Weekly Futures Recap With Mike Seery

Silver Futures

Silver futures in the December contract is trading higher for the 2nd consecutive trading session ending the week on a positive note up 40 cents at 18.20 an ounce after settling last Friday in New York at 17.57 up about 63 cents for the week hitting a four week high.

Dovish comments Thursday from ECB President Draghi bolstered the outlook for additional ECB stimulus measures, which was positive for the precious metals when he said the incoming data confirm "protracted weakness of the Eurozone economy.

I am recommending a bullish position if prices close above 18.00 while then placing the stop loss under the 10-day low standing at 17.18 as the risk is around $2,050 per 2 mini contracts plus slippage and commission as this market looks to test the contract high at 19.75 in my opinion.

I also have a bullish recommendation in copper as the whole sector looks to move higher. Silver prices are trading above its 20 and 100-day moving average as the trend has turned to the upside, so play this higher while making sure that you risk 2% of your account balance on any given trade.

TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Copper Futures

Copper futures in the December contract is currently trading at 2.6725 a pound after settling last Friday in New York at 2.6360 up about 365 points for the trading week hitting a six week high.

I have been recommending a bullish position from around the 2.6440 level, and if you took that trade, the stop loss has been raised to 2.5730, which is the new 10-day low as the chart structure will improve in next weeks trade.

Copper is riding the coattails of the S&P 500, which I also have a bullish recommendation as they both look to move higher due to a very strong U.S economy. Copper prices are trading above their 20 and 100-day moving average as the trend is higher with the next major level of resistance at the September 16th high of 2.7065. If that is broken, I might be looking at adding more contracts to the upside as adding to winners while cutting losses is the way to trade over time, in my opinion.

At the current time, I also have a bullish trade in silver, as I think that the whole sector will continue to move higher as I see no reason to be short.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Palladinum Futures

Palladium futures settled last Friday at 1,717 while currently trading at 1,752 up about $35 for the trading week, hitting another all-time high. I still believe prices could touch the 2,000 level in the coming weeks ahead as I see no reason to be short.

Fundamentally speaking palladium's largest single use is in automotive catalytic converters as the metal more and more regulations being made to reduce the emission of gases from automobiles as more of them are put on the road as this increases the demand from auto manufacturers for the metal.

Palladium is trading far above its 20 and 100-day moving average as this is the strongest trend to the upside. If you are long a futures contract, place the stop loss under the 10-day low standing at 1,657 as an exit strategy. However, in Monday's trade, that will be raised to 1,676 as the chart structure will improve daily, therefore, the monetary risk will be lowered, so stay long.

I am also recommending bullish positions in copper and silver as the whole sector looks to move higher.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

S&P 500 Futures

The S&P 500 settled last Friday in Chicago at 2988 while currently trading at 3006 up about 18 points for the trading week, continuing to move higher despite Amazons disappointing earnings report.

I am now recommending a bullish position while placing the stop loss under the 10-day low, which stands at 2953 as an exit strategy. The risk is $2,650 per contract plus slippage and commission, however, in Monday's trade, that will be raised to 2966 as the chart structure will improve daily due to the lower volatility.

In my opinion, I believe the stock market will experience a Santa Claus rally while breaking the all-time high, which was hit on July 26th at 3032 as the U.S economy is outstanding, which should continue to push prices higher.

The S&P is trading above its 20 and 100-day moving average as the trend is higher as we await more earning reports next week. So far, they have generally been very solid coupled with the fact that interest rates around the world remain at historic lows, so play this to the upside.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
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.

Orange Juice Futures

Orange juice futures in the January contract is currently trading higher by 20 points at 100.95 this Friday in New York as prices look to be bottoming in my opinion. Prices are trading right at their 20-day but still below their 100-day moving average, which stands at the 106 level as the volatility has come to a crawl.

Juice prices have been stuck in a seven-week consolidation pattern. I will be looking at buying a futures contract if prices break the October 8th high of 107.05 while then placing the stop loss at the August 19th contract low of 96.90 as the risk would be around $1,500 per contract plus slippage and commission.

As I have written about in previous blogs, the longer the consolidation, the stronger the break out as we enter the volatile winter season, which could produce a frost in the state of Florida, which would send prices sharply higher as that situation has occurred multiple times in the past. However, weather conditions are ideal, so be patient and wait for the break out to develop.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cotton Futures

Cotton futures in the December contract is currently trading at 65.00 after settling last Friday in New York at 65.16 unchanged for the trading week as the volatility has come to a crawl.

I have been recommending two bullish positions initially from the 61.50 level, then adding a 2nd contract at 63.60. If you took those trades, continue to place the stop loss under the 10-day low, which stands at 61.72 as an exit strategy as the chart structure will also improve in next week's trade. Therefore, monetary risk will be lowered.

Harvest is in full swing in the southern part of the United States, keeping volatility low as demand has come back due to some large purchases from China, which is a terrific thing to see and will support prices going forward.

Cotton prices are trading above their 20 and 100-day moving average as this trend is strong, so continue to play this to the upside as I think the 70 level could be in the cards in the coming weeks ahead.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Sugar Futures

Sugar futures in the March contract are currently trading at 12.30 a pound reversing some of the losses that we witnessed over the last several days as prices declined yesterday, falling to a fresh 1-month low.

Negative carryover from last Thursday's forecast from Rabobank continued to weigh on sugar prices after Rabobank said that it expects "significant" sugar exports from India in 2021 as ample rains boost India's 2020/21 sugar crop. I am sitting on the sidelines as this market remains very choppy as I am advising clients to avoid and look at other markets that are beginning to trend like the precious metals.

Sugar prices are trading below their 20 and 100-day moving average as the trend is slightly lower as the volatility remains low as well. However, prices are near major support as I think the downside is limited as I will not go short, so be patient. My only soft commodity recommendation is a bullish cotton trade which continues to climb every week, but these commodities can go in opposite directions as that is happening at this time.

TREND: MIXED - LOWER
CHART STRUCTURE: POOR
VOLATILITY: LOW

Wheat Futures

Wheat futures in the December contract settled last Friday at 5.32 a bushel while currently trading at 5.21 down about 11 cents for the trading week, still digesting the recent run-up in prices.

I have been recommending a bullish position from around the 4.82 level, and if you took that trade place, the stop loss at the 10-day low at 5.04 as the chart structure is excellent.

Canadian harvest activity accelerated with Saskatchewan up 20% on the week to 84% complete as the International Grain Council revised their September estimates for 19/20 world carryover stocks down 1 MMT to 271 MMT for October's estimate. They also changed world production and consumption, each lower by 1 MMT as the Australian production was trimmed to 17 MMT, which is now below a year ago.

Wheat prices are still trading above their 20 and 100-day moving average, which tells you that the trend is higher, so stay long and continue to place the proper stop loss as prices are still hovering around a three month high.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Trading Theory

What Is The RSI Oscillator? ---The RSI oscillator ranges from 0 to 100 and when a commodity is deemed to be at overbought levels when the RSI approaches the 70 level and beyond meaning if the oscillator has an overbought condition of 92 that is higher and even more of an overbought condition then the 70 level and could mean that it's getting overvalued and is a good candidate for a short term pullback.

On the other hand, if the RSI approaches 30 or below, that is an indication that the commodity may be getting oversold and therefore likely to become undervalued. The closer to zero, the more oversold the commodity has become, and the odds can increase for a kickback.

If you are using this indicator, you will be trading counter-trend, meaning that you are always buying in a down market and selling in an upmarket or using the oscillator to determine when to take profits. In my opinion, this indicator should be used with other indicators when establishing a position or when exiting a 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
Seery Futures
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Twitter–@seeryfutures
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.