We’ve asked Michael Seery of SEERYFUTURES.COMan IB of Peregrine Finanial Group to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Busines, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.
Bond Futures-- The bond market rallied sharply this week with today’s action slightly lower in Chicago however this week bonds climbed right near all-time highs in the bond futures and all-time lows in the bond yields with the 10 year note yielding 1.70% a new record low breaking the old lows of 1.83% while the five-year note is at 0.75% breaking the old record low of 0.82%. The 30 year bond yield is trading at 2.80% and the futures are at 148-10 which is an all-time high as well. What is the bond market telling us? When yields are at all-time lows that tells me that bond traders think the economy is not doing near as well as reported or the fact that the government is just purchasing so many bonds and pushing the yield so low because of the fact that we are $16 trillion in debt and the United States Federal Reserve does not want to pay high interest rates on that debt so they are forcing yields low which is exactly what Alan Greenspan the former Federal Reserve chairman did 10 years ago which many blame him for causing the housing bubble because of the fact that he kept interest rates so low for so long. The problem with really low rates is senior citizens who are trying to retire want to have some fixed income but there are no interest rates worth purchasing and they are forced to either buy stocks, land, or some other type of investment with risk. The great thing about buying a bond when you’re 75 years old is that it's guaranteed with no risk and you are guaranteed a certain rate of return which is what many people senior citizens relied upon or use to live on.
Precious Metal Futures--- The precious metals experienced huge price swings and volatility this week with gold last Friday settling at 1, 584 last Friday and trading all the way down the 1, 537 earlier this week before rallying sharply on Thursday and today currently trading around 1,592 an ounce actually higher for the week believe it or not with the strong performance on Thursday rallying over 40 dollars and on Friday up nearly 16 dollars an ounce once again on massive short covering and new longs finally entering the market thinking that prices have gotten fairly cheap. Silver futures for the week are still basically unchanged, however they did make new lows on Wednesday afternoon down to 26.73 which was a six-month low in silver prices before rallying later in the week to finish approximately at 28.75 right around unchanged for the trading week with weakness blamed on the Euro currency falling out of bed making new four-month lows against the U.S dollar earlier in the week. Copper prices were sharply lower for the week settling last Friday at 365 a pound in the July contract and closing out the week at 346.50 a pound due to a Chinese and European economic slowdown which definitely hurt copper prices and in my opinion even though we've had comebacks in the precious metals this week I am still bearish and I believe traders should take advantage of these higher prices because I do believe deflation is in the air and I believe that commodity prices are too high going into the summer months. Platinum futures also hit six month lows during the week which is been pulling the gold futures down with it and at this point in time platinum futures are trading about 100 dollars lower than the Gold which is been declining due to waning demand and a stronger U.S dollar. If you would like to talk to Michael Seery about trading concepts or strategies please call him at 800-615-7649.
There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Trading is not responsible for the accuracy of the information contained on linked sites.
Energy Futures--- The energy futures are down once again today and trading right near the lows of the trading week with crude oil down another $1.35 this Friday morning due to more pessimism about the European debt situation causing prices to be down around $5 dollars for the trading week from last Fridays closing price of 96.50 down around 4% for the week while unleaded gasoline for the June contract is higher by 150 points currently trading at 2.90 a gallon in a quiet trade so far in New York. Heating oil futures are down slightly currently trading at 2.84 a gallon also sliding for the week around 1200 points from last Fridays close of 2.96 a gallon and in my opinion like a been stating in previous blogs if you look back at 2010 when this problem came up for the first time crude oil prices plummeted on that news and then rebounded later in the year so prices are still relatively high if the situation gets worse but only time will tell. Natural gas futures are sharply higher once again today up another 14 points in the June contract to seven week highs at 2.74 with renewed optimism that demand will come back into this market with the next major level of resistance around 2.90.
Grain Futures--- The grain market has open mixed this morning with wheat futures brushing against 10 week highs up another 32 cents a bushel in the July contract currently trading at 6.90 and now has rallied about $.90 on the fact of a drought possibly occurring in Australia and one in Russia while there are also major concerns about the Great Plains being hot and dry as well causing a spike up in prices in the last several days. Corn futures are rocketing higher again and of also rallied about $.50 from the lows this week on large purchases by China causing prices to spike with major short covering in the last several trading sessions currently trading at 6.35 a bushel up for the 5th day in a row by 9 cents right near the highs for the week. Soybeans has an incredibly volatile week trading down sharply on Wednesday all the way down the 13.76 before skyrocketing later in the week traded as high as 14.38 a bushel however trading right around 14.09 a bushel in an incredibly volatile summertime trade down over 38 cents today. I was wrong in the grain market because I was bearish the wheat and corn but sometimes you have to tip your cap and that's exactly what happened, but remember you must always you stops in the markets when you wrong otherwise losses can get out of control and very difficult to get back if you get crushed on one trade. I try to remember the general rule of using 1% to 2% of your account balance on any given trade therefore minimizing your risk with a good money management system. Rough Rice futures for the July contract very quiet today at around down 12 cents at 15.14 in a pretty uneventful trading week
Meat Futures--- Live cattle futures traded higher once again in Chicago today by 50 points to trade at 118.45 a pound hitting a 7 week high in prices and higher for the 5th consecutive trading session and now on the daily chart has formed a possible head and shoulders bottom while finishing up over 300 points for this trading week on heavy volume. Feeder cattle prices for the week climbed over 400 points from Monday's low breaking out to a new 8 week high in prices and only about 350 points away from all-time highs. Feeder cattle prices have rallied sharply from contract lows which were hit about eight weeks ago around 150 a pound on the fact that the herd is the smallest since 1952 and there is still tremendous demand for beef even at these historic prices. Lean hogs prices have not rallied as sharply as feeder cattle or live cattle ,however it has climbed for the 5th consecutive trading day currently at 87.50 a pound and off about 300 points from its contract low which was hit two weeks ago brushing up against a 3 week high in price with a possible V-shaped formation on the daily chart suggesting a bottom might be in place
Stock Futures--- Stock futures are slightly lower again Friday afternoon in Chicago with the S&P 500 down 7 points currently trading at 1294 down by 55 points this week from last Fridays close hitting a new fresh 4 month low all due to the fact of a European slowdown and concerns that it could get out of hand spreading throughout all of the European countries while the Dow Jones futures also hitting a new fresh 4 month low currently trading at 12, 394 down 20 more points also lower by over 300 points for the week. The NASDAQ futures are down another 11 points currently trading in the June track at 2,493 down about 100 points for the week also down five trading sessions in a row however the NASDAQ is still up about 13% for the year that's how far we have rallied from January 1 even despite his recent setback. If the European crisis gets worse you will certainly see extreme volatility in the commodity and stock markets and in my opinion I would think it would be to the downside for banks and large funds would have to deleverage to raise cash and sit on the side-lines to minimize risk and that is what I think is happening this week with JP Morgan Chase losing around $3 billion and might have to unwind some positions thus causing extreme volatility in the last five trading sessions. The Vix indicator otherwise known as the fear index index is trading at about 27.00 about 32% higher in two weeks which means traders or investors are buying S&P put protection against their portfolio or speculating that prices are headed lower. The Vix was trading at about 15 just several weeks ago that’s how far it has rallied in the last month
Currency Futures--- The U.S dollar today is trading unchanged today selling off from early session highs on profit-taking currently trading 81.55 also creating a new four-month high with the British Pound continuing its bearish momentum down another 23 points currently trading at 1.5791 hitting a new fresh four month low. The Canadian dollar which I talked about in many blogs which had a 14 week consolidation breaking out to the down side a couple of days back down another 32 points at 9790 and in my opinion is heading lower while the Mexican Peso is hitting a new five month low down another 10 points currently trading at 7205 on major concerns of the European crisis getting much worse down the road. The U.S dollar is the safe haven when problems arise around the world or even in America like it did in 2008 with the banking and stock market collapse and if you remember the dollar rallied sharply against the foreign currencies and that is what you are seeing right now once again it is déjà vu all over again with investors seeking to own the reserve currency of the world which is the U.S dollar because there is a concern or a possibility that the Euro brakes up eventually. In my opinion I am still bearish all of the currencies against the U.S dollar and I think problems are on the horizon and I see the U.S dollar continuing to surge higher while investors flee out of the Euro currency and many of the other foreign currencies as well. The Australian dollar continues to make new contract lows down a whopping 112 points today trading at 6978 continuing its bearish momentum hitting a fresh new seven-month low. The Euro currency is slightly higher in today's trading session however it is still at a new four-month low trading at 1.2732 higher by only 17 points going into the close.
Cotton Futures-- Cotton futures are sharply higher this afternoon in New York rallying by 140 points currently trading at 75.30 after hitting a fresh contract low yesterday at just below 74.00 a bale all due to last week's crop report which states that carry over levels of cotton could reach record levels later this year sending prices sharply lower in the last 2 weeks. Cotton prices have fallen dramatically in the last 2 years when supplies were at its lowest level in many decades to the present situation of record supplies. The extremely high prices made farmers around the world want to grow cotton and that has caused prices to plummet. If you would like to talk to Michael Seery about trading concepts or strategies please call him at 800-615-7649.
Orange Juice Futures--- Orange juice futures this afternoon closed down around 300 points to103.00 a new fresh 2 year low in price also breaking sharply lower earlier in the morning and traded as low as 97.10 before rallying on the closing bell. The next level support is all the way down to the 2009 lows of around 70 which is still over 33 points away at the current levels but at this rate of decline who knows it could get there soon. Prices have dropped from 180 just 10 weeks ago to breaking 100 this afternoon which is a remarkable move and about a profit or loss on 1 contract of around $12,000 in just a matter of a little over two months. The one great thing about the orange juice market is prices just went straight down and they didn't have any false rally's to the upside scaring traders to cover positions so if you have been in orange juice you still might actually be short because it has just fallen out of bed and has been a terrific trade.
Michael Seery, President
Seery Futures
Twitter–@seeryfutures
Phone # (800) 615-7649
There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Trading is not responsible for the accuracy of the information contained on linked sites.
In all stock marketconditions there is always some way for turning losses into profit but stock market traders tend to ignore what is called smart trading techniques. Alert stock trader faces losses very less so be a alert trader and start enjoying daily profit from share trading
I'm short silver, platinum and palladium from since they got monthly red triangles, but I covered half my silver short on Friday and may cover the rest soon. The reason is that silver rebounded from the 27 dollar area, from where it successfully rallied three times last year. I actually opened a long gold position for a similar reason, although I'm keeping it on a tight leash for the moment. Remember, gold rallied last summer, when stocks cratered. Platinum and palladium have rebounded without conviction, which is waht you expect from metals that are mostly industrial. This is just to say that silver and gold, unlike other commodities, should not be considered to be 'safe' shorts. They may blow up on you if you just go blindly with the trade triangles. Happy trading!
you can't just go with the TT with metals, commodities or anything. After silver lost its embedded stochastic reading on the bounce, it will typically go to its 18 day moving average of closes (29.14 this morning), or exponential 21 day MA, if you will, where it will fight its battle to see if it resets for a short or busts through and tries to establish an uptrend. The trouble with going short at 29.14 is that it would turn the swingline up as the most recent higher low coming down was at 29.00, so the risk would be at 30.39 for the stop. Shorts should be lightened up on as it begins hitting the Bollinger Band on the way down while holding on to some to see if it tracks the B-band down and/or if the stochastic can convert from oversold to embed status.
At least this is how I understand to manage a position, not with TT's.
Sure wished I had used trailing stops instead of taking profits on my SPY/USO puts expecting some kind of bounce.