Weekly Futures Recap With Mike Seery

Platinum Futures

Platinum futures in the October contract is up $2 at 819 an ounce after settling last Friday in New York at 815 up about $4 for the trading week still experiencing very low volatility as prices are right near a 3 week high. I will be recommending a bullish position if we break the 838 level while placing the stop loss at the contract low which was hit on May 30th at 793 as the risk would be around $2,300 plus slippage and commission.

Gold futures are trading almost $600 higher than platinum as in the old days platinum used to trade higher than gold as this spread is really wide at the current time as I think platinum prices look extremely cheap to the rest of the sector and especially gold.

Platinum prices are now trading above their 20-day, but still below their 100-day moving average as the trend at the current time as mixed as I will wait for the breakout to occur before entering as I will not go short.

The volatility you would have to think will start to expand to the upside in the coming weeks and months ahead as it looks to me that prices over the last month are forming a bottoming out pattern.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Gold Futures

Gold futures in the August contract is currently trading at 1,413 an ounce after settling last Friday in New York at 1,400 up about $13 for the trading week and traded as high as 1,442 before profit-taking came about, but I do think higher prices are ahead. It won't surprise me if we consolidate due to the $150 rally that we've witnessed over the last month as tensions with the country of Iran continue to support prices.

Gold is trading far above its 20 and 100-day moving average as the trend is higher as I also have a bullish recommendation in silver and palladium while keeping a close eye on platinum to the upside.

The 10-year note is currently yielding about 2% as that is a fundamental bullish factor towards gold. It looks like the European countries are going to create some type of stimulus to spur their socialist economies which have no growth and that is supporting gold prices so if you are long a futures contract stay long in my opinion while placing the proper stop loss.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Silver Futures

Silver futures in the September contract is currently trading at 15.32 up about $0.02 this Friday afternoon after settling last week at 15.37 down about 5 cents for the trading week still hovering right near a 3 month high.

I have been recommending a bullish position initially in the July contract from around the 14.93 level as we had to roll over into the September contract due to expiration. If you took that trade continue to place the stop loss at 14.70 as an exit strategy as I want to give this trade some room as I do think the volatility will start to expand.

Silver prices are still trading above their 20 and 100-day moving average as the trend is higher, however for the bullish momentum to continue we have to break the June 21st high of 15.62 and if that does occur I think we will head up into the $16 range rather quickly.

The strongest precious metal at the current time is gold, and I still believe silver prices are extremely cheap compared to gold. I think it will start to catch up in the coming months ahead so continue to play this to the upside and if you're not involved wait for some type of price retracement therefor lowering the monetary risk as I think the downside is limited.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Palladium Futures

Palladium futures in the September contract is currently trading down $7 at 1,531 after settling last Friday at 1,499 continuing its bullish momentum as I still believe higher prices are ahead.

As I have talked about in many previous blogs, I think palladium prices could go as high as 2,000 as there is strong demand coupled with short supplies which continues to fuel this market higher. I have been recommending a bullish position from around the 1,388 level, and if you took that trade the stop loss has been raised to 1,448 as the chart structure will improve every day next week therefor the monetary risk will also be lowered.

Volatility in palladium is extremely high as we had a $40 trading range already this afternoon as this commodity will experience incredible volatility in the coming months ahead, in my opinion.

The precious metal sector remains bullish in my opinion, I also have a recommendation in silver and I'm keeping a close eye on the platinum market as this sector has probably the strongest bullish trends at the current time so continue to stay long as I see no reason to go short.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Copper Futures

Copper futures in the September contract is currently unchanged at 2.7165 a pound after settling last Friday in New York at 2.7040 up slightly for the trading week continuing it's remarkably low volatility.

I have been recommending a bullish position from around the 2.7140 level, and if you took that trade, the stop loss remains at the contract low which was hit on June 7th at 2.6000 as an exit strategy as the chart structure is solid due to the minimal price swings.

Copper prices are trading above their 20-day but still below their 100-day moving average which stands at 2.8200 which is still quite a distance away, however, the main reason why I took this recommendation is the fact that there is a nice rounding bottom that may have taken place as that is a bullish technical indicator which predicts higher prices ahead.

At the current time, I have recommendations in silver, palladium, and it looks like we're going to be entering platinum on the close as this sector remains bullish.

The 10-year note is currently yielding 2% and looks to move even lower in my opinion as I think this could strengthen the housing market & if we can come up with any trade agreement with China that would be very bullish copper prices.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 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.

Sugar Futures

Sugar futures in the October contract are trading higher for the 2nd consecutive session currently at 12.80 a pound after settling last week at 12.48. I have been recommending a bullish position from around the 12.32 level and if you took the trade continue to place the stop loss under the contract low which was hit on May 23rd at 11.82 as an exit strategy.

One of the main reasons why sugar prices rallied over the last several days is the fact that Brazilian sugar production was lower than expected as that has pushed prices higher in the short term.

This is my only soft commodity recommendation as it also looks to me that coffee prices are headed higher, but the risk/reward is not your favor to take a position at this time.

Sugar prices are trading above their 20 and 100-day moving average, but for the bullish momentum to continue we have to break the June 14th high of 12.95 in my opinion as the agricultural markets look strong across the board as I do believe the giant bearish trends that we have witnessed over the last several years are finished.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Coffee Futures

Coffee futures in the September contract is currently trading at 109.65 as prices are right near a 5 month high after settling last Friday in New York at 100.65 up over 900 points for the trading week as this trend has turned higher.

I have talked about coffee in many previous blogs. However, at the current time, I'm not involved as the chart structure is terrible as the 10-day low stands at 96.25 as the risk is over $5,000 per contract which is too high in my opinion.

I will keep a close eye on this market and wait for some type of price retracement while then entering into a bullish position while lowering the monetary risk as well as concerns about cold and wet weather entering Brazil next week possibly delaying harvest is pushing prices higher. Fundamentally speaking current coffee supplies have tightened after ICE-monitored coffee inventories dropped to an 8-3/4 month low of 2.377 mln bags Friday down from March's 4-3/4 year high of 2.503 mln bags.

Coffee prices are trading above their 20 and 100 day moving average as the trend indeed has turned higher as my only soft commodity recommendation is a bullish sugar trade at the current time, but I'm keeping a close eye on this as we could be involved in next week's trade.

TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY:

Live Cattle Futures

Live cattle futures in the August contract settled last Friday in Chicago at 102.22 while currently trading at 105.27 up over 300 points for the trading week as a double bottom around the 102.50 level may have taken place.

Feeder cattle prices have rallied about 800 points over the last 3 trading sessions reacting positively off of the grain report that showed 91 million acres of corn being planted sending corn down $0.25 as I have a hard time believing that number, but that is supporting the feeder cattle market today.

I have been recommending a bearish position from around the 106.30 level if you took that trade continue to place the stop on a hard basis only at 106.50 as today's high was 106.35 as we just missed getting stopped out.

Cattle prices are now trading above their 20-day but still below their 100-day moving average as there's a chance this market may have bottomed. However, I don't like to 2nd guess as I will continue to place the proper stop loss and see what Monday's trade brings.

Volatility in the livestock sector has undoubtedly increased over the last week or so, and I think it will even become even more violent during the summer months. If you do participate in this market, make sure you place the proper amount of contracts while risking 2% of your account balance on any given trade as a proper money management technique.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: iNCREASING

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 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.