We’ve asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.
Precious Metal Futures--- The precious metals were mixed today with gold in the April contract down for the 3rd consecutive day is now trading below its 20 and 100 day moving average right between the 52-week low and the 52-week high settling last Friday at 1, 693 down $37 for the week as traders are pulling money out of gold and putting it into the stock market which continues to go higher while silver futures are still trading above the 20 day moving average but below their 100 day moving average which stands at 32.67 down sharply for the 2nd consecutive day after trading higher for 8 straight sessions settling around 31.20 down over $.60 for the trading week and I still remain bullish gold and silver and in my opinion I do believe the last couple of days is just profit taking and I still see higher prices to come due to the fact of easy monetary policies remaining for 4 more years. Copper futures are still trading above the 20 and 100 day moving average very little volatility lately currently trading at 3.655 down only slightly for the week but still stuck in a sideways pattern with no trend in sight. The real story in the metals has been platinum and palladium with platinum higher by $10 today trading at 1, 694 right near contract highs trading far above the 20 & 100 day moving average looking to break through $1,700 an ounce also with palladium which continues to make contract highs up $14 today trading at 740.50 all due to the fact that the automobile industry is on fire right now which is propping up demand for these 2 products. I do believe silver and gold will catch up with platinum and palladium with platinum now trading $40 higher than gold which has not happened in several years and for decades platinum traded above gold except in the last couple years due to the fact that gold was seen as a currency or safe haven when all other asset classes were in jeopardy. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Energy Futures-- Energy futures were mixed this Friday afternoon with crude oil up around $.10 at 96.00 only settling up about $.10 for the week in a very nonvolatile trading week still trading above its 20 & 100 day moving average and is now 20% higher than the 6 – 28- 12 low of 80.48 on the fact that economies are improving around the world which is propping up demand. Unleaded gasoline in the March contract are sharply above their 20 and 100 day moving average hitting a 10 month high once again today trading higher for the 7th consecutive trading session currently trading at 2.89 and in my opinion looking to go much higher from these levels especially with news out of Iran today that they are further along on the nuclear capacity than expected. Heating oil futures in the March contract were lower by 250 points today are still trading above their 20 and 100 day moving average and they settled last Friday at 3.01 so it still had a solid week finishing higher by 400 points due to the fact that there has been cold wet weather out East and if heating oil prices can break 3.10 that will be a 3 ½ month high and that’s where I would recommend investors to buy if it breaks that level on closing basis. In my opinion I believe the energy sector is headed higher as economies are improving drastically so demand for gasoline and crude oil is here to stay especially if Iran comes into the mix and eventually they’re going to so in my opinion it’s just a matter of when and what the United States and Israel do about it. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Stock Futures-- The S&P 500 has been up 7 consecutive days finishing higher by about 5 points again today trading far above their 20 and 100 day moving average right near all-time highs currently trading at 1496 after settling last Friday at 1475 with another solid week of excellent chart structure grinding higher due to the fact that investors and retail investors are getting back into this market after being burned 5 years ago. The Dow Jones had a terrific week trading above its 20 & 100 day moving average and finishing higher for the last 6 consecutive days settling last Friday at 13, 542 up over 300 points this week again on optimism that the United States is recovering as investors don’t want to miss a rally. The NASDAQ composite however has been a different story but still trading above its 20 and 100 day moving average but basically trading unchanged for the week all due to Apple Computer dropping around $80 this week on poor earnings which pushed the NASDAQ lower compared to the S&P and the Dow, but in my opinion as I’ve stated in many previous blogs I am extremely bullish the S&P 500, Dow Jones, and the NASDAQ and eventually I believe the NASDAQ will catch up because I believe Apple Computer eventually will join the party as the economy keeps doing well I would have to think that that stock will move higher which will push the NASDAQ 100 futures contract higher as well remember trade with the trend and this is one of the best trends to the upside because it just keeps grinding higher on economic bullish news which seems to come out on a daily basis so remember don’t fight the fact and the Federal Reserve and the Obama administration is pushing the stock market higher so join the tape instead of fighting the tape. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
If you are looking for a futures or option broker feel free to contact Michael Seery at 800-615-7649 and I will be more than happy to help you with your trading or visit www.seeryfutures.com Skype Address: mike.seery3
There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor.
Grain Futures-- The grain market this week was relatively quiet compared to weeks passed with high volatility in soybeans in the March contract settled last Friday at 14.30 level up about $.08 for the trading week still trading above its 20 day moving average but below its 100 day moving average really with no trend in sight as investors and traders are keeping an eye on South American weather which at this point is relatively decent while we’re going into the critical growing season in the next 3 to 4 weeks. Corn futures were slightly lower this Friday afternoon down about $.03 for the trading week above their 20 day moving average but below their 100 day moving average and in my opinion I believe the grain market has bottomed but I believe you will see some choppiness in weeks ahead. Wheat futures in the March contract breaking a three-day slump up $.08 today right at its 20 day moving average for far below its 100 day moving averages which stands at 8.50 down only about $.04 for the trading week really with very little fundamental news to dictate prices. I like to follow the trend and right now the trend in the grains is pretty neutral I would like to see if further consolidation of prices will a possible 8-10 week consolidation and then look to get into this market but at this point is markets are relatively choppy and if you trade choppy markets you get chopped up meaning generally you lose and when you trade a trendy market you do much better because if you look at some of these trends like the yen which goes down every single day and the stock market which goes up every single day rewarding trend followers so those are the kind of markets you want to focus on. TREND: MIXED –CHART STRUCTURE: EXCELLENT
Cotton Futures--- Cotton futures had high volatility for the 1st time a long period with the March contract trading far above its 20 and 100 day moving average settling last Friday at 77.78 and settling this week at 81.00 hitting a 9 month high all due to the fact that the firm Informa had come out earlier in the week and stated that cotton will plant 2 million less acres this year due to the fact that more acres will be planted to corn and soybeans pushing cotton prices sharply higher while demand for this product is exploding with 82% of the marketing year already sold and were still only in January, however with the current surge in prices that could stem some of the export demand. I am bullish cotton and as I’ve written in many previous blogs I believe cotton is going higher possibly in the mid-80s and we got up 84.00 yesterday before profit taking took place and this Friday afternoon with cotton finishing down 200 points at 81.00 and at this point in time I think you will see a consolidation of the latest rally as we had into spring time. Cotton futures in early February of last year traded as high as 98.50 so we are still a good distance away from the contract highs and traded as low as around 65.50 and I do not believe you will see cotton prices down at those levels for a long time. If you look at cotton on the yearly or weekly chart it has tremendous chart structure bottoming at 65 and then bottoming several months ago at 70 continuing its up move so I’m advising traders at this point in time to get long the cotton market making sure that you do place a stop loss in case you are wrong trying to minimize your risk to 1 or 2% of your account balance on any given trade. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Coffee Futures--- Coffee futures had a wild trading week ending this Friday up 150 points to close at 148.00 a pound and but is still only 4% of its contract low of 141.25 which was hit on 12 – 31 – 12 settling last Friday at 155 hitting an 8 week high before traders booked profits pushing coffee prices back down into the middle of the trading range still stuck in a sideways pattern, however in my opinion I have been bullish coffee prices and there has been reports of rust on the trees and leaves in Central America which could impact the harvest next year and I still believe these prices are very low especially with economies around the world expanding rapidly therefore I have to think that coffee consumption will also rise while these are the lowest prices in several years remembering that coffee prices in 2010 hit 300 and now have been cut in half due to the fact of ample surplus coming out of Brazil plus the fact that demand just wasn’t there but I think that will change in the year 2013 especially if the rust problem does develop next year with possible estimates of crop loses as much as 30% and if that actually does come to fruition that could push prices sharply higher from these recent levels. Many of the crops around the world including Columbia are reportedly in good conditions that are keeping a lid on prices I do believe however that prices will grind higher going into the frost season with volatility spiking up tremendously. If you are bullish the coffee market my recommendation is to buy 1 futures contract in the March delivery placing a stop below the contract low of 141.25 risking around $2,500 per contract remembering that coffee is a very large contract one of the largest in the commodity markets that is why you still have to risk that amount of money but if you are right on the trade the reward will be very large as well. TREND: MIXED –CHART STRUCTURE: EXCELLENT
Orange Juice Futures--- Orange juice prices settled basically unchanged this Friday afternoon still stuck in a 3 week sideways channel with major support between 110 – 107 still consolidating the big selloff it had of last month when it traded as high as 145 then sold off all of the way back down about 110 right now it’s at its 20 day moving average but below its 100 day moving average which is at 120 and if that level is broken you will see some new fund buying pushing prices back up into the mid-range and in my opinion the same problem with happened in coffee, sugar, cocoa, and orange juice which have all been in a bear markets in the last 6 months but eventually things turn around and I believe orange juice prices down at these levels are very attractive if you’re a longer-term investor. Prices can off the highs in the last due to the fact that there is going to be no frost in the state of Florida this year and the cold-weather in California has not affected the citrus crops so the price premium has come out of this market and now the focus is on the spring and summer demand. If you’re looking at possibly enter a trading position on the long side my recommendation would be to buy the futures contract for the March delivery and place a stop below the contract low which is 106.75 which was hit 10/31/12 we are still about 5% from hitting those contract lows placing a stop there would approximately risk around $1,200 per contract if you are wrong on the trade remembering to always try and minimize risk. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Sugar Futures--- Sugar prices ended the week on a sour note finishing down 11 points at 18.38 right near a fresh 2 ½ year low as the possibility of a record harvest coming out of Brazil and crops around the world looking very good pushing prices to levels we haven’t seen since 2010 when prices went down to about 14.50 and in my opinion I have a hard time believing that sugar will get down to that level especially with the price of corn and unleaded gasoline at recent highs which generally can also influence sugar prices. The contract low in sugar is 18.06 and it bounced off that rally quickly which now is the next support level all due to the fact of a solid harvest coming out of Brazil. With excellent crops around the world especially in Brazil and waning demand at this time sugar still looks vulnerable even at 2 ½ year lows in my opinion. TREND: LOWER –CHART STRUCTURE: EXCELLENT
What do I mean when I talk about chart structure and why do I think it is so important when deciding to enter or exit a trade? I define chart structure as a slow and grinding up or down trend with low volatility and no chart gaps. Many of the great trends that develop have very good chart structure with many low percentage daily moves over a course of at least 4 weeks thus allowing you to enter a market and allowing you to place a stop loss with will be relatively close due to small moves thus reducing risk. Charts that have violent up and down swings are not considered to have solid chart structure but markets that continue to trend like the current soybean complex allowing for you to place close stops as it continues to fall dramatically. I always like to place my stops at 10 day highs or 10 day lows and if the charts have a tight pattern that will allow the trader to minimize risk which is what trading is all about and if the chart has big swings your stop will be further away allowing the possibility of larger monetary loses.
If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor.
Michael Seery, President
Seery Futures
Twitter–@seeryfutures
Phone # (800) 615-7649
