Gold Futures
Gold futures in the December contract settled last Friday in New York at 1,523 while currently trading at 1,537 up nearly $28 for the week ending on a positive note all because it certainly looks like a trade war with China is going to escalate.
I am currently not involved in gold, but I do think higher prices are ahead and if you are long a futures contract continue to place the stop loss under the 2 week low standing at 1,488 as an exit strategy as I still think prices break the 1,600 level possibly in next week's trade. I have a bullish silver trade which continues to move higher weekly as I see no reason to be short the precious metals as the U.S. stock market is down another 450 points as the commodity markets remain weak across the board especially the agricultural sector.
Volatility in gold is exceptionally high, and that will continue for the rest of 2019 as prices are still trading above their 20 and 100-day moving average, however for the bullish momentum to continue prices have to break the April 13th contract high of 1,546, and I think that situation is going to occur so stay long if you are involved as I see no reason to take profits.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH
Silver Futures
Silver futures in the September contract reacted neutral off of the Federal Reserve comments about interest rates as he said absolutely nothing as silver prices are up $0.07 at 17.11 after settling last Friday in New York 17.12 an ounce unchanged for the trading week.
I have been recommending a bullish position over the last couple of months from the 14.93 level, and if you took that trade the stop loss now has been raised to 16.51 on a closing basis only, however in Tuesday's trade that will be raised to 16.82 as the chart structure will turn outstanding, therefore, the monetary risk will be reduced.
Gold prices are up about $8 today helping support silver as I still believe prices could touch the $20 level in the coming months ahead as historically speaking still look cheap in my opinion.
Silver prices are trading above their 20 and 100-day moving average as the trend is higher as China announced more tariffs on U.S. products starting September 1st which is negative towards all commodities except for silver and gold which are used as a flight to quality as I see no reason to be short silver so stay long and continue to place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW
Mexican Peso Futures
The Mexican Peso in the September contract settled last Friday at 5067 while currently trading at 5020 down about 47 points for the week still hovering right near a 2 1/2 half month low. The volatility in the Peso has come to a crawl as we continually grind lower weekly as I have been recommending a bearish position from around the 5080 level and if you took the trade continue to place the stop loss above the 2 week high which stands at 5137 as an exit strategy.
The chart structure will start to improve in next week's trade as I still believe prices will retest the June 3rd low of 4942 as we await the Federal Reserve chairman announcement on interest rates later this afternoon as that certainly should put some volatility back into this currency.
The United States has some of the highest interest rates in the world even at these incredibly depressed levels, however there are 12 countries worldwide that have negative interest rates as that is bullish the U.S. dollar which should mean that the Mexican Peso goes south so continue to play this to the downside as the risk/reward is still in your favor.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW
10-Year Note Futures
The 10-year note in the September contract settled last Friday in Chicago at 130 / 29 while currently trading at 130 /28 ending the week on a positive note up 19 ticks continuing its bullish momentum. President Trump had some harsh words towards China talking about taking business out of that country and bringing it back to the United States as a tariff war certainly is at hand, and that is sending money flows back into the entire bond sector.
I have been recommending a bullish position around the 128 / 00 level and if you took that trade continue to place the stop loss under the 2 week low standing at 129 /17 as I see no reason to be short the bond market as gold and silver are sharply higher in today's trade.
For the bullish momentum to continue we have to break the August 15th high of 131 /11 as that could happen in next week's trade as the yield right now stands at 1.54% and if you have followed any of my previous blogs you understand that I think prices are headed down to the 1% level soon. This is the strongest trend to the upside as there is huge demand for U.S. treasuries as they are still yielding far above the rest of the world as the next major level resistance is at the 132 / 00 level.
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.
Wheat Futures
Wheat futures in the September contract settled last Friday in Chicago at 4.70 a bushel while currently trading at 4.71 as I'm now recommending to add another short position at today's price level while placing the stop-loss above the 10-day high which on Monday will stand at 4.80 as the chart structure is outstanding at the current time.
The 1st recommendation was a short position from around the 5.04 level as adding to winners and getting out of losers is the way to trade as the risk/reward is in your favor as the 2nd contract risk is around $500 per contract plus slippage and commission.
I also have bearish recommendations in soybeans and rice as I think the whole market continues to bleed lower. However, prices have now traded higher for the 3rd consecutive session, and I believe that it is just profit-taking.
The trade war with China certainly is escalating as that is bad news for the grain market coupled with the fact of ideal weather conditions in the Great Plains part of the United States so add to your position as I still think prices will test the 4.27 level which was the contract low in the coming weeks ahead.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW
Soybean Futures
Soybean futures in the November contract settled last Friday in Chicago at 8.79 a bushel while currently trading at 8.62 down about $0.17 for the trading week as prices are hovering right near a 3 month low. I have been recommending a bearish position from the 8.80 level and if you took that trade continue to place the stop loss above the 2 week high, which stands at 8.97. However, the chart structure will improve daily starting next week; therefore, the monetary risk will be lowered.
I also have bearish recommendations in wheat and rice as I think the whole grain sector continues to head lower as China has announced tariffs on another 75 billion dollars worth of U.S goods starting on September 1st as that is a bearish indicator towards grain prices and especially for soybeans.
For the bearish momentum to continue prices will have to break the August 5th low of 8.54 in my opinion and if that does happen, look for a retest of the contract low which was hit on August 13th at 8.27 as I see no reason to be a buyer of this commodity. Soybean prices are trading under their 20 and 100-day moving average coupled with the fact that the downtrend line remains intact, so continue to play this to the downside as there is more room to run.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE
Orange Juice Futures
Orange juice futures in the November contract is currently trading lower by 90 points at 98.30 after settling last Friday in New York at 101.00 continuing its bearish momentum as I still think lower prices are ahead.
I had been recommended a bearish position in the September contract form around the 98.50 level while exiting around the 97.00 area then rolling over into the November contract and if you take this recommendation place the stop loss above the 2 week high standing at 94.65 as an exit strategy.
In my opinion, I believe prices will retest the August 19th low of 94.65 possibly in next weeks trade as I see no reason to own any of the soft commodities or the agricultural sector at this time.
Major problems with the trade agreement with China certainly will have a fundamental bearish factor and as long as there is no hurricane in the Atlantic to curtail production numbers in the state of Florida as this market is in trouble to the downside so stay short as I think the volatility will start to increase as well.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW
Lean Hog Futures
Hog prices in the October contract settled last Friday in Chicago at 62.00 while currently trading limit down 300 points at 59.30 as this market certainly looks to head lower in my opinion. I am currently not involved, but I'm certainly not recommending any bullish position as I believe prices could go all the way down to the 50 level which is about another 18% drop as there is nothing bullish fundamentally or technically speaking about the livestock sector especially for hogs.
President Trump announced today that the trade deal is off with China as it certainly looks to escalate as that is a very negative fundamental factor towards hog prices so if you are short stay short & place the proper stop loss above the August 12th high of 69.12 in my opinion as the chart structure is terrible.
I will be looking at a possible short position once the risk/reward become more in your favor as that could happen in next week's trade as the agricultural markets look extremely bearish and if you've been following any of my previous blogs you understand that I'm not bullish anything except the bonds and the precious metals. Hog prices are trading far below their 20 and 100-day moving average as we are amid deflation, not inflation so continue to play this to the downside.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH
Trading Theory
This is an outstanding rule to understand as when a market trades limit down such as what cotton did in today's trading session that tells you there is a high probability that prices will open lower on the open in tomorrow's trading session as buying limit down is a fool's game.
Remember when a market closes limit down, there is also the chance of opening limit down the next day as that situation frequently occurs as the volatility when that situation happens explodes as that generally happens off of a report.
Also the exact opposite happens when a commodity goes limit up then you would see a higher probability that the next day's opening will be sharply higher, now it doesn't have to close higher, but it will open higher so never sell limit up and never buy limit down as that is extremely dangerous in the next day's trading session.
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
Michael Seery, President
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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.
