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.
Energy Futures--- The energy futures this week experienced volatile trading especially in the January contract with heating oil finishing down 1500 points for the week which is around $6000 per contract trading below its 20 and 100 day moving average settling lower for the 5th consecutive trading session closing right around 2.9250 a gallon with the next major support at 2.80 a gallon and in my opinion I do believe heating oil prices are headed lower due to an extremely mild winter so far. There is a gap on the daily chart in the January contract at 2.90 I do believe that gap will be filled which is still about 250 points away and I do think it could head lower here in the short term. Unleaded gasoline is higher by about 90 points this Friday afternoon; however for the week were down around 100 points closing below its 20 and 100 day moving average with next major support at 2.53 a gallon which also is at a 4 month low. Crude oil futures for the January contract are trading below their 20 and 100 day moving average settling down nearly $3 dollars for the week with major support at 84.50 which was hit back in November which looks to me like a rounding bottom and a possible re test of recent lows here in the short term. I still remain bullish crude oil and unleaded gasoline and I think once the fiscal cliff is resolved I think prices in commodities and stocks will shoot higher due to the fact that the uncertainty has finally finished and we could focus on supply and demand once again. Crude oil at this point is basically being traded technically with ample supplies and economies around the world slowing down putting a lid on prices here in the short term, however I do believe that the Iranian conflict will literally come to a head here in the next couple of months which in my opinion will send energy prices sharply higher. TREND: NEUTRAL---CHART STRUCTURE: EXCELLENT
Grain Futures-- The grain market was lower across the board this Friday afternoon with soybeans in the March contract down around $.14 a bushel still trading above its 20 day moving average but below its 100 day moving average which at this point stands at 15.27 which is just an eyelash away still ending the week higher by around $.40 and by far is the strongest market in the grain complex. Corn futures are down 15 cents today trading lower for the 2nd day in a row right near a 3 week low unable to break above 7.69 last week which is also 13 week high and the 100 day moving average finishing down $.15 this Friday afternoon and finishing down right around $.15 for the week with the next major support at 7.15 still stuck in a major tight consolidation unable to breakout, however this Tuesday is a crop production report which will release supply demand figures that certainly will have an impact on short-term prices. Wheat futures for the March contract are trading at 8.61 a bushel still stuck in 18 week major consolidation still trading below its 20 and 100 day moving average right at the bottom end of the recent trading range and if it breaks 8.45 a bushel which happened on November 16th of this year that would create a 5 month low therefore I believe that the large speculators would come in and sell this market and I would be advising traders to get short this market as well a putting a stop above the 10 day high ,because in my opinion when you break out of a consolidation of nearly 5 months you want to go in that direction because it can be powerful making sure that you do place a stop loss trying to minimize monetary risk if you are wrong. I’m still bullish the soybean complex but wheat and corn I am neutral at this point I do believe soybeans are underpriced with a small carryover historically but this Tuesdays crop report will definitely propel prices in one direction or another. TREND: HIGHER IN SOYBEANS—NEUTRAL CORN & WHEAT—CHART STRUCTURE: EXCELLENT
Precious Metal Futures-- The precious metals this Friday afternoon closed slightly higher in a wild trading after the unemployment report showing the unemployment rate hit 7.7% sending gold nearly down $20 at one point before rallying to finish up around $2 dollars in the February contract at 1, 704 with major support at 1, 680 still trading below its 20 day moving average but right above its 100 day moving average finishing down around only $8 dollars for the week hitting a one-month low. If gold futures can break 1,674 on the downside that would be a 4 month low but at this point it is stuck in a consolidation in the last couple of weeks and in my opinion I do believe that gold and silver prices are headed higher and I do believe that the fiscal cliff will be resolved sending money back into the precious metals. Silver futures for the March contract are still trading above its 20 and 100 day moving average down around $.15 for the week which is a very small move percentage wise with major support at $32 a bushel and in my opinion I still believe we will break contract highs before Christmas time which was hit on October 1st at 35.59 and which is still over $2 dollars away due to the fact that U.S dollar could continue to grind lower with all of the printing of the Obama administration is doing and a possible announcement of QE4 on December 12th when the Federal Reserve meets. Copper futures are up another 250 points today and up about 200 for the week hitting a fresh six-week high trading significantly higher than its 20 and 100 day moving average and is by far the strongest metal in recent weeks, however I do think copper prices are limited because of the fact that China and many economies are slowing down so I’m still more favorable on silver and gold at this point. TREND: NEUTRAL---CHART STRUCTURE: EXCELLENT
Cotton Futures--- Cotton futures in the March contract basically finished right around unchanged this afternoon in New York right around 73.70 still trading above its 100 and 20 day moving average grinding higher in the last couple of weeks finishing slightly lower for the week in a pretty uneventful trade. There is major resistance at 74.25 and if prices can break above that level possibly on this Tuesdays crop report you could see a retest the contract highs which were hit several months ago around 77.50 with major support at the contract low of 70 – 72 level which I think will hold and in my opinion I am bullish cotton prices at these levels I think that could start to head higher especially if grain prices remain higher over the course of time which could have farmers planting more grains than cotton this spring therefore reducing the production and the supply of cotton propping prices higher but springtime is still quite a distance away so this is strictly speculation on my part. The cotton chart on the daily basis has terrific chart structure meaning it is continually grinding higher and I like markets that trade like that because you are able to place a stop loss without risking exorbitant amounts of money it also means that volatility is relatively low and cotton can be an extremely volatile market but at this point with the growing season over it is a very quiet market and I suggest traders get long making sure you place a stop at the 10 day low minimizing risk and monetary loss. TREND: HIGHER---CHART STRUCTURE: EXCELLENT
Coffee Futures--- Coffee futures in the March contract closed up nearly 300 points today to close right around 153.75 a pound now trading above its 20 day moving average for the first time in quite some time, however still far below its 100 day moving average which is at 168.00 which is still a good distance away. Coffee futures this last Wednesday hit fresh contract lows of 146.35 before rallying substantially around 700 points to close right near the highs the week with major resistance at 1.57 a pound and if those prices are breached next week you would actually hit a 3 week high in coffee prices and as I have stated in many previous blogs I believe you’re squeezing blood out of a turnip down at these levels if you are short because I’ve seen many coffee moves that will jump 1000 points in a matter of a week or so and I think coffee prices at this point could definitely get back up into the 1.70 level in the next couple of weeks on renewed demand optimism. There is a lot of bearish news surrounding coffee prices in the last couple of months including a possible record harvest in Central America and we already had a tremendous harvest in Brazil with large supplies and waning demand, however all of the statistics are old news and I do believe we are in a bottoming process in coffee and if you’re a longer-term investor coffee prices at this level could be a terrific buy. CHART STRUCTURE: EXCELLENT
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
Sugar Futures--- Sugar futures for the March contract finished down 16 points this Friday in New York settling at 19.20 still stuck in a 4 week trading range with major support between 19 – 20 which has been trading in the last month with the next major support at the contract low of 18.66 which happened on November 9th still in a bottoming pattern in my opinion I do believe that sugar prices will head higher over the course of time but at this point I’m advising traders to sit on the sidelines and wait for a break out to occur. Sugar futures are still trading below their 20 and 100 day moving average which in my opinion is always a bearish indicator, however the trading range has been relatively tight so if you get some fundamental news and a possible break out occurs you will be able to place your stop loss without risking too much money due to the fact that it does have excellent chart structure and has been watching what is happening in the corn and crude oil markets which basically have been slumping in recent sessions since they are all used as bio diesels. Sugar futures are a terrific commodity to trade because they do heavy volume and are very liquid and I recommend if you’re interested in trading commodities that you take a look at sugar because of its volume and its high open interest. TREND: NEUTRAL---CHART STRUCTURE: EXCELLENT
Currency Futures --- The currency futures had a wild trading week and I expect volatility to continue with the Euro currency down for the 2nd consecutive day only finishing lower by about 30 points at 1.2934 in the December contract still trading above its 20 and 100 day moving average finishing down around 50 points for the week and earlier in the session had major support at 1.2875 before rallying to finish near the highs of the session and actually hit the 50% retracement from the recent run-up in prices which could be construed as a bullish sign going forward. The Dollar Index for the March contract is trading below its 20 and 100 day moving average with the a big reversal in today’s session finishing up only 15 points for the week still stuck in a sideways range with the next major support at 78.50 – 79.50 and in my opinion I believe we’re a sideways channel in the dollar at least here in the short term. The Japanese Yen has been a major story recent weeks really falling out of bed due to the fact that the Japanese government is lowering rates once again to about 0% but a possible triple bottom may have occurred this afternoon when prices plunged right near contract lows at 1.2084 which actually hit a triple bottom before rallying to finish unchanged at 1.2152 and in my opinion if you’re looking to get long this market I would suggest buying putting a stop below the contract low risking around $700 per contract. The Mexican Peso which I talk about once in a while was up again today hitting a one year high closing well above its 20 and 100 day moving average following the stock market higher and if you look at the Peso throughout history is a terrific commodity to trade because of the fact that it has excellent chart structure grinding higher on heavy volume and generally follows the U.S stock market when you look back in 2008 when the stock market fell out of bed look at the Peso chart it also fell out of bed as well but since then a steady rise in value over the course of time and I’m still advising traders to be long the Mexican Peso with the next major resistance right around 80. If the fiscal cliff is resolved which I think it will so in my opinion that will send the U.S dollar lower against the foreign currencies accept possibly the Yen and that is what traders are looking for at this point in time. TREND: NEUTRAL---CHART STRUCTURE: EXCELLENT
Orange Juice Futures--- Orange juice futures for the March contract had a very quiet week after having a nice run up in past weeks off of contract lows of 105 currently settling right around 125.50 still trading above its 20 and 100 day moving averages continuing its bullish momentum with major support at 122 which happened earlier in the trading week and I do believe that the lows in orange juice over the last year have been made and I think a bull market going into the frost and season could propel prices back up to the 170 possibly even as high as 200 especially if the damaging frost hits the state of Florida. If you look at orange juice prices last year they came from 200 all the way down to around 97 in just a matter of about a month and we have been consolidating for some time so prices are still relatively cheap historically speaking and I believe the bottom is in a lot of commodities especially if the fiscal cliff is resolved which will send money flowing into commodities and stocks and most likely out of the treasuries were a ton of money is sitting at this point. The chart structure on orange juice was really terrible a couple weeks ago but now we consolidated allowing you to place a stop at the 10 day low if your long this market without risking an exorbitant amount of money and if you want to risk a little more you could also put a stop below the 105 which was the contract low risking around $3000 per contract. TREND: HIGHER---CHART STRUCTURE: EXCELLENT
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.
Michael Seery, President
Seery Futures
Twitter–@seeryfutures
Phone # (800) 615-7649
