Gold Futures
Gold futures in the April contract is currently trading at 1,497 an ounce after settling last Friday in New York at 1,516. However, that doesn't tell you the whole story as prices had a $125 range on Monday opening sharply higher and then plunging to a 7 month low as prices traded down to the 1,450 level in a highly volatile trading week.
The U.S. stock market was sharply lower once again with wild price swings daily as the Coronavirus has thrown a wrench into the closet towards many different commodity sectors. I am currently not involved in this market as the risk/reward is not in your favor to take a bullish or bearish position as the volatility is too high.
Gold prices are trading below their 20 and 100-day moving average as the trend is lower as prices have dropped over $200 over the last 2 weeks as nobody seems to want to own anything at the current time. Margin calls are to blame for the weakness that we have experienced over the last several days as silver prices have also hit decade-low putting pressure on gold as well. However, I do think the downside is limited. Still, I will wait for the chart structure to improve, coupled with lower volatility.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH
Silver Futures
Silver futures ended the week on a positive note up $0.45 at 12.58 an ounce after settling last Friday in New York at 14.50 down over a $1.80 for the trading week hitting an 11-year low as sheer panic has entered the commodity and stock sectors due to the Coronavirus.
Silver prices topped out on February 24th at $19 as we've plunged over the last month as nobody wants to own anything at the current time until some type of stabilization with the U.S. stock market occurs as that might take some time. I am not involved as the volatility is too high; therefore, the risk/reward is not in your favor as we will have to see what the government bailouts look like as we will get more clarity on that situation in the coming days ahead.
The volatility in silver is exceptionally high at the current time, and if you are involved, make sure that you only risk 2% of your account balance on any given trade as the U.S.dollar has hit a 3 year high this week. That is also putting pressure on silver, and the commodity sectors in general as nobody wants to own the foreign currencies.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH
Crude Oil Futures
Crude oil futures in the May contract is currently trading at 24.85 after settling last Friday in New York at 32.11 down over $7 for the trading week hitting an 18-year low as demand has disappeared because major industries across the United States have entirely shut down. Coronavirus is to blame for the weakness in oil prices. A price war between Saudi Arabia and Russia as overproduction continues to put pressure on prices. I still believe we will crack the $20 level in the coming weeks ahead.
Prices traded as low as 20.52 earlier in the week while then gaining support Thursday after the U.S. Department of Energy said it is seeking to buy 30 million bbl of crude oil for the Strategic Petroleum Reserve (SPR). At the current time, there are very few bullish trends. Still, the problem is prices fell out of bed so quickly that the risk/reward is not in your favor. However, I am certainly not recommending any type of bullish position until some kind of clarity comes about with the U.S economy going back to work as it doesn't look like that's going to happen for several more weeks. If you are short, I would place a tight stop-loss.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH
S&P 500 Futures
The S&P 500 in the June contract settled last Friday in Chicago at 2684 while currently trading at 2400 down over 280 points for the trading week as prices now have dropped about 35% off of their all-time high as sheer panic has entered U.S. equities.
Prices traded as low as to 2262 earlier in the week as the volatility is as high as I've ever seen. We have witnessed limit up or limit down situation daily with huge price swings and massive volatility all due to the Coronavirus as that has shut down multiple industries in the United States as people are stuck at home. I am not involved, but I am looking at a possible bullish position as I think many stocks look very cheap as we will get through this situation, but it might take another month or so as then the economy will rebound. The S&P 500 is trading far below its 20 and 100-day moving average as the trend remains to the downside as prices traded near a 3 year low this week as some stocks are down 60%/70% or even more as the airline industry and restaurant industries have collapsed. The U.S. government is looking to issue checks next week to help support people who have lost their jobs, but at the current time, I am advising clients to avoid this market as the risk is not in your favor.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH
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.
Coffee Futures
Coffee futures in the May contract settled last Friday in New York at 106.75 a pound while currently trading at 118.20 up over 1,100 points for the week. Coffee-trader Volcafe told clients that the coronavirus pandemic is causing logistical hold-ups that will become "more widespread" in major coffee-producing countries, which may cause delays of coffee shipments to ports and other transport operations.
If you take a look at the daily chart prices continually bounce off the100 level as it looks like a long-term bottom is in place as I'm currently not involved as prices hit a 2 week high as I will keep a close eye on this market as the volatility certainly has come to life.
Coffee prices are trading above their 20 and 100-day moving average, telling you that the trend may have turned to the upside while trading higher for the 3rd consecutive session. The commodity and stock markets have experienced tremendous volatility due to the Coronavirus, as I don't think that the situation is going to end anytime soon. The U.S. dollar hit a 3-year high and an all-time high against the Brazilian Real, which is a fundamental negative factor towards prices as there is a lot of uncertainty, so avoid this market at the current time.
TREND: MIXED - HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH
Cotton Futures
Cotton futures in the May contract is currently trading at 54.16 after settling last Friday in New York at 60.49 down over 600 points for the trading week hitting a 10-year low as weakening demand due to the Coronavirus continuing to put pressure on prices. Many commodities this week hit a 10 year low as there is so much uncertainty because many U.S. industries have shut down entirely as many states are telling people to stay at home; therefore, commerce has come to its knees.
I am not involved. However, it looks like lower prices are ahead as prices are trading far below its 20 and 100-day moving average down for the 5th consecutive session as we start to enter the spring planting season, which could put a floor on prices, especially if a weather market comes about, such as a drought.
I'm certainly not recommending any type of bottom fishing, as that would be counter-trend trading. If you are short, I would place a tight stop-loss as an exit strategy because when there is more clarity on the Coronavirus, you will see rallies across the board, and they could become violent to the upside.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH
Oat Futures
Oat futures in the May contract settled last Friday in Chicago at 2.68 a bushel while currently trading at 2.65 down about $0.03 for the trading week experiencing high volatility as this is my only grain recommendation at the current time as I was stopped out of wheat yesterday.
I have been recommending a bearish position over the last month or so from around the 2.97 level & if you took that trade, the stop loss stands at 2.82 as the chart structure will improve in Monday's trade.
Prices are still trading under their 20 and 100-day moving average; however, for the bearish momentum to continue, prices have to break the March 16th low of 2.48, in my opinion. The chart structure is excellent at the current time because prices really have gone nowhere over the last week. There is so much uncertainty at the present time because of the Coronavirus, as all of these markets are headline-driven and could flip flop on a dime. Make sure you place the proper amount of contracts while risking 2% of your account balance on any given trade as we are in some crazy times.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH
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.
