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 February contract settled last Friday at 1,177 while currently trading at 1,162 an ounce down about $15 for the trading week after hitting a 10 month low on December 5th at 1,158. However, the trend remains bearish as I think this is just a kickback from oversold conditions. Gold prices are still trading below their 20 and 100 day moving average telling you that the short-term trend is lower as bearish fundamentals continue to send money out of this commodity as higher interest rates here in the United States and a strong U.S dollar continue to keep a lid and put pressure on this market here in the short-term. I am sitting on the sidelines in this market as the chart structure has been very poor for several months as prices collapsed right after the Trump election and have not looked back as I'm currently looking at a possible bullish position in silver, but gold still looks to have another leg down in my opinion. At present, I'm also recommending a bullish position in the S&P 500 as it seems to me the higher the equity market goes the lower the gold market goes as I think that trend will continue for the rest of the holiday season which still has 3 weeks left.
TREND: LOWER
CHART STRUCTURE: POOR
Silver Futures
Silver futures in the March contract settled last Friday in New York at 16.83 an ounce while currently trading at 17.00 up about $0.17 for the trading week right near a 4 week high as prices have been very resilient despite the fact that the U.S dollar continues its bullish momentum right near 13 year highs. If you take a look at the daily chart it looks to me that a rounding bottom has taken place just like it has in the Canadian dollar, so I'm looking at a bullish position while then placing the stop loss under the 10 day low if prices break out next week to a four-week high as the chart structure is outstanding at present. Gold prices are down another $9 currently trading at 1,163 an ounce as that certainly is keep the lid on silver prices as I do think come 2017 the commodity markets continue to move higher except possibly gold as the stock market has absolutely caught fire as I'm currently recommending a bullish in the S&P 500. Silver prices are trading slightly above their 20-day but still below their 100-day moving average which stands at 17.94 as we could be entering a bullish position as the risk/reward is starting to turn in your favor.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Crude Oil Futures
Crude oil futures in the January contract settled last Friday in New York at 51.68 a barrel while currently trading at 51.42 down about $0.26 for the trading week consolidating the recent move up off of the OPEC announcement that they will cut an estimated 4.5% of production sending prices near a yearly high. At present, I'm sitting on the sidelines in this market as the chart structure is poor as prices are still around major resistance at the 52 level as prices touched there twice in the month of October only to fail as I will wait for better chart structure, therefore, lowering monetary risk before entering. The contract high in oil happened on June 9th at 53.72 as there is optimism in the investment world as the stock market is hitting another all-time high today and I think that will start to bleed over into the commodity sector especially in oil come 2017 as I do think higher prices are ahead. Crude prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher, but for the trend to resume prices need to break 53.72 then you would have to think that the giant bear market is over in the energy sector as a whole.
TREND: HIGHER
CHART STRUCTURE: SOLID
S&P 500 Futures
The S&P 500 in the December contract settled last Friday in Chicago at 2192 while currently trading at 2252 up about 60 points for the trading week trading higher for the 5th consecutive trading session hitting another all-time high as massive optimism about the Trump administration has emerged. I've been recommending a bullish position from around the 2194 level and if you took that trade continue to place your stop loss under the 10 day low which stands at 2179 as the chart structure will not improve for another 5 trading sessions, so you're going to have to accept the monetary risk at this time which remains high. The S&P is trading far above its 20 and 100-day moving average telling you that the short-term trend is higher as massive cutbacks in regulations and taxes is spurring the equity markets sharply higher as the banking industry is hitting another all-time high this week, as I have not seen optimism like this over a long period. In my opinion, I think eventually if the stock market continues to move higher that will start to affect the commodity markets to the upside especially crude oil & the agricultural sector as I do believe in 2017 we will see some tremendous volatility to the upside.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Canadian Dollar Futures
The Canadian dollar in the December contract settled last Friday at 7520 while currently trading at 7592 as I was recommending a bullish position from around the 7500 level which was executed on Sunday night , however I was unable to take advantage, so I am currently sitting on the sidelines, but there are investors who are in this position and if you took the trade continue to place your stop loss under the 10 day low which stands at 7419 as the chart structure will start to improve on a daily basis next week. If you take a look at the daily chart it looks like a rounding bottom has occurred which is a bullish technical indicator as prices have traded higher for the 3rd consecutive day all on optimism about crude oil prices moving higher as they are right near $52 a barrel which is bullish towards the Canadian as that is an exporting country and the higher oil goes, the higher the Canadian dollar generally goes as well. The Canadian has hit a 7 week high with the next major level of resistance around 7650 /7700 as I still think higher prices are ahead as the dollar is also trading above its 20 and 100-day moving average for the 1st time in many months, and that tells you that the trend is higher.
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.
Live Cattle Futures
Live cattle futures in the February contract settled last Friday in Chicago at 108.87 while currently trading at 109.80 up about 100 points still stuck in a 3-week consolidation after topping out on December 1st around the 113.20 level. At present, I'm sitting on the sidelines waiting for the chart structure to improve which will take another week as the hog market certainly has exploded to the upside helping support cattle during recent weeks as the cold weather certainly is coming to the Great Plains and the Midwestern part of the United States. Cattle prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher as the U.S dollar has not had an effect on livestock prices over the last several weeks which is surprising. Volatility in the cattle market is high at present so look for large price swings on a daily basis as I do think volatility will even increase in the month of January so keep a close eye on this market as we could be involved soon.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Cocoa Futures
Cocoa futures in the March contract settled last Friday in New York at 2395 while currently trading at 2172 down about 220 points for the trading week hitting a 3 year low as this market trend continues the move south on a daily basis. I have been writing about this market in previous blogs as I was looking at entering into a bullish position if prices broke 2458 which would have been the 4 week high but prices have broken down as I'm certainly not recommending any type of bullish position in this commodity as it certainly looks to me that lower prices are ahead. Cocoa prices are trading below their 20 & far below their 100-day moving average looking to retest the January 3rd low around 2050 level as I'm surprised on how weak prices have acted, but I missed this trade to the downside, and I will not chase so I will move on to look at other markets that are beginning to trend. The soft commodities, in general, look very weak as I'm currently recommending a short sugar position as the entire sector continues to move lower all based on a very strong U.S dollar as I think that trend is going to continue for the rest of 2016.
TREND: LOWER
CHART STRUCTURE: SOLID
Cotton Futures
Cotton futures in the March contract settled last Friday in New York at 71.04 while currently trading at 70.55 down about 50 points for the trading week still stuck in an extremely tight channel consumed in a very tight consolidation in my opinion and looks to be breaking out relatively soon so keep a very close eye on this market as I'm not sure which direction it's headed. Cotton prices are trading below their 20 but still above their 100-day moving average which stands at 69.62 which is just an eyelash away, and I would think if that level is broken a bearish trend could develop as the commodities are starting to be affected by the strong U.S dollar which is sharply higher once again. At the current time this is basically a technical trade as prices have gone nowhere for the month of July and are stuck in a 200 point range over the last 3 weeks as I would have to think there is a breakout looming as the 10-day high and the 10-day low are close together, therefore, lowering monetary risk.
TREND: MIXED - LOWER
CHART STRUCTURE: EXCELLENT
Sugar Futures
Sugar futures in the March contract settled last Friday in New York at 19.12 a pound while currently trading at 19.24 up about 12 points for the trading week in a very nonvolatile trading manner as the holiday season is certainly upon us. Sugar prices are trading far below their 20 and 100-day moving average telling you that the short-term trend is lower as I've been recommending a short position from around the 21.67 level and if you took that trade place your stop loss above the 10-day high which stands at 19.99 as the chart structure has improved in recent days, but will not improve for another 8 trading sessions. The next major level of resistance is around the 18.80 level and if that is broken I'm looking at possibly adding more contracts as I think we could head into the low 17's like the soft commodities in general look very weak as anything growing in Brazil is starting to melt down due to the fact that the U.S dollar is relentless to the upside so stay short and continue to place the proper stop loss.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee futures in the March contract settled last Friday at 145.80 a pound while currently trading at 141.50 down about 400 points as excellent growing conditions in the country of Brazil continue to push prices to levels that we have not seen since mid-August. Coffee futures are trading below their 20 and 100-day moving average telling you that the short-term trend is lower as the U.S dollar is the main culprit in the soft commodities and especially coffee as the dollar is up once again this Friday afternoon above 101 as that's hurting agricultural and precious metal commodities in my opinion. We are starting to enter the high volatile season in coffee over the next couple of months as in 2014 a drought erupted in Brazil sending prices sharply higher in a matter of weeks as I do think prices are getting cheap, however at the current time I am not involved in this market. The chart structure presently is poor as prices have dropped on a consistent basis, but I do think I will participate in this market to the upside eventually as a bottoming pattern is coming, so be patient.
TREND: LOWER
CHART STRUCTURE: POOR
Orange Juice Futures
Orange juice futures in the January contract settled last Friday in New York at 220.65 while currently trading at 213.00 down about 700 points for the trading week as I'm sitting on the sidelines in this market waiting for a possible selloff to occur as the chart structure is starting to improve on a daily basis. Juice prices are trading lower for the 6th consecutive trading session after topping out on November 2nd at 227.50 and then tried to retest that area on December 1st at 224.50 only to fail once again as I'm looking at a short position under the 4 week low of 205.50, however the chart structure will start to improve therefore lowering monetary risk. Juice prices are trading below their 20 but still above their 100-day moving average as this was one of the best trends in 2016 to the upside as Greening disease crippled the crop in Brazil and in the state of Florida sending prices to multi-year highs, but everything comes to an end in my opinion so keep a close eye on the downside as the soft commodities remain weak. Orange juice is starting to enter its extremely volatile month of January which can cause a possible freeze in the state of Florida sending prices sharply higher, so weather is the main focus on prices at the current time.
TREND: MIXED
CHART STRUCTURE: IMPROVING
Trading Theory
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 OVERTRADE 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.
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.
