Weekly Futures Recap With Mike Seery

Platinum Futures

Platinum futures in the January contract settled last Friday in New York at 936 while currently trading at 886 down nearly $50 for the week as prices are right near a 5 week low.

I do not have any recommendations out of the precious metals sector, but historically speaking, platinum prices look very cheap. I will wait for the chart structure to improve. Therefore, the risk/reward would be more in your favor, so be patient as I will not take a short position.

The S&P 500 has experienced a wild ride to start the month as the volatility in that market is extremely high, and that is also influencing platinum prices. But if you take a look at the daily chart, prices are right near major sport as historically speaking platinum is incredibly cheap, especially compared to gold and palladium.

The trend at the current time is negative with the next major level of support around the 850 level as I will keep a close eye in the coming weeks ahead for a bullish position as the precious metals I believe are still in a longer-term bullish trend.

TREND: MIXED - NEGATIVE
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Palladium Futures

Palladium futures in the December contract settled last Friday at 1,652 while currently trading at 1,640 down slightly for the trading week still hovering right near all-time highs.
I'm not involved, but I do have a bullish bias. I have several clients who are long a futures contract, and if you are involved in that trade, make sure you place the stop loss under the 10-day low standing at 1,602 as an exit strategy. The chart structure will also start to improve in next week's trade, therefore, lowering the monetary risk.

Palladium prices are trading above their 20 and 100-day moving average as this is a strong trend to the upside and the strongest out of the precious metals sector. However, for the bullish momentum to continue, we will have to break the October 2nd all-time high of 1,672, in my opinion.

Volatility remains high, and I don't think that situation is going to change anytime soon as the higher the price generally, the higher the volatility, and that is what we are witnessing. I still see no reason to be short this commodity.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

Orange Juice Futures

Orange juice futures in the November contract settled last Friday in New York at 99.85 while currently trading at 99.70 as prices have gone sideways over the last several weeks.

In my opinion, it looks to me that orange juice prices are bottoming as we have gone sideways over the last 3 months as we head into the very volatile winter season for Florida. A possible frost can devastate the orange juice crop, but it is too early at this point, but I'm looking to play this to the upside as I do believe the downside is very limited.

The chart structure is improving daily. Therefore, the risk/reward will become more in your favor in next week's trade as prices are right at their 20-day but still below their 100-day moving average standing at the 104 level.

There aren't any hurricanes that could devastate the orange crop at this time. And prices historically speaking look cheap. I also have bullish recommendations in coffee and cotton out of the soft commodity sector, so be patient as we could be involved in this commodity soon. I certainly expect volatility to increase substantially in the months ahead.

TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Coffee Futures

Coffee futures in the December contract settled last Friday in New York at 100.90 while currently trading at 101.00 unchanged for the trading week with prices stuck in the mud during the previous three weeks. I have been recommending a bullish position from the 101 level, and if you took the trade, continue to place the stop loss under the 14 year low, which stands at 93.40 as an exit strategy.

Fundamentally speaking, one supportive factor was the action by the ICO on Thursday to cut its global 2018/19 coffee surplus estimate to 4.05 mln bags from a Sep estimate of 4.96 mln bags. Another positive for coffee prices is tighter current supplies after ICE-monitored arabica coffee inventories fell to a 1-year low of 2.267 mln bags Wednesday.

Volatility in coffee is extraordinarily low, but I don't see that situation lasting much longer. If you take a look at the daily chart, an ascending triangle pattern is developing, which is a bullish technical indicator towards higher prices. Still, we need some fresh fundamental news to dictate short-term price action. However, I remain bullish, so stay long and continue to place the proper stop loss.

TREND: HIGHER - MIXED
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.

Corn Futures

Corn futures in the December contract, which is considered the new crop and is currently being harvested in the Midwest, settled last Friday in Chicago at 3.71 while currently trading at 3.85 a bushel and it looks to me that prices have finally bottomed.

I will be looking at a bullish position if prices hit 3.80 while then placing the stop loss under the contract low, which was hit on September 9th at 3.52 as the risk would be around $1,400 per contract plus slippage and commission.

Traders are awaiting the next crop report, which will show production numbers and should send some volatility back into this market. The report that was released last Monday showed that stockpiles were lowered considerably, sending the market sharply higher, but I want the risk/reward to become in your favor as that is why I'm patient.

If you take a look at the daily chart like I have talked about in many previous blogs, I thought the August 13th price gap would be filled, and that did occur in this week's trade. Prices are trading above their 20-day but still below their 100-day moving average, which stands at the 4.09 level, so be patient and look to play this to the upside as the downside is very limited, in my opinion.

TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Soybean Meal Futures

Soybean meal futures in the December contract settled last week at 295 while currently trading at 304 in Chicago as prices have broken out of a 9-week tight consolidation pattern looking to move higher.

I have been recommending a bullish position from around the 306 level, and if you took that trade, continue to place the stop loss under the contract low standing at 291 as the risk/reward is around $1,500 per contract plus slippage and commission. I do believe that the grain market has bottomed.

China has entered the soybean market once again and is purchasing large quantities of soybeans over the last several weeks. If we can come up with a trade agreement, this market would move higher. The harvest is underway in the Midwestern part of the United States. Prices are trading above their 20-day but still below their 100-day moving average as I also have a bullish recommendation in wheat.

The chart structure will not improve, so you will have to accept the monetary risk at this time. The 2019 soybean crop was disappointing due to the massive floods that we experienced in the spring, as this is the worst production number in years. However, the main problem has been the trade agreement with China not coming to fruition, although there is light at the end of the tunnel, so stay long.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 4.87 while currently trading at 4.89 a bushel as the volatility remains extremely low, looking for some fresh fundamental news to dictate short-term price action.

I have been recommending a bullish trade from around the 4.82 level. If you took that trade, the stop loss has now been raised to the September 3rd low of 4.50 as an exit strategy as seasonably speaking; the volatility should start to climb as winter is right around the corner.

Wheat prices are trading above their 20-day but still slightly below their 100-day moving average standing at the 5.02 level. I also have a bullish soymeal recommendation as I'm keeping a close eye on corn as I do think these commodities have finally bottomed.

For the bullish momentum to continue, we have to break the September 30th high of 5.01, in my opinion. If that does occur, I will be possibly looking at adding more contracts to the upside as we await next week's crop report, which definitely could spark this market to the upside, so stay long.

TREND: HIGHER - MIXED
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

Michael Seery, President
Seery Futures
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Phone #: 630-408-3325
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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.