Gold Futures
Gold futures in the December contract is currently trading at 1,523 an ounce after settling last Friday in New York at 1,529 down slightly for the trading week experiencing high volatility as I am currently not involved, but I do have a bullish silver position which has been mirroring gold to the upside.
If you are long a futures contract, I would place the stop loss under the 2 week low standing at 1,503, however for the bullish momentum to continue prices have to break the September 4th high of 1,566 in my opinion.
Trade talks between the United States and China will begin once again in October as that put pressure on gold prices in yesterday's trade also sending the stock market sharply higher as money flows entered equities and out of the precious metals which have been used as a flight to safety.
In my opinion, I still believe gold and silver will continue their bullish trends as negative interest rates around the world will continue to support the precious metals sector as interest rates are going to remain extremely low for a long time as I see no reason to be short gold.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH
10-Year Note Futures
TREND: LOWER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY:
Copper Futures
Copper futures in the December contract is currently trading at 2.6320 a pound after settling last Friday in New York at 2.5515 up over 700 points for the trading week as the U.S stock market has had a significant rally helping support copper in the short-term.
I have been recommending a bearish position from around the 2.5280 level & if you took that trade continue to place the stop loss at 2.6500 as we are just an eyelash away from getting stopped out. Copper prices are still trading under their 20 and 100-day moving average as prices hit a 2 ½ year low earlier in the week on weakening demand for this commodity so continue to place the proper stop loss.
The precious metals across the board are sharply lower once again today as I also have a bullish silver trade which is down almost $0.60 as copper and silver can go in opposite directions, and that is precisely what we witnessed over the last couple of months. Stay short, and if we are stopped out, we will look at other markets that are beginning to trend as the volatility has undoubtedly come to life, which is a terrific thing to see.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH
Mexican Peso Futures
The Mexican Peso in the December contract is trading higher for the 5th consecutive session following the stock market to the upside as I had been recommending a bearish position initially the September contract rolling over into the December due to expiration exiting today around the 5025 level as the trend has now turned mixed.
As I have talked about in many previous blogs, the Peso sometimes mirrors the U.S stock market as that's exactly what has happened this week, so it is time to move on and look at other markets that are beginning to trend as I do not have any currency recommendations.
The Peso is now trading above its 20-day but still below its 100-day moving average as the trend is neutral. Volatility has increased due to all the uncertainty that we are experiencing right now with the trade war and with worldwide interest rates plunging monthly.
TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING
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.
Corn Futures
Corn futures in the December contract which is considered the new crop and will currently be harvested in the next couple of months settled last Friday in Chicago at 3.69 a bushel while currently trading at 3.54 down about $0.15 for the week continuing momentum hitting a fresh contract low.
I'm not involved in corn; however, I do have bearish recommendations in wheat and soybeans as I think the entire grain market will continue to bleed weekly as I see no reason to own corn at this time.
The flooding that occurred in April and May seems to have done absolutely no damage which is astonishing in my opinion as I live in the state of Illinois as if it certainly had a major impact on our crop, but the market is always right, and this market is telling you that a large crop will be harvested in the next 6 weeks.
If you are short a futures contract place the stop loss above the August 29th high of 3.77 as an exit strategy with the next major level of support at the 3.30 level as we await next week's highly anticipated crop report which will dictate short-term price action. Fundamentally speaking this market remains very weak because there is very low demand for corn at this time and for ethanol as I see no reason to be a buyer.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE
Coffee Futures
Coffee futures in the December contract is currently trading higher by 145 points at 96.85 a pound still stuck in a 2-week consolidation digesting the recent downdraft in prices that we have witnessed as prices topped out on July 5th around the 119 level.
I'm sitting on the sidelines, but it does look to me that a possible 14 year low which was hit on August 20th at 93.40 will hold as the chart structure has turned outstanding therefore the risk/reward is becoming more in your favor.
I will not go short coffee at these depressed levels as I think we are in a bottoming out pattern as I will be looking at a bullish position in the coming weeks ahead as prices have broken out of their downtrend line as I do see some light at the end of the tunnel.
Coffee prices are still trading under their 20 and 100-day moving average as the trend is lower. However, the bearish situation is starting to turn as Brazil's harvest has finished as that is a fundamental bullish factor coupled with the fact of increasing worldwide demand as I think the worst is over for coffee prices so play this to the upside when the breakout occurs.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW
Soybean Futures
Soybean futures in the November contract is currently trading at 8.62 a bushel after settling last Friday in Chicago at 8.69 down about $0.07 for the week continuing its bearish momentum.
The country of Brazil is expected to plant around 90 million acres which could produce another record crop as overproduction has been the main problem for prices over the last several years.
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 8.80 as an exit strategy, however for the bearish momentum to continue we have to break the August 28th low of 8.52 as that could happen in next weeks trade especially if a bearish crop report comes about.
China and the United States have agreed to talk in October and if some type of trade agreement does come about that would be very bullish soybean prices, but at the current time the fundamental and technical picture for this commodity remains bearish as harvest is right around the bend here in the United States as that generally puts pressure on prices as supplies come onto the market so stay short.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW
Wheat Futures
Wheat futures in the December contract is currently trading at 4.63 a bushel after settling last Friday in Chicago at 4.62 unchanged looking for some fresh fundamental news to dictate short-term action as we await next week's crop report.
I have been recommending a bearish position initially in the September contract at the 5.04 level and if you took that trade continue to place the stop loss on a closing basis only at 4.81 as an exit strategy. Wheat prices are still trading far below their 20 and 100-day moving average as the downtrend line remains intact as well as I still think prices will test the contract low around the 4.40 level in the coming weeks ahead.
I also have a bearish soybean recommendation as I still believe the grain market is headed lower unless some type of trade agreement comes about with China as they will have meetings once again in October.
Ideal weather conditions in the Great Plains part of the United States continues to put pressure on prices coupled with the fact of ample worldwide supplies so continue to play this to the downside as I see no reason to be a buyer of wheat or the grain market.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW
Trading Theory
This rule is essential, and I witness it being abused constantly creating tremendous loses that are sometimes difficult to come back.
Never add to a losing position because if the position continues to go against you, and now you have added even more contracts which are all losing money your account will suffer loses much more than 2% and in some case adding positions and never getting out of a losing trade has wiped peoples trading accounts down to zero because of 1 or 2 bad trades.
Remember, always play for another day you will have losing trades, and the good traders manage losses and move on to the next possible trade.
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.
