Natural Gas Futures
Natural gas futures in the September contract settled last Friday in New York at 1.86 while currently trading at 1.85 unchanged for the trading week and looking for a trend to develop to the upside, in my opinion. Currently, I am not involved as I am waiting for a bullish trend to develop. I think there's a high probability that a spike bottom was created on June 26th at 1.58. In general, the commodity markets are starting to show signs of life as the U.S. dollar continues its bearish trend.
Gas prices are now trading above its 20-day but still below its 100-day moving average. However, if you take a look at the daily chart, major support has developed between 1.60/1.65, so look to play this to the upside in the coming weeks ahead as I believe the risk/reward would be in your favor. The chart structure will also start to improve daily; therefore, the monetary risk will be reduced in next week's trade. Historically speaking, prices are incredibly depressed.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
Silver Futures
Silver futures in the September contract settled last Friday in New York at 22.85 an ounce while currently trading at 23.94 up over $1.00 for the trading week as prices are right near a 7-year high.
I have been recommending a bullish position from around the 18.61 level. If you took that trade continue to place the stop loss under the 10-day low, which now stands at 20.31 as an exit strategy. However, the chart structure will improve tremendously next week as the monetary risk will be reduced.
Silver is trading far above their 20 and 100-day moving average as this trend is very strong as I also have a bullish platinum recommendation at the current time. Still, this whole sector has the strongest strength to the upside as gold prices finally cracked the 2,000 level in today's trade. The next major level of resistance stands around the 26 level which was touched earlier in the week. I still think we could touch the 30 level especially with the kind of volatility that we are currently witnessing, so stay long as the fundamental and technical picture for this commodity remains strong.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH
Platinum Futures
Platinum futures in the October contract settled last Friday in New York at 956 an ounce while currently trading at 928 down about $28 for the trading week experiencing an incredibly volatile trading manner. Earlier in the week, prices cracked the $1,000 level before profit-taking came about.
I have been recommending a bullish position from around the 868 level, and if you took that trade, continue to place the stop loss under the 2 week low standing at the 860 area as an exit strategy. However, the chart structure will start to improve in 2 trading sessions; therefore, the monetary risk will be lowered.
The U.S. dollar continues to hit a multi-year low as that is a fundamental bullish factor towards higher prices. The volatility certainly has come to life over the last several weeks, and I still believe higher prices are ahead. Platinum is trading far above its 20 and 100-day moving average, telling you that the trend is to the upside. I will not be adding more contracts due to the high volatility, as the risk/reward would not be in your favor. For the bullish momentum to continue, prices have to break the 1,000 level, which could happen next week as I still think prices look cheap.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH
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Soybean Futures
Soybean futures in the November contract is currently trading higher by 4 cents at 8.92 a bushel after settling last Friday in Chicago at 8.99 up slightly for the trading week looking for some fresh news to dictate short-term price action.
I have been recommending a bullish position over the last month or so from around the 8.97 level, and if you took that trade, continue to place the stop at 8.80 on a closing basis only as the chart structure is outstanding because prices have gone nowhere. For the bullish momentum to continue, prices have to break the July 6th high of 9.12. Volatility has come to a crawl since we are witnessing excellent crop conditions in the Midwestern part of the United States, which should produce an excellent crop come harvest time, which comes about in October and November.
Soybean prices are still trading above their 20 and 100-day moving average as the trend is higher as I am surprised how prices have held up despite the fact of a very bearish fundamental picture, so stay long and don't 2nd guess as we will see what next week's trade brings.
TREND: MIXED - HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: AVERAGE
Live Cattle Futures
Cattle futures in the October contract is currently trading at 107.80 after settling last Friday in Chicago at 105.10 as I've been recommending a bullish position from around the 106.50 level and if you took that trade continue to place the stop loss under the 2 week low at the 105.57 level.
Originally the recommendation was in the August contract from around the 99.80 level as we rolled out a couple of days back as the bullish trend continues as prices have now hit a 5 week high. If you take a look at the weekly chart, prices are trading above their 20 and 100-day moving average as I think we could test the 115 level in the coming weeks ahead as historically speaking prices look cheap. The chart structure will not improve for another four trading sessions, so you will have to accept the monetary risk as volatility remains relatively low.
I don't think that situation will remain for much longer, so play this to the upside as I will be looking at adding more contracts once the risk becomes more in your favor.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE - LOW
Sugar Futures
Sugar futures in the October contract is trading higher for the 2nd consecutive session up another 26 points or 2.15% at 12.37 a pound after settling last Friday in New York at 11.49 up nearly 90 points for the trading week.
I will be recommending a bullish position if prices close above the June 10th high of 12.40 while then placing the stop-loss under the July 14th low of 11.27 as the risk would be around $1,200 per contract plus slippage and commission. Sugar prices are right near a 5 month high trading above their 20 and 100-day moving average as the trend has turned to the upside.
The U.S. dollar has continued its bearish trend this week, hitting another contract low today as that is a bullish factor towards the commodity markets and especially the agricultural sectors. The next major level of resistance stands at the 14 area as there is significant room to run in my opinion, so keep a close eye on this market as we could be involved on the close as the risk/reward would be in your favor to take a bullish position.
Sugar prices also have underlying support from sugar crop concerns in Thailand, the world's 2nd largest sugar exporter. Czarnikow Group said that it projects that Thailand's 2020/21 sugar production could drop more than -10% y/y to an 11-year low of 7.4 MMT, well below USDA estimates of 12.9 MMT, due to the worst drought in four decades.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
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