Silver Futures
Silver futures in the December contract ended the week on a sour note down $0.42 at 17.75 after settling last Friday at 18.11 an ounce as prices are near a 3 week low. I have been recommending a bullish position over the last several months from the 14.93 level originally in the September contract as it is time to exit and move on as prices are right near a 3 week low as the trend in the short-term has changed.
Silver futures are trading below their 20-day but still above their 100-day moving average as all the interest has come back into the U.S stock market which is right near another all-time high as money flows are entering equities and out of the metals.
If you are a longer-term investor, I would still hold on to silver as I still believe prices are cheap historically speaking as this is just the pullback as I will not take a short position as I think the downside is minimal.
I do not have any recommendations in the precious metal as I think this is a pause as we will probably witness a consolidation over the next couple of weeks, but I still believe prices will head into the $20 range come year-end, but it is time to move on and exit.
TREND: MIXED
CHART STRUCTURE: POOR
VOLATILITY: HIGH
Copper Futures
Copper futures in the December contract is trading sharply higher this Friday afternoon in New York up 475 points at 2.6880 a pound after settling last Friday at 2.6340 as prices have now hit a 6 week high.
I had been recommending a bearish position from around the 2.5780 level getting stopped out in yesterday's trade at 2.6500 as the U.S. stock market is right near all-time highs once again as that is lending support to copper.
Prices are now trading above their 20-day and right at their 100-day moving average as the trend may have changed to the upside as I will be patient and wait for the chart structure to improve as the risk/reward is not in your favor to take a bullish or bearish trade.
The next major level of resistance is at the 2.8000 level as my only precious metal recommendation at the current time is a bullish silver position. Volatility in copper certainly has expanded over the last several weeks as we have had a sharp rally off of the 2-year low.
TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING
Coffee Futures
Coffee futures in the December contract settled last Friday in New York at 97.05 while currently trading at 102.80 up nearly 600 points for the trading week as prices are now at a 6 week high. Major concerns about drought developing in the country of Brazil which is the largest producer has pushed prices off of a 14-year low as I have been recommending a bullish position from around the 101 level and if you took that trade continue to place the stop loss under the contract low and 14-year low which was hit on August 20th at 93.40 as an exit strategy.
If the hot and dry weather conditions persist, I would think prices could touch the contract high which was hit on July 5th at 119 as the volatility should start to increase as this commodity can have tremendous price swings daily.
Coffee prices are trading above their 20-day but slightly below their 100-day moving average as I think we're just in the beginning of a bullish trend as the 95 level held on multiple occasions as the chart structure was excellent at the time of the initiation.
Currently, I also have a bullish recommendation in cotton, and I'm looking at a bullish position in the cocoa market as commodity prices certainly look cheap especially compared to the stock market which is right near all-time highs once again so stay long.
TREND: HIGHER - 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 settled last Friday in Chicago at 3.55 a bushel while currently trading at 3.72 up for the 2nd consecutive session acting positively off of yesterday's crop report which showed production numbers at 13.799 billion bushels as that was lowered by 102 million as prices are right near 2 week high.
If you take a look at the daily chart, there's a price gap that was created on August 13th between 3.88 / 3.92 and that could be the next level that will be tested. I'm currently sitting on the sidelines as I do not have any grain recommendations.
Corn prices are now trading above their 20-day but still below their 100-day moving average as the trend is mixed. However, the chart structure is starting to improve as we could be involved in a possible bullish position in the coming weeks ahead.
Weather forecasts released yesterday stated that there could be a possible frost in the Midwestern part of the United States on September 23rd as that sent soybean prices sharply higher & if that situation does occur corn prices would spike higher because the crop is behind schedule so be patient and sit on the sidelines.
TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE INCREASING
Cotton Futures
Cotton futures in the December contract settled last Friday in New York at 58.58 while currently trading at 63.05 sharply higher for the 2nd consecutive session reacting positively off of yesterday's crop report as NASS cut projected 2019 cotton yield by 16 lbs/ac to 839 lbs, with harvested acreage down 130,000 acres at 12.51 million acres as that took production down 660,000 bales to 21.86 million.
Rumors were circulating that President Trump was considering an interim trade deal with China which also has pushed prices higher.
I have been recommending a bullish position from 61.50 level & if you took the trade place the stop loss under the contract low at 56.59 as the risk is around $2,500 per contract plus slippage and commission as the volatility certainly has increased. Cotton prices are trading above their 20-day, but still under their 100-day moving average standing at the 65 level, which I think could be tested in next week's trade.
At present, I also have a bullish coffee recommendation, and I'm also keeping a close eye on cocoa as it looks to me the prices are headed higher so continue to play this to the upside while placing the proper stop loss as the chart structure will not improve for another 8 trading sessions.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY:
Cocoa Futures
Cocoa futures in the December contract settled last Friday at 2277 while currently trading at 2367 higher for the 3rd consecutive session hitting a 5 week high.
Fundamentally speaking cocoa futures are vulnerable to short-covering after last Friday's Commitment of Traders (COT) report showed that funds boosted their net-short positions by 5,219 contracts to 33,776 contracts, the most in 5 months. Another supportive factor for cocoa prices is crop concern in Ghana after a senior scientist at the Cocoa Research Institute of Ghana said last Friday that the deadly swollen-shoot disease infects about 16% of the cocoa crops in Ghana, the world's 2nd largest cocoa producer.
Cocoa futures are trading above their 20-day but still below their 100-day as I'm keeping a close eye on a bullish position on some type of pullback in next week's trade while placing the stop loss under the contract low as it certainly looks to me that cocoa prices have bottomed. If you take a look at the daily chart, a possible rounding bottom chart pattern may have developed as that technical indicator is bullish.
TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING
Trading Theory
What is a Rounding Bottom? A rounding bottom is a chart pattern used in technical analysis and is identified by a series of price movements that graphically form the shape of a "U." Rounding bottoms are found at the end of extended downward trends and signify a reversal in long-term price movements.
This pattern's time frame can vary from several weeks to several months and is deemed by many traders as a rare occurrence. Ideally, the volume and price will move in tandem; then the volume confirms the trend.
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
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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.
