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.
Silver Futures
Silver futures had a volatile trading week in New York still trading below their 20 and 100 day moving average settling last Friday at 16.83 while trading this afternoon at 17.30 spiking $.50 higher on Wednesday due to the fact that the Federal Reserve basically stated that they will continue to keep interest rates low for the foreseeable future sending the precious metals sharply higher, however they are unable to sustain those levels as silver prices are currently trading lower by 10 cents. If you took the original recommendation selling at 20.44 several months back continue to place your stop above the 10 day high which currently stands at 17.72 which is only about $.40 or $2,000 risk per contract at these price levels as the chart structure has improved dramatically allowing you to place tight stops minimizing monetary risk. Many of the commodity markets continue to move lower, however the U.S dollar reacted negatively to the Federal Reserve statements helping prop up silver prices but I do think the U.S dollar is in a long-term bull trend so I still look for lower silver prices ahead so continue to place the proper stop making sure you risk 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING
Gold Futures
Gold futures in the December contract are currently trading at 1,220 down about $5 in New York this Friday afternoon as I’ve been recommending a short position when prices hit a 4 week low of 1,278 a couple months back while placing your stop on a closing basis only at 1,232 which is only $12 away from today’s price levels as we did trade as high as 1,234 on Wednesday night session. The chart structure in gold has improved dramatically as many of the commodity markets continue to move lower due to the fact that the U.S dollar is at multi-year highs against many of the foreign currencies, however the Federal Reserve came out stating that they will keep interest rates low sending gold up about $30 in Wednesday’s trade however prices just don’t seem to be able to hold these price spikes as I’ve seen many of them in the last 6 months then prices come back down only to make new lows so continue to play this to the downside in my opinion. The chart structure in gold is outstanding so if you’re looking to enter this market for the 1st time the risk/reward is in your favor as volatility is very high due to the fact that the stock market has finally seen some turbulence down sharply in Thursday’s trade sending gold prices up as well, however I still do believe that the U.S dollar is headed higher as deflation is a real problem and that’s why interest rates are staying so low presently.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING
Corn Futures
Corn futures in the December contract had a wild trading day in Chicago finishing down nearly $.11 to close at 3.34 a bushel after the WASDE report showed crop estimates of 14.475 billion bushels slightly below estimates with ending stocks or carryover levels of 2.13 billion also slightly lower than projected, however traders still consider this market bearish after 7 straight up days as harvest pressure should continue to pressure this market possibly retesting contract lows at 3.18 a bushel here in the short term. I’ve been short corn for many months and we were stopped out on the 10 day high on Monday at 3.31 a bushel as the trend is neutral however this market still looks very bearish in my opinion but look for other markets to trade but I still think prices are headed lower. Many of the commodity markets continue to head lower including the S&P 500 which has been in an extremely bullish trend for several years as economies around the world are starting to slowdown and with a massive crop being harvested on a daily basis here in the Midwestern part of the United States I still think there’s a possible break of $3 a bushel in the next 4 to 6 weeks as the U.S dollar remains extremely strong also pressuring all commodity prices especially grain prices which are very sensitive to fluctuations in the U.S dollar.
TREND: NEUTRAL
CHART STRUCTURE: OUTSTANDING
Copper Futures
Copper futures are trading below their 20 and 100 day moving average settling last Friday at 299.85 breaking the critical $3 a pound level, however prices have been choppy this week trading at 2.99 and I’m still recommending a short position while placing my stop above the 2 week high which currently stands at 3.06 risking around 7 points or $1,750 per contract as the trend is lower as the precious metals still remain weak in my opinion. The chart structure in copper is outstanding at the current time because prices have chopped around this week so take advantage of any rally while making sure that you place the proper stop loss which is extremely important when you trade the commodity markets as in yesterday’s trade prices were up 600 points but never hit a 10 day high so we are still in this market by the skin of our teeth but the economy seems to be slowing down and worldwide economies seem to be slowing down so I think copper demand will start to decline pushing prices lower so continue to play this to the downside.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING
Soybeans Futures
Soybean futures in the November contract had a wild trading session finishing down almost $.20 at 9.21 a bushel as the WASDE report came out this afternoon showing a production level of 3.927 billion bushels which was slightly lower than what was anticipated, however traders reacted negative thinking that harvest pressure will continue to push prices lower here in the short term. Corn futures in the December contract finished down $.10 at 3.34 bushel as crop estimates were raised while carryover levels were higher as pessimism continues in the grain market and I still recommend sitting on the sidelines in both of these markets as we were stopped out earlier in the week as prices hit a 10 day high and as a trader you must have an exit strategy and my exit strategy is the 10 day high if I’m short and the 10 day high in corn was at 3.30 a bushel and the 10 day high in soybeans was at 9.31 a bushel and prices went even higher after that but now they look vulnerable and look to retest contract lows and if you’re interested in getting short I would sell at today’s prices while placing my stop above the 10 day high.
TREND: NEUTRAL
CHART STRUCTURE: OUTSATNDING
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
Lean Hog Futures
Lean hog futures in the February contract had a wild trading week with high volatility currently trading at 91.60 this afternoon in Chicago down about 40 points and I’m still recommending a short position in this market as I’m sticking my neck out here breaking a couple of my rules, however the risk/reward in hogs can be large and if you’re taking this recommendation make sure you place the stop above the 10 day high of 94.32 currently risking around 280 points for $1,120 per contract as the chart structure has improved tremendously. Cattle prices hit all-time highs in yesterday trade and then sold off to finish limit down and that might be a short-term top in that market which could help push prices lower as producers are increasing supplies due to higher margins because of low feed costs. Hog prices are trading right at their 20 and 100 day moving average telling you that the trend is basically neutral I still think prices are too high relative to the rest of the commodity markets which are at multi year lows.
TREND: NEUTRAL
CHART STRUCTURE: IMPROVING
Sugar Futures
Sugar futures hit a 5 week high in yesterday’s trade in the March contract climbing to 17.20 a pound continuing its short-term trend as I’m currently sitting on the sidelines in this market waiting for better chart structure to develop as prices are down this Friday afternoon at 16.57 but slightly higher for the trading week. If you are bullish sugar prices and you think the bottom has been created buy a futures contract at today’s price while placing a stop at 15.89 which is the 2 week low risking around $700 per contract as sugar and coffee prices have risen on concerns of dryness once again in Brazil sending coffee prices to new contract highs while pushing sugar prices up about 10% from their contract lows which was just created last month. If you are bearish sugar prices my recommendation would be to sell a futures contract at today’s price while placing a stop above yesterday’s high of 17.20 risking around $800 per contract as many the commodity markets still remain weak as deflation is a worldwide problem, however sugar is a commodity and if bad weather cuts crop production prices move higher but only time will tell to see if Brazil receives rain as supplies still remain large.
TREND: HIGHER SOLID
CHART STRUCTURE: POOR
Where Should You Place Your Stops?
Identifying where stops exist in the market is an important lesson to learn because placing a correct stop loss that will improve your trading tremendously over the course of time. Nobody knows for sure where stops are located, however I have learned a couple of things over my 20 year career and I have a general idea where stops are placed and why. Buy stops are generally placed above the 10 day high as well as above contract highs as the bulls generally are buying more and the short selling are getting stopped out. Sell stops are usually placed at the 10 day low as well as below contract lows which means the shorts are adding to their position and the longs are getting stopped out as they figure they are wrong.
The other common places to have stops are at certain moving averages such as the 20 or 100 day moving average where traders think either the trend is turning bullish or the market is starting to break down. Placing stops to close or not at important price levels can get very frustrating because the market can stop you out and then go the direction that you thought leaving you behind and out of the market. Placing stops is one of the most important aspects of trading in my opinion.
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
SEERY FUTURES ACCEPTS CANADIAN COMMODITY ACCOUNTS
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.
Michael Seery, President
Seery Futures
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Twitter–@seeryfutures
Phone #: (800) 615-7649
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