Coronavirus Boost Safe-Haven Futures

Gold Futures

Gold futures in the April contract is higher by $28 at 1,648 an ounce or 1.71% after settling last Friday in New York at 1,586 up about $63 for the week higher for the 7th consecutive session while also hitting a 7-year high.

At the current time, I'm not involved. However, if you have been reading my previous blogs, I am bullish gold as I think we will crack the 1,700 level, possibly in next week's trade, as there is too much uncertainty about the coronavirus at the current time.

Presently I have bullish recommendations in platinum and silver as the whole sector looks to move higher, in my opinion. If you are long a futures contract, I would continue to place the stop loss at major support standing at 1,550 as this trend is real and very strong to the upside as I see absolutely no reason to be short gold.

Fundamentally speaking, the concern that the coronavirus is spreading outside of China undercut stock prices and boosted the safe-haven demand for precious metals. Coupled with the fact on lower Chinese interest rates in the wake of the recent move by the People's Bank of China (PBOC) to cut rates by -10 bp on various bank loans and repo operations.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Silver Futures

Silver futures in the March contract is trading higher for the 6th consecutive session up another $0.26 at 18.58 an ounce or 1.45% after settling last Friday in New York at 17.73 up about 83 cents for the trading week as prices are near a 5-month high.

I have been recommending a bullish position from the 18.13 level, and if you took that trade, continue to place the stop loss under the 10-day low, which now stands at 17.44 as an exit strategy. The chart structure will not improve for another four trading sessions, so you will have to accept the monetary risk at this time.

Gold prices are up another $24 today, hitting a 7-year high. I think the entire precious metal sector is going higher. I see no reason to take a short position as the coronavirus looks to be getting worse and who knows how that situation it's going to end, so stay long and continue to place the proper stop loss.

The trend is to the upside as prices are trading far above their 20 and 100-day moving average as it looks to me that we will test the September 4th high of 19.87 possibly in next week's trade as the volatility is coming to life once again.

TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Platinum Futures

Platinum futures in the April contract settled last Friday in New York at 968 an ounce while currently trading at 983 up about $15 as I am now recommending a bullish position while placing the stop loss under the November 12th low of 874.

I want to give this trade some room as the risk is about $5,500 per contract plus slippage and commission. This trade should only be taken with a larger trading account. I will not raise the stop-loss for another couple of weeks as I think there's a very low possibility that prices will trade down to that level. The precious metal sector is very bullish at this time.

Platinum prices are trading above their 20 and 100-day moving average as the trend is clearly to the upside. Gold prices have hit a 7-year high today, and I also have a bullish silver recommendation, which continues to move higher. I think prices will test the contract high, which was it on January 16th at 1,046 in the coming days ahead.

The volatility is starting to expand as platinum historically speaking can have tremendous price swings daily, as that is why I'm giving this trade some significant room, but that will change soon.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

10-Year Note Futures

The 10-year note in the March contract settled last Friday in Chicago at 130/31 while currently trading at 131/25, continuing its bullish momentum all on concerns about the coronavirus continuing to spread throughout the world as this commodity is being used as a flight to safety.

The yield at the current time now stands at 1.47%. If you have been following any of my previous blogs, you understand that I think we could head down to 1.30% level. There is a high possibility that the Federal Reserve will cut interest rates this summer as rates will remain low for the foreseeable future.

I have been recommending a bullish position over the last month or so from around the 129/18 level, and if you took that trade, the stop loss now stands at 130/19 as the chart structure will continue to improve next week as the risk also will be reduced. The 10-year note is trading far above its 20 and 100-day moving average as this trend is getting very strong and if we can break the contract high, which was hit on September 4th at 132/09.

I think we could be off to the races, so continue to play this to the upside as I will be looking at adding more contracts once the risk/reward becomes more in your favor.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
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

Coffee Futures

Coffee prices experienced a wild trading week up 600 points this Friday afternoon at 111.00 a pound or 5.72% after settling last Friday in New York at 111.35, basically unchanged as this sleeping giant is starting to show some signs of life once again.

Currently, I'm sitting on the sidelines as I believe prices have bottomed out bouncing off of major support at the 100 level, which is about a 14-year low. Prices are now at three-week highs trading above their 20-day moving average, but slightly below their 100-day, which stands at the 114 level, so keep a close eye on this market as we could be involved in a bullish position soon.

Fundamentally speaking, weather concerns in Brazil as Somar Meteorologia reported on Monday that rainfall in Minas Gerais, Brazil's largest arabica-coffee growing region measured 131.8 mm in the past week or 304% of the historical average. Those heavy rains saturated Brazil's coffee fields and may curb coffee yields.

If you take a look at the daily chart, the down trend line which was very steep over the last couple of months has finally been broken. That is a bullish technical indicator for higher prices ahead as I will not take a short position as the downside is minimal.

TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Live Cattle Futures

Cattle futures In the April contract settled last Friday in Chicago at 120.32 while currently trading at 118.85 down about 150 points for the trading week continuing its bearish momentum.

I have been recommending a bearish position from around the 124.50 level. If you took that trade continue to place the stop loss on a hard basis only at 121.17. However, the stop loss will not be lowered for another seven trading sessions, so you will have to accept the risk at this time.

Cattle prices are still trading under their 20 and 100-day moving average as the trend remains negative. However, for the bearish momentum to continue, prices have to break the February 12th low of 116.65 as I still think there's a possibility that prices could go all the way down to the 110 level in the coming days ahead.

Volatility at the current time is increasing as we were sharply lower in yesterday's trade reversing some of the gains that we have witnessed recently. However, I think that was just a dead cat bounce due to oversold conditions, so stay short as a bottom has not been formed yet.

TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

Oat Futures

Oat futures in the March contract settled last Friday in Chicago at 2.96 a bushel while currently at 2.99 up about $0.03 as the volatility remains very low.

I have been recommending a short position from the 2.96 level while then placing the stop-loss above the 10-day high standing at 3.06. Due to expiration, we will have to roll over into the May contract next week if we are still involved, and if you take a look at the daily chart, the downtrend line remains intact.

Prices are still trading below their 20 and 100-day moving average; therefore, the risk/reward is in your favor, so continue to take a short position, in my opinion. For the bearish momentum to continue, prices have to break the February 14th low of 2.93 as the risk on this trade now stands around $500 per contract plus slippage and commission, which is suitable for most trading accounts.

TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Wheat Futures

Wheat futures in the March contract settled last Friday in Chicago at 5.42 a bushel while currently trading at 5.66. I have been recommending a short position from around the 5.44 level, and if you took that trade, continue to place the stop loss above the 10-day high standing at 5.66 as an exit strategy on a closing basis.

If we are stopped out will look at other markets that are beginning to trend as the precious metal sector by far is the strongest uptrend at the current time. The grains remain choppy. Wheat prices are now trading above their 20 and 100-day moving average as the trend has changed after hitting a 7-week low last week as concerns about the French crop have supported prices in this week's trade.

Volatility is starting to increase as my only other recommendation out of this sector is a short oat position, which has gone sideways. Fundamentally speaking, the USDA pegged 2020 U.S. wheat acreage at 45 million acres as the volatility will increase substantially as we enter the spring and summer months, which is right around the corner.

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