We’ve asked Michael Seery of SEERYFUTURES.COM 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 Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.
Precious Metal Futures--- The precious metals had a wild trading session this Friday afternoon in New York and an extremely volatile week with prices fluctuating on news about the fiscal cliff coming out basically hourly for the last couple of days sending prices sharply lower with silver this afternoon in the December contract trading at 33.36 down around $1.16 after making new highs in yesterday’s session and for the 3rd straight day having a $1 dollar move up or down still trading above its 20 and 100 day moving averages and in my opinion I think you will see extreme volatility going into the last days of December due to the fact of the nonsense that is going on in Washington DC while gold futures are down $19 this afternoon in the December contract trading at 1, 709 still stuck in a trading range unable to breakout from this recent trading range with the contract highs in gold at 1,801 which was hit in February and in my opinion I still think the precious metals are headed higher despite today’s activity. Copper futures have broken out to a 3 week high rallying 360 points today at 362.50 in the December contract and I cannot tell you the last time I saw sharply lower prices in silver and gold and higher prices in copper so today is kind of and enigma in my opinion. The U.S dollar is lower against the foreign currencies today but that is not helping the commodity markets which basically are sharply lower across the board except for the energy sector pushing traders to take profits on recent gains in the precious metals, however if you can stomach these large down moves I believe in the long run silver is going into the 40 – $50 range and I do think gold prices are bottoming down at these levels and I do look for contract highs by the end of the year. In my opinion if the fiscal cliff is resolved I believe that stock prices and commodity prices across the globe will rally sharply due to the fact that the uncertainty has finally been resolved and we could focus on what really matters which is easy monetary policies for 4 more years. TREND: HIGHER CHART STRUCTURE: EXCELLENT
Grain Futures--- The grain futures this afternoon in Chicago also ended in a very volatile week with soybeans in the January contract down around $.7 a bushel trading at 14.41 trading under the 20 and 100 day moving averages after rallying about $.80 from recent lows looking to setback about a 50% retracement and in my opinion I do believe that the lows are in the soybean complex and I do think higher prices are here to come especially if the hot dry weather continues in South America which propped prices up only have traders take profits before this weekend. Corn futures still stuck in a range and hit the higher end of the trading range earlier in the week only to selloff in the last couple of trading sessions down another 3 cents in the December contract at 7.49 a bushel also pushing wheat prices sharply lower after the recent run-up on concerns about Kansas be an extremely dry jeopardizing the crop production for this year, however prices are lower for the second consecutive day down another $.22 at 8.63 a bushel in the March contract still stuck in a 16 week consolidation with the oat market getting crushed in the last three days finishing down another $.4 cents at 3.57 in the December contract and generally those two commodities go hand-in-hand. I have turned bullish the grain market I think the harvest lows have been hit with today just a bad day with traders selling everything they could except for the energy sector but I think longer-term soybeans look very attractive down at these levels and remember they sold off about $3 dollars from the summer highs and they don’t have a large carryover and if any weather problems happen in South America that could propel soybeans sharply higher while the demand is still there with China coming back into the market at these lower levels. Soybean oil on the daily chart may have double bottomed down about 35 points today at 49.78 in the January contract, however this is been the weakest commodity in the grain market for the last six months because there really hasn’t been much demand for oilseeds around the world but I do like the chart on a daily basis and if you’re looking to get long this market place a stop below the contract lows remembering always try to minimize monetary risk by using stops otherwise you could get in serious trouble. TREND: SIDEWAYS –CHART STRUCTURE: EXCELLENT
Energy Futures--- The energy futures this week bounced around on news coming out of Washington with crude oil ending up for the 2nd consecutive trading session in the January contract trading at 88.64 a barrel trading above its 20 day moving average but still far below its 100 day moving average which is at 91.86 and it looks to me on the daily chart like a rounding bottom is starting to occur with major resistance right around $90 a barrel finishing slightly higher for the trading week and what should be an extremely volatile next week as we get closer and closer to the fiscal cliff announcement. Heating oil futures were up 30 points today currently trading at 306.00 slightly lower for the trading week trading above its 20 and 100 day moving averages with major resistance at 3.10 gallon in my opinion will be broken next week and I do think that the energies are headed higher with unleaded gasoline finishing higher for the week and is the strongest commodity in the energy sector trading above its 20 and 100 day moving average trading at 2.7650 down 230 points for the trading session after hitting a 5 week high and it looks to me that prices have bottomed out and I think there’s a possibility that unleaded gasoline can trade as high as $3 dollar a gallon level by Christmas time especially if there are any problems in the Middle East or tensions with Iran’s nuclear facilities which I do think one day will have to be targeted by the U.S government or the Israeli army therefore pushing prices up tremendously because time is running out on Iran because they are getting very close to the nuclear bomb. The chart structure in the crude oil and its products is very solid at this point allowing you place stop losses relatively close to where the futures contracts are currently right now limiting monetary losses if you are wrong so I am suggesting to buy the entire complex placing stops at the 10 day low therefore reducing as much risk as possible. TREND: HIGHER---CHART STRUCTURE: EXCELLENT
Currency Futures--- The Euro currency has broken out to a 4 week high closing higher by 20 points this Friday afternoon finishing up for the week trading above its 20 and 100 day moving average on optimism about Europe’s debt situation getting better propping up prices for the week while the U.S dollar was down another 30 points today hitting a fresh three-week low trading below its 20 and 100 day moving average and for the week was basically unchanged and in my opinion I believe Europe is a complete mess and I really don’t believe these rallies in the Euro, however sometimes prices go higher or lower for no reason at this point I believe that the Euro will head lower over the course of time but right now is breaking out to the upside leaving traders shaking their heads. The one currency that has been in an absolute free-for-all is the Japanese Yen down another 50 points trading below its 20 and 100 day moving average hitting a fresh 8 month low today on pessimism about Japanese economy with the government also lowering rates once again basically at zero which it has been for many years and to me it looks like the Japanese economy will stay stuck in the mud for decades to come due to the fact that they have no in innovation still relying on electronics with such companies as Sony which continue to head lower while years ago were one of the best companies around, however the TV industry has become very competitive with high competition and very low margins while in the United States manufactures are doing a better job. The Mexican Peso which I talk about once in a while is continuing to go higher which is generally follows the stock market here in the United States hit a six week high trading above its 20 and 100 day moving average, however only slightly higher for the week in a very nonvolatile trade while the British Pound is slightly lower this afternoon and is also trading above its 20 and 100 day moving average hitting a fresh three-week high today while basically being unchanged for the trading week. Traders are focused on the fiscal cliff which is 31 days away if that is resolved you will see the U.S dollar fall sharply lower against all of these currencies except possibly the Yen but it’s getting into crunch time and who knows what those buffoons in Washington will finally decide and when they will decide on compromising. Many of the currencies have terrific chart structure meaning when you look at them on a daily chart they are either grinding slightly higher over the course of time or grinding slightly lower over a course of time allowing traders to be able to place tight stops therefore reducing monetary losses if they are wrong.
What Is Chart Structure? --- What do I mean when I talk about chart structure and why do I think it is so important when deciding to enter or exit a trade? I define chart structure as a slow and 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 and allowing you to place a stop loss with will be 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 but markets that continue to trend like the current soybean complex allowing for you to place close stops as it continues to fall dramatically. I always 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 loses. If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
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.
Orange Juice Futures-- Orange juice prices sold off 250 points for the 2nd time in 5 trading sessions blamed on profit taking after the sharp run up in prices that we have had in recent weeks to close at 121.65 in the January contract still trading way above its 20 and 100 day moving averages pushing against last September highs of 130 and if prices breach that level you’re looking at 1 year highs in orange juice after last year’s complete debacle on prices sending orange juice from 180 to 97 is just a matter of weeks while consolidating in the last several months looking to break out to the upside as we enter winter or frost season which is placing a price premium as we head into the volatile months. It would not surprise me if prices head back down to the 120 level which is around the 50% retracement from the recent run up so I would keep an eye on that level as an entry point to go long. If you look at orange juice on the daily chart it does not have very good chart structure because the rallies have all been in the last two weeks if you look at the monthly chart on orange juice it has outstanding chart structure with a triple bottom looking to break out of a tight trading range over the course of time and in my opinion I believe the lows are in orange juice at this time and I see higher prices especially with the possibility of a frost occurring in the upcoming crop year. If you are looking to buy orange juice my recommendation is to buy the futures contract and place a stop below recent contract lows which at this point is about risk of around $1700 per contract because prices have shot up quickly in the last two weeks but if we have a consolidation for a week or so then you should be able to place your stop at a higher level therefore limiting risk substantially. TREND: HIGHER–CHART STRUCTURE: TERRIBLE
Coffee Futures--- Coffee futures in New York this afternoon are sharply lower currently trading at 150.15 in the March contract down another 650 points after rallying in the last 2 sessions only to give it all back this afternoon still right near a fresh 2 1/2 year low continuing its bearish momentum closing basically lower every single day on the fact that the International Coffee Organization has forecasted 2012 – 13 coffee production up 9.3% at a record 147 MMT also with the Central America crop which could be huge as well pushing prices sharply lower in the last couple of months. Demand for coffee at this point in time is relatively low and that is the reason why you have excess surpluses, however all of the statistics that I just mentioned are in the past not future statistics so things can change very quickly just like they did in corn, soybeans, and wheat during the summer drought when prices kept going lower and then turned on a dime due to the drought so at this point I think you are starting to squeeze blood out of a turnip and if your long term investor I think these are some very good opportunities to get long this market and in my opinion I think prices will be higher in 3 to 6 months. If the fiscal cliff here in the United States is resolved in my opinion that will send commodity prices sharply higher as well as the stock market and I think that will create the short term bottom in coffee prices but at this point in time the trend is simply lower, however I’m looking at prices bottoming at these levels remembering always to use a stop loss if you are wrong to try and minimize monetary losses. I do believe that commodity prices have turned and are heading higher and if I was short the coffee market I would be placing a very tight stop or flat out taking profits at this time. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Livestock Futures--- Livestock futures settled lower across the board this Friday afternoon after live cattle climbed near all-time highs earlier in the week in the February contract finishing lower by 150 points trading above its 20 and 100 day moving average down around180 points for the week giving back some of the recent gains that occurred earlier with major resistance at 1.33 a pound which is all-time high and in my opinion today was just a down day in many commodities an overreaction to the fiscal cliff news and I do believe in my opinion that cattle prices are headed higher. The cattle prices for the January contract were down by 92 points settling at 145.82 a pound right near its July 17th contract low of 142.37 trading below its 20 and 100 day moving average down around 200 points for the trading week with high corn prices still putting a lid on feeder cattle prices and in my opinion I do believe corn prices are headed higher and they will be expensive for a long time to come so the real bull market is in the cattle is the live cattle not the feeder cattle. Lean hog futures were down only five points today in the February contract at 8710 having a terrific rally in the last couple of months due to the fact that the herds are the lowest in a half a century and I do believe that hog prices are headed higher going into the winter time especially we do have an extremely cold winter I think the live cattle and hog prices will go higher ,however this weekend in Chicago we will be breaking record temperatures once again for a three-day stretch of 60° in December which is unheard of and has only happened 3 times in a 143 years while the Midwest is still above average temperatures and the Great Plains are still suffering a drought which will make this spring and summer extremely interesting to see if there’s a repeat of what happened last year.
If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
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.
Michael Seery, President
Seery Futures
Twitter–@seeryfutures
Phone # (800) 615-7649
