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.
Silver Futures
Silver futures in the September contract settled last Friday in New York at 16.41 an ounce while currently trading at 17.35 up about 95 cents for the trading week. I’m now recommending a bullish position while placing the stop loss under the 10 day low which stands at 15.89 risking around $1.50 or $1,500 per mini contract plus slippage and commission as the chart structure will start to improve early next week. Silver prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher as interest rates around the world are hitting historic lows sending shockwaves into many markets especially the bond sector as traders are now interested in the precious metals once again as gold prices have surged as well. Negative interest rates around the world are starting to make investors skittish as they are looking for a place to hide money and that at the current time is the precious metals. I do think gold and silver prices are going higher especially if Britain leaves the EU, which could send heavy money flows into silver and gold as I see extremely high volatility coming back into this sleeping giant.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Sugar Futures
Sugar futures in the July contract settled last Friday in New York at 18.75 a pound while currently trading at 19.60 up about 85 points for the trading week continuing its bullish momentum. I've been recommending a bullish position from the 16 level, and if you took that trade, the chart structure will start to improve as the 10 day low currently stands at 17.15 as that will start to be raised on a daily basis next week, therefore, lowering monetary risk. As I had talked about in previous blogs, I thought if sugar could crack the 17 level we could be off to the races & that is exactly what has occurred as the next major level of resistance is around the 20 level which we were just an eyelash away. I still think there is more room to run on the upside. Heavy rains in the country of Brazil are delaying exports, and that is pushing prices up in the short term coupled with extremely strong demand and production cuts as who knows how high prices could go. However, if you have missed this trade you have missed the boat so move on and look at other markets that are beginning to trend. Sugar prices are still trading far above their 20 and 100-day moving average telling you that the short-term trend is higher, and that's why you must be a trend follower in the commodity markets. Trading with the path of least resistance is the way to go over the course of time in my opinion.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Wheat Futures
Wheat futures in the July contract settled last Friday in Chicago at 4.97 a bushel while currently trading at 5.07 up slightly for the trading week as traders are awaiting today’s USDA crop report which will be released at 11CT as that certainly will bring high volatility back into this market. I have been recommending a bullish position from around the 4.95 level and if you took that trade continue to place your stop loss under the 10 day low which has been raised to 4.63 as the chart structure is still poor at the current time, but will improve later next week. Wheat prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher. The fundamentals are not bullish at this point as harvest is picking up in the states of Kansas and Oklahoma coupled with ample worldwide supplies, but wheat has rallied off the coattails of the rest of the grain market which continues to move higher. Money flows have certainly come back into all commodities as interest has certainly come about as I think that will continue so continue to play this to the upside while placing the proper stop loss and let’s see what this report states.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
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
What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? I define chart structure as a slow 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 allowing you to place a stop loss 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 as I 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 loss.
Cocoa Futures
Cocoa futures in the September contract settled last Friday in New York at 3030 while currently trading at 3086 up about 55 points for the trading week right near a 4 week high as I’m currently sitting on the sidelines waiting for the chart structure to tighten up. At the current the 10 day low stands at 2976 as the risk is over $2,000 which is too high in my opinion, but that could change next week so keep a close eye on this commodity as we could be entering a bullish position any day. Cocoa prices are trading above their 20 and 100-day moving average telling you that the short-term trend is to the upside as I’m currently recommending bullish positions in sugar and coffee as I think cocoa prices have bottomed out in the short-term. The commodity markets are in a bullish trend in my opinion as all of my recommendations are to the upside, but I want to see the risk/reward is your favor before entering into a trend as this is not the case at this time. I’d like to see the risk get down to about 1,200 per contract plus slippage and commission as we could be long come Tuesday or Wednesday as the trend is your friend and the trend in cocoa at the current time is higher.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Cotton Futures
Cotton prices in the December contract are unchanged this Friday afternoon reacting neutral to the USDA crop report as I have been sitting on the sidelines waiting for better chart structure to develop as I still remain bullish. Prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher. However, the chart structure is poor as the 10 day low stands at 62.54 risking around $1,600 per contract plus slippage and commission which is too much in my opinion, but keep a close eye on this market as we could be entering into a bullish position next week. Prices settled last Friday at 63.91 while currently trading at 65.30 up about 160 points for the trading week as the commodity markets, in general, have caught fire to the upside. I still remain bullish as I do think that the U.S dollar will continue to move lower as interest rates throughout the world continue to move lower as that’s very bullish stocks, commodities, and all asset prices in my opinion so look for any kind of price decline to price into enter a bullish position while placing the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Oat Futures
Oat futures in the September contract settled last Friday in Chicago at 2.00 a bushel while currently trading at 2.16 reacting neutral to the USDA crop report. I am a technical trader, not a fundamental trader as I was recommending a bullish position from 2.08 and if you took that trade continue to place your stop loss below the 10 day low which stands 1.99 a bushel. Oat prices have hit a 6 week high as the commodity markets still remain bullish and especially the grain market as I still remain very bullish as I’m currently recommending a bullish position in wheat to the upside as I still believe soybeans and corn are all going higher so continue to play this to the upside while placing the proper stop loss. Oat prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher. I keep a simple trading style which is the way to go while maintaining risk parameters as heat is coming across the Midwestern part of the United States over the next couple weeks, and I think volatility that’s going to explode so take advantage of any price dips as the risk/reward is highly in your favor in my opinion.
TREND: HIGHER
CHART STRUCTURE: OUTSTANDING
Trading Theory
How Can You Use Moving Averages To Your Advantage? A simple moving average is calculated by adding the closing price of a commodity such as crude oil for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying commodity, while long-term averages are slower to react. I generally follow the 20 and 100-day moving averages when commodity prices break below or above in my opinion that establishes a trend which in my opinion should always be followed as the saying goes the trend is your friend. If the 20 and 100-day have crossed to the downside and you have a long position that is telling you that you are trading against the trend which can be dangerous over the course of time. I like to buy a commodity or sell a commodity when the price has hit a 20 day high or low and the simple moving average also should have crossed at that point confirming or establishing that the trend is starting.
If you are looking for a futures broker feel free to contact Michael Seery at 312-224-8140 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: 312-224-8140
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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.
