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.
10 Year Notes
The 10 year notes in Chicago this week sold off sharply due to the fact of Janet Yellen’s testimony stating that bond purchases that the Federal Reserve has been doing for several years now will come to an end in September with the possibility of rates rising 6 months after that date sending the yield on the 10 year note to 2.77% & in my opinion I think the bond market has started their bearish trend. Prices are trading below their 20 and 100 day moving average hitting an 8 week low and I’m recommending selling the futures contract at today’s price placing your stop above the 10 day high at 125 risking around $2,000 per contract as the trend has turned bearish and I think this could be a special situation as interest rates look to finally start to rise after years of record low rates.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
5 Year Notes
The 5 year note finished down sharply this week trading below its 20 and 100 day moving average hitting 8 week lows now yielding 1.71% as a quadruple top has been formed around 120 and I’m highly recommending a short futures position in this market as I think interest rates are on the rise and if you look at the 5 year daily chart it looks very bearish in my opinion. If you’re a long-term investor & you’ve been reading any of my previous blogs I have been bearish the 5 year note for months and I think if you have deep pockets this is a special situation for you to sell the futures contract and take advantage of these ridiculously low rates as yields will rise over the next several years in my opinion.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Silver Futures
Silver futures in the May contract finished lower for the 5th consecutive trading session hitting a 4 week low currently trading at 20.34 and is now trading below its 20 and 100 day moving average and I’ve been recommending a long position in this market for quite some time and we were stopped out so I’m sitting on the sidelines waiting for a better chart pattern to develop, however if you’re longer-term trader with deep pockets I would continue to look at buying silver in the $19 – $20 range as I think eventually prices go much higher but as a trader I must have an exit strategy. Sit on the sidelines and let’s see what develops as the U.S dollar rallied sharply off of the Federal Reserve comments that interest rates might rise therefore putting pressure on the precious metals this week.
TREND: LOWER
CHART STRUCTURE: SOLID
Coffee Futures
Coffee futures in New York finished lower for the 6th consecutive trading session finishing lower by about 2800 points for the trading week hitting a 4 week low in today’s trade and if you followed my recommendation in yesterday’s blog when prices hit 181 which was the 10 day low I was recommending to take profits and move on as this market remains neutral at this time so sit on the sidelines and wait for better chart pattern to develop. Prices are trading below their 20 day but above their 100 day moving average telling you the trend is mixed and as I stated yesterday I believe a possible good entry to get long this market is around 160 level which is about the 50% retracement from recent lows to highs as I don’t believe this bull market is over it was just overextended to the upside. I keep in contact with several Brazilian coffee producers and they still believe that the crop is devastated and prices eventually will move higher so look for a possible entry point below the market as prices still remain weak finishing down over 300 points this Friday afternoon right near session lows.
TREND: MIXED
CHART STRUCTURE: POOR
Sugar Futures
Sugar futures were down about 35 points this week hitting a 4 week low as prices continue to the downside and I still remain neutral this market as I’m waiting to see better chart structure as the trend currently is mixed so look for some other commodity that has a strong trend and just keep an eye on sugar at this time. The 50% retracement from contract lows of around 15.00 to the recent 4 month highs that were hit earlier in the month was 18.50 which is about 350 points divided by 2 equaling 175 points so currently the 50% retracement is at about 16.75 which is just an eyelash away so if you’re looking at possibly getting long this market look to buy around that level. Sugar futures are trading far below their 20 day and right at the 100 day moving average as the next support levels are all the way down at 16.00.
TREND: MIXED
CHART STRUCTURE: SOLID
Soybean Futures
Soybean futures in the November contract which will be harvested this fall and is considered the new crop finished down $.14 Friday afternoon closing at 11.76 a bushel trading right at its 20 day but still above its 100 day moving average unable to break $12 a bushel in Thursday’s trade getting as high as 11.98 before selling off and if you took my recommendation to be long the soybeans place your stop at the 10 day low which currently stands at 11.67 risking around $.10 or $500 per contract. The grain market certainly has turned relatively weak as soybeans may have topped out in the short term but I will continue to place my stop at that level risking very little but ever since the announcement came out from the Federal Reserve that interest rates might start to move higher the commodity markets took a hit and went south quickly as soybeans have still rallied over $1 from contract lows that were hit just a couple of months ago and if you are stopped out at 11.67 sit on the sidelines and wait for another trend to develop.
July soybeans which is considered the old crop which was harvested last year could have a possible double top as Thursday’s prices hit 14.29 which was the exact contract high which was hit a couple weeks ago before selling off $.50 in the last 2 days trading at 13.80 a bushel still trading above its 20 & 100 day moving average finishing up about $.10 for the week as this contract has extreme volatility & huge price swings and that will continue for the rest of the year in my opinion. I’m still recommending this year to play into the November contract which is less volatile than the old crop and I think it’s better suited for many more investors so follow the November on the daily chart.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Cotton Futures
Cotton futures this week in New York continued their bullish momentum trading above their 20 day & now is trading 900 points higher than their 100 day moving telling you the trend is very strong to the upside settling last Friday 92.20 and going out today around 93.50 over 100 points this Friday afternoon. The chart structure in cotton is outstanding at the current time so if you’re looking to get into this market I would play it to the long side placing my stop below the 10 day low which currently stands at 90.40 risking around $1,500 per contract as the next major resistance is between 95 – 100 and I think there’s a very good possibility that prices could even trade higher than 100 in the next month or so. Cotton prices have remained strong despite the fact that much the commodity market sold off this week including the grain market due to the fact of higher interest rates but that just shows you that this bull market should continue here in short term in my opinion so continue to look to buy dips.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Orange Juice Futures
Orange juice futures in the May contract are trading around 153 this Friday afternoon settling up about 350 points for the trading week continuing their bullish trend higher, however this market has had very little volatility in the last couple weeks as now the 10 day low has been moved up to 149 which is only about 400 points or $600 from today’s price. The chart structure is outstanding in orange juice at this time as prices are still trading above their 20 and 100 day moving average telling you that the trend is still higher so continue to play this to the upside as long as prices stay above 149.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Corn Futures
Corn futures in the December contract which is considered the new crop and will be harvested this fall finished slightly lower this afternoon in Chicago finishing at 4.80 a bushel still trading above its 20 and 100 day moving average which tells you that the trend is currently higher, however corn did finish down about $.05 for the trading week. I’ve been recommending a long position in corn for quite some time and in you have been following my recommendation I would place your stop below the 10 day low of 4.74 a bushel risking only 6 more cents or $300 per contract as prices have stalled out right near 4 month highs. If you are stopped out at 4.74 sit on the sidelines and wait for another trend to develop as the trend would then become mixed and as a commodity trader you want to find strong trends instead of markets that are choppy.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Wheat Futures
Wheat futures in the May contract sold off this Friday afternoon by $.12 to close at 6.92 a bushel finishing higher by about $.10 for the trading week still trading above its 20 and 100 day moving average and has been in a strong bull market recently rallying over $1. 60 in the last 2 months due to the fact of dryness in many parts of the Great Plains which is causing crop concerns pushing prices higher. If you are long a futures contract I would place my stop at the 2 week low which is at 6.37 risking around $.55 or $2,250 per contract as the chart structure is very poor at this time but will improve on a daily basis as volatility in this market is very wild at this time. If you’re in the wheat market currently make sure you under trade because the price swings are very violent which will allow you to deal with daily fluctuations without risking too much of your account balance at the same time.
TREND: HIGHER
CHART STRUCTURE: AWFUL
Cocoa Futures
Cocoa futures are trading right at their 20 day but above their 100 day moving average finishing lower by about 20 points this week closing around 2960 still continuing its uptrend with very tight consolidation over the last 8 weeks and I have been recommending a long position as I still think you take a shot at this market to the upside while placing your stop loss at 2917 risking around $500 per contract at today’s price. Many of the commodity markets went lower this week because of higher interest rates which is generally pessimistic commodity prices in the long run, however as a technical trader I still look at this market not hitting 2 week lows so I will still play this on the long side making sure that you have some type of exit strategy.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Feeder Cattle Futures
Feeder cattle futures in the May contract are trading above their 20 and 100 day moving average hitting all-time highs in Thursday’s trade only to selloff finishing lower by about 150 points for the trading week and I’m still recommending a long position in feeder cattle placing my stop loss below the 10 day low which currently stands at 174 risking around 250 points or $1,300 as the trend remains strong to the upside in my opinion. Many of the commodity markets were lower this week due to the fact of higher interest rates but the cattle markets withstood that storm as herds are at 6 decade lows and that is really what has propelled prices in the last 6 months because supplies are extremely tight.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Cattle Futures
Live cattle futures are trading above their 20 and 100 day moving average currently trading at 144.40 a pound slightly lower for the trading week and I’ve been recommending a long position in cattle for quite some time and if you been listening I would place my stop loss at the 10 day low which is at 142.60 which is about 180 points away or $720 per contract as the chart structure remains very tight. Cattle prices hit all-time highs in Thursday’s trade only to selloff finishing lower as traders are wondering if that’s a possible short-term top and a possible double top on the daily chart as prices went back to that level in early March and failed as well but I still think as long as prices hold 142.60 you continue to play this to the upside. The meat complex is very strong as hog prices have absolutely exploded to the upside and I still think that is going to push cattle prices even higher as were entering spring and summer which is traditionally the high demand season for beef.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Natural Gas Futures
Natural gas prices are trading below their 20 day but above their 100 day moving average in the April contract telling you that the trend is mixed as prices have broken down recently hitting a 7 week low in last Fridays trade as warm weather is on the horizon. The trend has turned negative at least here in the short term as I would sell a futures contract at the break out of 4.40 and place my stop loss at the 2 week high which currently stands at 4.73 risking around $3,300 if your trading the large contract or $850 dollars in the mini contract as the chart structure is very solid allowing you to place a tight stop loss minimizing risk. The long term trend is higher in natural gas as prices rallied to 5.20 last month due to the cold weather however I am trading with the short term trend which is lower while making sure that the chart structure is solid before entering so currently this meets criteria.
TREND: LOWER
CHART STRUCTURE: SOLID
Mexico Peso
The Mexican Peso was up 30 points this Friday afternoon closing at 7520 trading near 8 week highs breaking out to the upside in my opinion as I’m now recommending a long position in the Mexican Peso at today’s price of 7520 placing my stop below the 10 day low which currently stands at 7450 risking 70 points or $400 per contract. As a technical trader the only reason I want to buy this market is because the risk /reward is in your favor and whenever that situation occurs I believe you have to take the trade even if you have doubts. The Mexican Peso is a very trendy currency just like many of the commodities as it will start a trend and go in that direction for quite some time as I’ve had experience with this in the past, so take a chance on this currency making sure that you place a tight stop
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
DO YOU OVER TRADE?---If you follow this rule you will have a chance of being successful over the course of time, if you don’t follow this rule you will be sure to lose your money quickly. This rule is simple Do Not OVER TRADE EVER for this is an easy way to lose all your capital quickly. My definition of over trading is risking too much money on any given trade, for example if you are trading a $100,000 dollar account and you place a gold trade today you should limit your loses to 2% of the account value which in this case is $2,000 which allows you to be wrong on many trades and still be around to play another day. In futures and option trading you will have losing trades that is for certain so make sure you manage those losses and move on to another trade.
DO YOU HAVE A GAME PLAN? ---This rule is very simple and it states that one must have a game plan and use it consistently even during periods of loses which will happen to you over the course of time. Do not suddenly start to risk 5-10% because you have to catch up and get your loses back quickly, stick with the game plan and over the course of time this will help improve your percentages of success. If you have an unproven system that has not been tested then I would look to paper trade the account until you see success and you are comfortable with loses and daily volatility.
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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