1640-$1680 call spread for roughly $730 per spread and has 73 days (7.26.2012) left until expiration.

If you'd like to learn more about futures trading or the Metals market specifically, please contact RJO Futures Trading Broker Nick DeGeorge at 312-373-5316 or ndegeorge@rjofutures.com.

Have we seen the bottom in natural gas for the year? That is the question that many are asking after a 27.7% rally in June natural gas futures from the low on 4/20/12 of $1.982 to the high on 5/11/12 of $2.531.

Natural gas consumption by power companies was 34% higher in February than the prior year, Energy Department data shows. Even with this large consumption increase by power companies, it has done little to fuel a major breakout in natural gas prices. According to Arun Jayaram, an analyst with Credit Sussie, in an interview with Bloomberg, power plant consumption averaged 5 Bcf higher through April 10 versus year-ago levels. While consumption has steadily increased for natural gas versus coal, it doesn’t appear that the increased demand will fulfill industry wishes of soaking up the large excess inventory, and in turn drive up prices.

Natural gas still faces a major inventory overhang. With summer temperatures predicted to be average this year, we may not see a lot of upside through the summer months. Stated by Bloomberg New Energy Finance, in order to see a material reduction in natural gas inventories a burn rate by power companies of approximately 4.5 Bcf more per day on average for the year above 2011 levels is needed. This level of natural gas consumption would shatter the record high monthly gas generation record of 121 terawatt-hours, according to Charles Blanchard with Bloomberg New Energy Finance.

Inventories of natural gas increased 30 Bcf for the week ending May, 4, according to the EIA. This was short of the consensus estimate of a 32 Bcf injection. This injection was below last year’s injection of 71 Bcf for the same time period; however, working gas in storage remained at a high of 2.606 Tcf, according to the EIA. The five year average storage level of 1.803 Tcf was dwarfed by 803 Bcf.

This short-term rally in natural gas has squeezed some of the weak shorts out of the market. While the June contract may continue to try and rally to its 100 DMA of $2.621, the $2.520 level appears to be a bigger resistance level. Long term, I don’t believe this market has found a bottom. Now is the time to establish short futures positions or option positions for the summer months ahead.

If you'd like to learn more about futures trading or the Energies market specifically, please contact RJO Futures Senior Trading Broker Kevin Craney at 312-373-5354 or kcraney@rjofutures.com.

Did you see the set-up in Crude Oil? The market is approaching critical levels, and from the looks of it we will continue to head lower. It will be great if we could just sell it, and forget about it until it hits the lows. You can’t just jump into the trade when you feel like it, and expect profit later on that day or tomorrow. In the last eView, I recommended selling the crude the day it started to fall from the 105, and called the entire move all the way down to the current levels. I enjoyed hearing from the traders who caught the move, and discussing the next move we have to look for. The worst thing you could do at this point is chase that trade for another massive move straight down, and expect it to give you $10 in one week. That trade is gone and, moving on to the next set-up is important. The biggest blunder traders get themselves into is chasing a trade days after the trade happened. That is a dangerous mentality to have in futures, and has the highest probability of sending you to the poor house fast.

Going forward, I like the downside in crude for another couple of weeks. The trade has changed all together with the most recent pullback. You need to pick spots that make sense before selling into the trade. This should be systematic in away. You should wait for short lived bounces that will come in at least once or twice a week, and then sell into them. Look to sell towards the end of the trading days, and hold them for 2 or 3 days until you feel the profit is worth taking. Manage the trade from the second you get in by using a stop. Crude oil is not the kind of market that looks for stops and then makes the move you had planned for. The volume is sufficient enough for the most part. If you find that your stops are getting hit, and you hesitate to use them then you need to pick better entry levels to get it. Impatience will destroy you in the futures. I posted a few support and resistance numbers below. In case you forgot, the crude was trading in the 70’s back in Oct 2011. It seems like the 70 range in crude was a couple of years ago. At least I feel that way, but I have a good feeling that we will get a refresher of those levels sooner than later. I encourage you to call or email me if you have any questions, or to discuss the market a little more in depth. I like to hear from other traders to see what other people think about it. I am using futures and options to trade the downside. You can use the contact information below to contact me if you need help deciding what trade to use for the downside. CRUDE SUPPORT; S1: $94.00 / S2: $91.50 / S3: $91.00. CRUDE RESISTANCE; R1: $95.60 / R2: 97.50 / R3: 99.99.

If you'd like to learn more about futures trading or the Energies market specifically, please contact RJO Futures Senior Trading Broker Timothy Haberkorn at 312-373-5087 or thaberkorn@rjofutures.com.

For the last two months sugar #11 has been in a significant downtrend, and while that could continue I think a short-term bounce could be in play. After posting a 20-month low, July sugar is now showing a loss in downside momentum as indicated by the RSI and MACD studies.

In addition to the oversold condition, the sugar market could get help from European weather and China buying which may help spark a short-term recovery. Traders can look for a complete breach of the trend line indicating a sustainable rally, but short of that look for opportunities to trade bounces while prices go through a long-term fade.

There are several strategies one can employ to take advantage of a possible move higher. I currently like a few different option strategies that give you nice upside potential but also offer you room for “error” if sugar should fail and continue lower. If you would like to discuss some ideas in the sugar market please contact me.

If you'd like to learn more about futures trading or the sugar market specifically, please contact RJO Futures Senior Trading Broker Mike Sabo at 800-367-7290 or msabo@rjofutures.com.

July ’12 Sugar Daily Chart

Source RJO Vantage

Cotton appears to be losing its fluff. I’m going to go out on a limb and say the USDA report for cotton last week was bearish. Old support has been crushed and a new range is established. The cotton bull of the past few years seems to be subsiding for the moment and it would appear the 9000 level is the new resistance.

The 1x2 July 95/100 call spread is worth about $35. If you’re still hanging on to it and like to recoup the $35 consider getting flat. New support for July cotton is 7716. Until that level is broken look to sell on rallies. Conversely, a short covering rally could be coming soon so keep risk parameters close and try not to dig your heels in.

If you'd like to learn more about futures trading or the cotton market specifically, please contact RJO Futures Trading Broker Mike Rataj at 800-453-4494 or mrataj@rjofutures.com.

July ‘12 Cotton Daily Chart

Source RJO Vantage

The past two weeks have proven difficult for many cocoa traders who every day long to taste a profit. However, there is one specific factor out of one’s control that continues to overshadow the possibility of a market that is ready to trend. One may think that such things as Mother Nature or political instability would be to blame, but in reality the thorn in virtually all the markets including cocoa is Europe and the sovereign debt crisis that keeps holding progress at bay.

It has been six months since the cocoa market has traded at levels higher than 2500. We have been stuck in range that runs from 2027 on the low end to 2500 on the high end. In a market where cocoa grindings in Europe and the United States have illustrated a continual growth in addition to reports of an overall cocoa deficit in 2012/13 it confounds so many as to why we have not taken the market to higher prices. Simply put, we are in an age where fear and money go hand in hand. Thus, when it comes to investors keeping positions in the market, the quickest way to watch them exit is to watch the equities strip the luster from commodities in general. Sadly, I do not see a cocoa market trading a true fair value until we find more stability in the outside markets. This should not frighten investors from trading in cocoa, but rather open their eyes to the pain of not paying attention to the short-term trade. One can embrace the range that I mentioned earlier to set up trades both long and short in the hopes of creating short-term gains until we do find clarity in the sovereign debt fiasco.

In the end, I do eventually see the cocoa market making headway to higher prices. Nothing stays undervalued for long, especially when demand continues to grow. Markets such as cocoa are resilient even when faced with outside forces like Mother Nature, political instability, or sovereign debt. Keep an eye on the charts and see if you can taste a profit.

If you'd like to learn more about futures trading, please contact RJO Futures Trading Broker Hector Galvan at 312-373-5364 or hgalvan@rjofutures.com .

July ’12 Cocoa (ICCN12) Daily Chart

Source RJO Vantage

July coffee steadily moves lower and continues to get pounded by a strong dollar and "less than stellar" circumstances on the equities side. We’ll continue to monitor the rainfall period over the Brazilian crop too this week, not that any of these fundamentals would outweigh the negatives for coffee at this time.

In my last eView article, I wrote that "with a recent violation of the 3/22 low of 177.30, I see no support down to the 164 levels from November, 2009." I continue to stand behind this bias and we may see some continued consolidation for awhile, but coffee will have a very tough time breaking above the 183 level. Approach the bearish side conservatively and use put options and spreads to gain exposure.

If you'd like to learn more about futures trading or the coffee market specifically, please contact RJO Futures Trading Broker Adam Tuiaana at 800-453-4494 or atuiaana@rjofutures.com.

July ’12 Daily Coffee Chart

Source RJO Vantage

It is Tuesday morning and the grain and world financial markets are enjoying a recovery following their recent sell off. Greece remains in the news headlines as political party leaders extend a meeting in an effort to form a coalition government.

Other news around the world is to keep a close eye to Chinese and Russian/Ukraine/Kazakhstan weather forecasts in the days ahead. The most concerning at the moment is the Northern Plains of China that have been in a dry weather pattern since mid April. Limited rain with above normal temperatures is forecast for key corn/soy areas into the middle part of June.

The crop condition report last night showed the corn crop at 87% planted. It is interesting to note that the only three years with faster corn planting than 2012 were 2000, 2005 and 2010. Both 2000 and 2005 posted trend corn yields, while 2010 posted a slightly below trend corn yield. We also find it interesting that with all of this bearish news the December ’12 corn is up 5 cents this morning. Next week we think soy planting will match the record of 2010 of 70% completed. There is no new news on People’s Republic of China demand news.

The Chinese are very astute at buying corn at lower prices. We think that is what we should do. Corn is a lot cheaper than 1 month ago. Look to do call spreads and /or other bullish option strategy plays on corn. Watch the 6 to 10 day weather forecast. Any hint of hot and dry can be a catalyst of rallying corn back. We know the charts on corn are negative .This time of year the chart patterns take a backseat to the weather. We think all of this bearish news is priced in corn. The next move will be higher we believe.

If you'd like to learn more about futures trading or the agricultural market specifically, please contact RJO Futures Senior Trading Broker Stephen Davis at 800-367-7181 or sdavis@rjofutures.com.

Corn Weekly Chart

Source CQG, Inc. (c) 2012. All rights reserved worldwide.

Corn Monthly Chart

Source CQG, Inc. (c) 2012. All rights reserved worldwide.

For those of you who follow my eView commentary, I put a buy recommendation out in the US Dollar Index at 78.85. The USD has extended its winning streak to 12 straight sessions assuming we close higher on today’s session amid Greek contagion fears. The USD has steadily traded higher from its most recent low seen on April 30th at 78.685, and currently resides at 81.19 on the June contract. Investors have taken a “risk-off” mentality towards global currencies as problems in the euro zone have re-surfaced. I still feel that the June USD can trade as high as 82.045, a level last seen this past January. Always be on the lookout for Fed and ECB announcements and calls for further stimulus, but it’s in my opinion that the USD will continue higher for the remainder of the month of May. Buying opportunities will arise at previously seen resistance levels. Look for a pull back in the June USD at 80.92 and 80.66 as opportunities to get long. Use a stop loss on all contracts at 80.33.

If you'd like to learn more about futures trading or the Currencies market specifically, please contact RJO Futures Trading Broker John Caruso at 312-373-5286 or jcaruso@rjofutures.com.

June ‘12 US Dollar Index Daily Chart

Source RJO Vantage

As part of our ongoing series, we are pleased to introduce the RAM Management Group, Ltd. located in New Canaan, CT in this issue’s CTA Spotlight.

Founder and President of RAM is Robert A. Moss, who brings three decades of direct futures trading experience, and has been a member of most US exchanges including; CBOE, CBOT, NYMEX, COMEX, FINEX, NYFE, Mid-West Stock Exchange, and Mid America Commodity Exchange. Mr. Moss started his career trading futures markets in 1973 under the tutelage of legendary futures traders and continues to oversee the trading of client funds today. The majority of Mr. Moss career and experience was garnered on the actual exchange floor.

RAM offers two trading programs for individual managed accounts: The RAM Conservative Program and the RAM Aggressive Program. The RAM Fund LLC is currently a client of the Aggressive Program.

The Conservative Program has an 18-year uninterrupted track record. The RAM Aggressive Program is for investors with higher risk appetites as it trades in similar fashion to the Conservative Program but at three times the monthly risk and reward of the Conservative Program.

RAM offers two trading platforms for accessibility for an investor to participate in managed futures. One is through granting RAM power of attorney to place trades in their account. This enables the investor to retain control and title to his capital. Although the managed account has a higher minimum investment, it offers daily liquidity and transparency benefits. On the other hand, an investor can choose accessing a fund structure, which offers limited liability and a lower minimum investment, but clients would give up daily reporting/transparency for monthly reporting and also must relinquish funds to the entity.

RJO: We’d like to thank RAM for participating in our CTA Spotlight, and in particular, Steve Capillo for offering his insight. If you would be so kind as to introduce yourself and tell us a little bit about RAM and its team.

Steve Capillo: My name is Steve Capillo, I hold a Series 3 license and I am a registered Associated Person with the NFA and with RAM Management Group. I live in the Chicago area and act as a marketing representative and customer liaison with RAM’s Chicago based clients.

RJO: Brief description of your trading program(s). What strategy (systematic or discretionary), trade generation (technical or fundamental), holding period, inception date etc.

Steve Capillo: RAM executes a quantitative investment model with a sound comprehensive risk management philosophy utilizing exchange traded, liquid, centrally cleared, transparent, daily market-to-marketfutures contracts. RAM's management team believes in a rule-based technical investment model using a strength/weakness, breakout,pattern recognition, and trend analysis to identify short-to-medium termopportunities, (2 days to 2 months) long or short, in over 25 markets across 7 economic sectors.The RAM Conservative Program has been trading client funds since 1993, The RAM Aggressive program began trading in 1998.

RJO: What makes your approach different from other CTAs?

Steve Capillo: What makes RAM Management unique and different from most other CTA’s is that its principals come from the futures exchange trading floors and have well over 100 years of cumulative trading experience. RAM’s proprietary risk management model limits market exposure at the contract, sector, and portfolio level. It utilizes a dynamic volatility based asset allocation.

Secondly, RAM is very trade selective; in fact 9% of the time RAM has no position at all. RAM limits its trading to approximately 28 US futures based contracts, but is only in 4 or 5 markets at a time, generally. Unlike many CTA’s we do not believe trading more contracts enables greater diversification.

Thirdly, RAM is a very capital efficient manager. 50% of the time, margin as a percentage of trading level is less than 5% and 96% of the time it is less than 10%.

Most importantly, in addition to offering potential for return, RAM has a very low correlation to traditional investments; 0.1 to Stocks and -0.1 Bonds, as well as a very low correlation to other CTAs, 0.39 to our peers as measured by the Barclay CTA Index.

RJO: What is your minimum capital requirement for your program(s)?

Steve Capillo: The Individual Managed Account has a minimum investment of $1million; however, as margin to equity averages 5% or $50,000 per $1million, notional funding is available. Notional Funding refers to funding an account without having to deposit the full trading level of the account in cash. For example, a qualified customer can open a $1m managed account by providing a brokerage account at an FCM such as RJ O’Brien with as little as $250k in cash.

The RAM Fund LLC has a minimum investment of $100k.

RJO: On what markets does your program focus?

Steve Capillo: RAM focuses their trading in seven economic sectors- energy, currency, interest rates, stock indices, agriculture, metals, and, softs.

RJO: Would you say your trading program(s) is better suited to be a stand alone or part of a multi-CTA portfolio?

Steve Capillo: We do not market RAM as a stand-alone investment. For a qualified investor, we believe that RAM makes a solid, non-correlating addition to a properly diversified portfolio. It does not matter if the portfolio is made up of more traditional investments such as Stocks and Bonds, or is a portfolio of other CTAs.

RJO: In regards to selecting a CTA or composing a portfolio of multiple CTAs, what piece of advice would you offer to a client?

Steve Capillo: Understand who you are about to do business with. Be comfortable with how the manager controls risk. Control the risk, and the good trades will take care of themselves. Make sure you construct a truly diversified portfolio containing a variety on non-correlating investments that match your risk tolerance.

RJO: We’d like to thank RAM Management Group and Steve Capillo for sharing their thoughts and information about their trading programs.

As always, we encourage everyone to check out the website: http://www.rjofutures.com/managed-futures/

In upcoming issues, we will spotlight each CTA to feature their particular area of expertise and the concepts behind their trading program(s). Anyone interested in more information regarding Managed Futures may feel free to contact me at CPeck@rjofutures.com or (312) 373-5338.

Do you have any questions or comments on this issue of eView—or anything else you'd like to discuss with our brokers?

When it comes to futures trading, what do YOU want to learn more about? If we already have a resource, we'll personally provide you access to it. If not, we might make it the topic of our next trading resource project.