Weekly Futures Recap With Mike Seery

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.

Coffee Futures

Coffee futures in New York hit another contract high last Wednesday at 209.75 before profit taking ensued closing around 198 in the May contract still continuing its bullish momentum closing higher by about 200 points for the trading week. The chart structure in coffee has finally improved to a point where you can actually put a realistic stop loss as the new 10 day low is at 181.50 and if your still long this market that is where I’m recommending to place your stop loss which is still about 20 points away equaling around $7,500 per contract. As I’ve written about in many previous blogs I received emails from producers in Brazil stating that their coffee crops were devastated and they were even worried about the possibility of a terrible crop next year as coffee is grown on trees unlike soybeans or corn which are planted every year so this could have a lasting effect on coffee prices, but remember all trends come to an end and there is always time to take profits so continue to move up your stop loss booking in profits. In my opinion I believe this drought was very severe as they were looking for 56 million bags during harvest time and that number could be significantly lower so only time will tell to see how much impact the drought In central Brazil will have on the final crop output. Coffee futures are still trading above their 20 and 100 day moving average as I still think prices head higher with the possibility of 2.50/2.70 in the next 4 weeks so continue to play this market to the long side making sure that you place your stop at 181.50 as an exit strategy.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Sugar Futures

Sugar futures in the May contract hit a 2 week low this Friday afternoon finishing down about 55 points to close right around 17.25 hitting the 10 day low which was standing at 17.41 so at this point in time I’m not recommending any positions in sugar and if you have been following that recommendation the breakout was at 16.58 getting stopped out today at 17.41 so the trade was a small winner but when prices hit 10 day lows it’s time to move on and wait for better chart structure to develop. Sugar futures have rallied about 350 points in the last 6 weeks so this week’s decline is not shocking to me that you might see a retracement but I’m not recommending a short position in sugar at this time so sit on the sidelines. Sugar futures are trading below their 20 day but above their 100 day moving average by only about 40 points which tells you the trend now currently is mixed so look for other trending markets and just keep an eye on sugar.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Soybean Futures

oybean futures in the November contract are trading above their 20 day moving average just barely at 11.66 and their 100 day moving average trading near 5 month highs going out this Friday afternoon in Chicago at 11.73 finishing down $.07 for the trading day and for the trading week losing about $.15 as the chart structure in the November contract is outstanding at this given time & I have been recommending a long position in soybeans placing a stop below the 10 day low which is very close currently at 11.64 risking around another $400 from today’s level.

The grain market has been extremely volatile and I do believe soybean prices are headed higher this Spring, but you must have a risk management system in place in case you are wrong because if we do have a terrific crop this year you will see prices go lower but as a technical trader & a short-term trader the trend is higher currently as with many other commodity markets. 2014 certainly looks like a bullish cycle in my opinion while 2013 was very bearish the grain market except for soybeans but there is a lot of demand for this product and if you’re looking at what happened in the May contract this week dropping $.95 doing about a 50% retracement from the recent lows to the highs with extreme volatility and this is just my opinion but I do believe that May and July soybeans will rebound from this recent collapse.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT In November

Cotton Futures

Cotton Futures in the May contract rallied slightly this trading week going out at 92.25 right near contract highs as the breakout occurred last week when prices broke above 90 and if you’re in this trade on the long side my stop is at the 10 day low which is right at 88.00 which is about 400 points away or $2,000 per contract, but the good news is that stop will be raised on a daily basis as the chart structure has been consolidating in the last 6 trading days. The trend in cotton clearly is higher but can be a very volatile commodity, so make sure you do have some type of stop loss if you’re involved in the futures market, but my next level is another retest of the contract high which was hit in Thursday’s trade at 93.75 & if that level is broken I believe cotton has a chance to hit 100 here in the next several weeks as we start to enter Spring planting. The next major crop report isn’t until April so traders will keep an eye on the weather as the volatility should increase dramatically in my opinion. Cotton futures are trading above their 20 and far above their 100 day moving average which tells you that the trend is strong to the upside so continue to trade with the trend.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Orange Juice Futures

Orange juice futures finished lower for the 3rd consecutive trading session and for the week down about 500 points at 149.50 in the May contract reversing much of last week’s sharp gains & I have been recommending a long position in orange juice and I still believe the trend is higher as I would place my stop if you took my recommendation below the 10 day low of 144 which currently is around 600 points away or $900 per contract. Orange juice futures broke out of a 14 week consolidation and that was my reasoning behind buying the futures market and the longer the consolidation the more powerful the move, however this move fizzled out here in the last several days ,however I will keep my stop at that point and that stop will be raised next week if prices stay stagnant or start to rise once again as the next major resistance is at 156 and you could be assured that there are plenty of buy stops above that level so keep your eye on 156 as a possible reentry for more contracts. Orange juice futures are trading right at their 20 day but still above their 100 day moving average which tells you the trend is mixed at the current time, however, since the chart structure has been so tight in recent months this is not an unusual occurrence so continue to play orange juice on the long side as long as prices don’t break 144 on a closing basis
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Corn Futures

Corn futures are trading above their 20 and 100 day moving average settling at 4.86 Friday afternoon still right near 4 month highs as the trend continues in my opinion as with the rally in oats and the wheat market its making corn prices look cheap. The chart structure on the daily chart is outstanding at this time raising the probabilities that a bottom has developed and I do think $5 a bushel is coming soon in the December contract. The 10 day low currently stands at 4.70 risking around $.15 from today’s level or $750 and that stop will also be raised as I’m recommending a long position either in the futures contract or look at July bull call option spreads limiting your risk to what the premium costs also allowing you to deal with daily fluctuations without getting stopped out.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Wheat Futures

Wheat futures in the May contract continued their bullish run rallying 33 cents for the week to close at 6.87 a bushel as dryness in certain parts of the Great Plains is causing crop concerns pushing wheat prices near 4 month highs. If you are long this market I would place my stop loss at the 10 day low of 6.10 risking around 80 cents or $4,000 dollars per contract as the trend is clearly higher. Wheat prices are trading above their 20 & 100 day moving average stating that the trend is strong and if you think wheat prices are going higher look at the July bull call option spreads limiting your risk to what the premium costs. Volatility is extremely high currently with a 20 cent move happening on a daily basis so make sure you have stops placed.
TREND: MIXED
CHART STRUCTURE: AWFUL

Oat Futures

Oat futures in the March contract which expired this week hit all-time highs right near $6 a bushel which is an amazing statistic in my opinion while the May oats are currently trading at 4.42 a bushel basically unchanged for the trading week as extreme volatility has entered this market and I’m recommending to sit on the sidelines and wait for better chart structure to develop as this market is moving $.20 --$.30 on a daily basis and in my opinion has lifted up wheat and corn prices
TREND: HIGHER
CHART STRUCTURE: AWFUL

Live Cattle Futures

Live cattle futures are trading near all-time highs closing at 145.15 a pound in the April contract closing up 150 points this Friday in Chicago as the cattle market still looks bullish in my opinion I’m still recommending a long position placing your stop below the 10 day low which currently stands at 142.60 risking around 260 points are a little over $1,000 per contract as I think a real possibility that cattle prices can trade up to 155 in the coming weeks as hog prices have caught fire in recent months and that will push up beef prices as well. Cattle futures are trading above their 20 and 100 day moving average with outstanding chart structure allowing you to place a tight stop & on Thursday that stop was almost triggered but prices reversed very quickly and I think now are resuming their uptrend so continue to play the cattle markets to the upside as higher prices are coming in my opinion.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Feeder Cattle Futures

Feeder cattle prices for the April contract basically finished unchanged for the trading week while still having outstanding chart structure on the daily chart and I’m still recommending a long position as prices should continue to hit all-time highs next week placing my stop below the 10 day low of around 171 risking around 250 points for $1,250 per contract as the trends remain very strong in the meat sector as I think prices have been consolidating in the last 2 weeks but this market has been one of the strongest in the last year and I do believe the top has not been formed as volatility remains relatively low despite the fact that prices are all-time highs which usually means extreme volatility but until that extreme volatility shows up I remain bullish. Feeder cattle futures are trading above their 20 and 100 day moving average and if you look at the charts it continually grinds higher to the upside and I like markets that do that and this is all based on the demand/ supply situation which is extremely tight meaning very low supplies.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Lean Hog Futures

Lean hog futures have exploded in recent weeks and I’ve been recommending a long position for quite some time and I’m a little disappointed because I got out early as prices have exploded to the upside currently trading at 119 a pound which is absolutely remarkable in my opinion and at this point if you’re still long futures contracts just make sure that you tighten up your stop making sure that you book profits but if you’re not in this market I would sit on the sidelines and wait for some better chart structure to develop. The hogs are a perfect example why you want to be a trend follower as prices broke out at 92 on January 10th and now prices are trading at 119 so anybody who’s been fighting the trend has really suffered heavy monetary losses so remember always trade with the trend.
TREND: HIGHER
CHART STRUCTURE: AWFUL

Cocoa Futures

Cocoa Futures--- Cocoa futures in New York this week hit 2 ½ year highs settling slightly higher right around 2992 as strong demand for this product continues to push prices higher and you look at the chart structure its outstanding at the current time & I’m recommending buying cocoa placing my stop loss below the 10 day low of around 2895 and that stop will be raised on Monday up to 2917 so the risk reward situation is highly in your favor in my opinion. If you buy cocoa at today’s price in the May contract at 3000 your risking around 63 points which is $630 per contract as cocoa can become very volatile like you’ve seen in coffee futures so when a special situation like this develops I think you always have to take that trade understanding the fact that the risk is relatively small depending on your account size. Cocoa futures traded in a sideways pattern in the last 3 weeks and have broken out in Wednesday’s trade continuing its bullish momentum as prices are still trading above their 20 and 100 day moving average so trade with the trend and stay on the long side as long as cocoa prices don’t cross 2917. The next major resistance in cocoa prices is 3200 which was last seen in August 2011 as prices could still move higher even from these lofty levels as the highest price we’ve seen in over 25 years was $3800 which was hit about 3 years ago.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Where Should You Place Your Stops? Identifying where stops exist in the market is an important lesson to learn because placing a correct stop loss that will improve your trading tremendously over the course of time. Nobody knows for sure where stops are located, however I have learned a couple of things over my 20 year career and I have a general idea where stops are placed and why. Buy stops are generally placed above the 10 day high as well as above contract highs as the bulls generally are buying more and the short selling are getting stopped out.

Sell stops are usually placed at the 10 day low as well as below contract lows which means the shorts are adding to their position and the longs are getting stopped out as they figure they are wrong. The other common places to have stops are at certain moving averages such as the 20 or 100 day moving average where traders think either the trend is turning bullish or the market is starting to break down. Placing stops to close or not at important price levels can get very frustrating because the market can stop you out and then go the direction that you thought leaving you behind and out of the market. Placing stops is one of the most important aspects of trading in my opinion.

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

SEERY FUTURES ACCEPTS CANADIAN COMMODITY ACCOUNTS

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. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: (800) 615-7649


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