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.
Gold Futures
Gold futures in the December contract settled last Friday in New York at 1,310 an ounce while currently trading at 1,345 up about $35 for the trading week remaining extremely choppy as prices have gone nowhere over the last 3 months. Earlier in the week the Federal Reserve made comments that they will not raise interest rates as prices held major support around the 1,310 level and now looks to retest the upper end of the trading range around 1,360 as I’m currently sitting on the sidelines waiting for a trend to occur. Gold prices are trading above their 20 and 100-day moving average telling you the short-term trend is higher as the commodity markets in general in my opinion look to be bottoming. I see the next move to the upside across-the-board as the Federal Reserve, in my opinion, will not raise rates in 2016 as they want to see asset prices go higher. At present, I have no precious metal recommendations as the markets remain choppy because the Federal Reserve keeps flip-flopping on interest rates as I hope that will stop so then the market can start to trade in a natural fashion as the trends will come back eventually.
TREND: MIXED
CHART STRUCTURE: POOR
Silver Futures
Silver futures in the December contract are trading above their 20 and 100-day moving average experiencing above normal volatility as prices reacted very positively to the Federal Reserve’s comments about interest rates as the precious metals were sharply higher earlier in the week. Silver prices settled last Friday at 18.86 while currently trading at 19.80 about $1 for the trading week but remains in a choppy trend as prices really have gone nowhere just like the rest of the precious metals as I’m currently sitting on the sidelines. The chart structure is poor presently with large price swings up and down on a daily basis so it might be some time before we enter into a new position. However, I do think that the commodities, in general, look bullish. The U.S dollar has also been in a sideways pattern over the last 6 months lending very little guidance to the commodity markets as we’re still waiting for a trend to develop in that currency. Major resistance in silver is around the 20.25 level as that will have to be broken for this market to regain its bullish trend; however, that price level is just an eyelash away.
TREND: MIXED
CHART STRUCTURE: POOR
Crude Oil Futures
Crude oil futures in the November contract settled last Friday in New York at 43.62 a barrel while currently trading at $45.00 up over $1 for the trading week but remains in a very choppy sideways channel as many of the commodity markets are presently. Crude oil prices are trading below their 20 & 100-day moving average as the U.S dollar continues to flip flop on a daily basis as that causing the herky-jerky motion in crude oil prices over the last several months. Saudi Arabia talked about possibly putting a freeze on the oil production if Iran had agreed, however, these deals are so bogus, they make me laugh so ignore all rumors in my opinion as that will cause more harm than good in the long haul as this market just simply has massive oversupply issues at present. Currently, I'm sitting on the sidelines as the chart structure is poor, but there could be something down the road over the next couple of weeks, but the risk/reward is not in your favor in my opinion so avoid this market and move on.
TREND: MIXED
CHART STRUCTURE: POOR
Copper Futures
Copper futures in the December contract traded sharply higher this week in New York up about 400 points at 2.20 a pound reacting positively to the Federal Reserve refusing to raise interest rates now hitting a 4 week high. At the current time, I’m sitting on the sidelines in this market, but I’m looking at entering into a bullish position. However, the 10-day high is too far away which stands at 2.06 risking around 1400 points or $3,500 per contract, but in a couple of days the risk/reward will be in your favor so be patient and wait for some type of price pull back. Copper prices are now trading above their 20 and 100-day moving average telling you that the short-term trend is higher as low-interest rates should spur demand for copper as the housing market remains strong. Keep a close eye on this market as the 10-day low in 4 days will be raised to 2.14 and then the chart structure will be outstanding so look at this to the long side.
TREND: HIGHER
CHART STRUCTURE: POOR
Nasdaq 100 Futures
The NASDAQ 100 in the December contract traded higher up about 60 points for the trading week reacting positively to the Federal Reserve not raising interest rates once again sending prices to all-time high. I had been recommending a short position in the NASDAQ over the last 3 weeks getting stopped out in Wednesday's trade around the 4843 all level as it's time to move as you don’t want to be short a market that is hitting all-time highs. The NASDAQ 100 is now trading above its 20 and 100-day moving average clearly telling you that this trend is higher now as the Federal Reserve, in my opinion, wants to push the stock market higher throughout 2016 so you must move on.
TREND: HIGHER
CHART STRUCTURE: POOR
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.
Rough Rice Futures
Rough-rice futures in the November contract settled last Friday in Chicago at 9.81 while currently trading at 9.68 down about 13 points for the trading week as I have not talked about this commodity for quite some time keeping a close eye on a possible breakout at the 4 week high which stands at 9.97 & if that is executed place your stop at the 10 day low which comes next week will be around 9.60 risking around $.40 or $800 per contract plus slippage and commission. Rice futures are trading slightly above their 20-day but still under the 100-day moving average telling you that the short-term trend is mixed as we have been in a consolidation pattern bottoming out around the 9.40 level as the chart structure is very tight at present therefore lowering monetary risk. At the current time, there is no trend, but that could develop come next week’s trade as I’m looking at bullish scenarios across-the-board as we could be active once again next week as I still do have a bullish bias to many sectors currently.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Corn Futures
Corn futures in the December contract settled last Friday in Chicago at 3.37 a bushel while currently trading at 3.36 basically unchanged for the trading week still stuck in a sideways trend. Corn prices are trading above their 20-day but still below its 100-day moving average telling you that the short-term trend is mixed as I’m currently not involved in this market waiting for a breakout to occur above 3.44 as volatility has come to a crawl. Heavy rains throughout several states in the Midwestern part of the United States is causing concern about possible yield damage, therefore, lowering production numbers however estimates are remaining at around 15.1 billion bushels which is another record crop which will start to be harvested next week. The grain market, in general, has been going sideways for months as I’m not involved at all. However, I am looking at a bullish position in oats and wheat so keep a close eye on the corn market as volatility certainly will increase once the combines start rolling as we now look towards 2017. I think that situation could be a totally different story than 2016 as lower acres will be planted in my opinion.
TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING
Cotton Futures
Cotton futures in the December contract settled last Friday in New York at 67.28 while currently trading at 70.50 up over 300 points for the trading week despite the fact that prices are down 110 points in today’s trade. Cotton is trading above their 20 and 100-day moving average telling you that the short-term trend has now turned higher as I’ve been sitting on the sidelines in this market waiting for the chart structure to improve as a bullish trade could be at hand. The problem with cotton at the present time is the 10-day low stands at 66.44 which is over 400 points away or $2,000 per contract which is too much risk in my opinion for this commodity so be patient & wait for some type of price reduction, therefore, lowering monetary risk as higher prices are ahead in my opinion. Traders are reacting to the Federal Reserve comments earlier in the week not raising interest rates sending many of the commodity markets higher. However, today was basically blamed on profit-taking as harvest delays in the southern part of the United States continues to prop up prices here in the short-term.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Sugar Futures
Sugar futures in the October contract settled last Friday in New York at 21.78 a pound while currently trading at 22.20 up about 40 points for the trading week but the real story was in yesterday’s when prices touched 23.45 before reversing and then finishing lower as a possible spike top may have been created in my opinion. Sugar prices are hitting a 4 year high as less production over the last several years has turned the supply/demand tables to the bullish side as who knows how high prices could go & if you read any of my previous blogs you understand that I’m not involved in this market, but I’m certainly not recommending any type of short position as that would be counter trend trading. Sugar prices are trading far above their 20 and 100-day moving average telling you that the short-term trend clearly is to the upside but the risk/reward is not new favor at this time so avoid this market & move on and look other markets with better monetary situations. Sugar prices, in my opinion, are going to continue to experience high volatility, so if you are involved in this market, you must respect the price swings while making sure that you only risk 2% of your account balance on any given trade.
TREND: HIGHER
CHART STRUCTURE: POOR
Wheat Futures
Wheat futures in the December contract settled last Friday in Chicago at 4.03 a bushel while currently trading at 4.06 up slightly for the trading week still stuck in a three-week tight consolidation pattern. At present, I’m waiting for the breakout to occur which will happen above 4.12 and if that level is broken, I will place my stop loss at the 10-day low which stands at 3.93 risking around $.20 or $1,000 per contract plus slippage and commission. The chart structure on the daily chart is outstanding at present as prices have gone nowhere consolidating the downturn in prices that we’ve seen over the last 4 months, but everything comes to an end as trading is about risk/reward in my opinion so keep a close eye on that level to enter into a bullish position. Planting is underway with the next winter wheat crop which is planted in the southern Great Plains of the United States as we are entering the highly volatile autumn and winter season as volatility certainly will start to expand here in the coming weeks in my opinion.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures in the November contract settled last Friday in Chicago at 9.66 a bushel while currently trading at 9.55 slightly lower for the trading week as this Friday afternoon prices are trading lower by about $.20 as this trade remains incredibly choppy. At present I’m not involved in any of the grain markets including soybeans as this trade has gone nowhere over the course of time just like many commodities in recent months. The harvest is right around the bend as the United States should produce 4.2 billion bushels which is another record crop so avoid this market at present look at other markets that are beginning to trend. Soybean prices rose to about 9.90 earlier in the week on thoughts that heavy rains in the Midwestern part of the United States would hamper crop conditions. However, prices then fell out of bed once again looking to possibly retest the 9.40 level which is major support as prices are still trading below their 20 and 100-day moving average telling you that the short-term trend is lower. If you have read any of my previous blogs, you understand that I’m only a trend follower. If a market is going higher, I’m looking to buy & if the market is going lower I’m looking to sell as I try to avoid trendless markets that are going sideways and that includes soybeans at present as choppy markets are extremely difficult to trade successfully in my opinion.
TREND: MIXED
CHART STRUCTURE: POOR
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 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 generally 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
ms****@se**********.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. 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.
