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.
Gold Futures
Gold futures in the December contract settled last Friday in New York at 1,156 an ounce while currently trading at 1,178 up over $20 for the trading week continuing its bullish momentum hitting a 3 ½ month high as I’ve been sitting on the sidelines as the 10 day low stands at 1,130 which is too far away with too much risk at the current time as I will wait for a better chart structure to occur. Gold prices are trading above their 20 and 100 day moving average for the first time in months telling you that this rally could be for real but wait for a better chart structure to tighten up therefore lowering monetary risk which could take another 5 days as a weak U.S dollar has spurred prices to the upside in recent weeks. The next major level of resistance is between 1,200/1,230 as the commodity markets as a whole have bottomed here in the short-term especially the precious metals with platinum and silver both rallying to multi-month highs. Gold prices rallied $70 since early October which has been very impressive in my opinion, but as a trader I always measure risk/reward and chart structure but at this point in time this does not meet my criteria to enter a bullish position, however I’m certainly not recommending any type of bearish position as that would be countertrend trading which is very dangerous in my opinion over the long haul.
TREND: HIGHER
CHART STRUCTURE: POOR
Crude Oil Futures
Crude oil futures in the December contract settled last Friday in New York at 50.11 a barrel while currently trading at 47.20 down about $3 for the trading week as I have been recommending a long position from 48.70 and if you took that trade continue to place your stop loss at the 10 day low which now stands at 45.67 as the chart structure has improved dramatically over the last several trading sessions. Oil prices are trading above their 20 day but still below their 100 day moving average as a bearish inventory report pushed prices lower this week, however the U.S dollar hit a 6 week low supporting many commodity prices as currently there is a battle happening between the bulls and bears, but I remain bullish while maintaining the proper stop loss. If you have not taken the original trade I still recommend buying at today’s price levels as the risk at the present time is $1.50 or $750 per mini contract plus slippage and commission, however you have to be patient as the stop loss will not be tightened up for another 9 days so the risk parameters will remain the same. Volatility in oil is increasing so make sure you place the proper amount of contracts while risking 2% of your account balance on any given trade as I see volatility remaining high for the rest of 2015 despite depressed prices.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Silver Futures
Silver futures in the December contract settled last Friday in New York at 15.82 an ounce while currently trading at 16.06 up slightly for the trading week still continuing its bullish momentum. Silver prices are trading above their 20 and 100 day moving average telling you that the trend is to the upside as I’m currently sitting on the sidelines; however the chart structure is starting to improve as I’m looking at entering into a bullish position next week as a head & shoulders bottom was created last month around the 14.50 level. The U.S dollar is in a short term bearish trend helping push up the precious metals over the last several weeks as silver prices are holding above the $16 level as I think the commodity markets in general have bottomed. If you have been following any of my previous blogs over the last several years you understand that chart structure is one of the main criteria that I look at before entering into trade as this price went straight up with large monetary risk as that’s the reason I did not take the trade, however I’m certainly not recommending a short position as that would be counter trend trading so keep an eye on this market we could be looking at entering to the long side next week as the chart structure is improving daily.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
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
Coffee Futures
Coffee futures in the December contract settled last Friday around 131.60 a pound while currently trading at 126.20 down about 500 points for the trading week and lower by 750 points this Friday afternoon ending the week on a very dismal note in my opinion. Coffee prices are still trading above their 20 and 100 day moving average telling you that the short-term trend is to the upside as I’ve been recommending a long position from the 128 level and if you took that trade the chart structure has tightened up considerably so place your stop at the 10 day low which currently stands at 124.30 risking around 200 points or $750 per contract plus slippage and commission from today’s price levels. I have been recommending this trade only to very large trading accounts as the risk was extremely high at the time of the recommendation, however the risk/reward is now in your favor so if you are trading a smaller account you might want to take a chance at buying while placing the proper stop loss. Coffee has become extremely volatile in recent weeks and that does not surprise me as we are entering the volatile season as drought talks in Brazil and many other coffee growing countries around the world spurred prices up to the 138 level as massive profit-taking has taken prices back down to the breakout area but I’ll stick to my rules while placing the stop at the 10 day low which is just an eyelash away.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Sugar Futures
Sugar futures in the March contract are trading above their 20 and 100 day moving average telling you that the trend remains to the upside after settling at 14.34 a pound last Friday in New York while currently trading at 14.10 down around 25 points for the trading week in relatively nonvolatile action. Sugar prices are having a difficult time crossing the 14.50 level as that is major resistance coupled with the fact that a double top was created in the May around 15.00 as prices are up about 30% in the last three weeks so it does not surprise me that we are consolidating the recent move higher. I missed this trade to the upside as the chart structure was absolutely terrible, but if you’re in a bullish position I would place my stop at the 10 day low currently stands at 13.39 as I have very few commodity positions on at the current time. The main reason for the move higher recently is due to very strong demand with lower production estimates coming out of Brazil as the supply/demand tables have changed quickly as over production over the last several years is a thing of the past.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Trading Theory
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.
Orange Juice Futures
Orange juice futures in the November contract settled in New York last Friday at 116 while currently trading at 131 up 1500 points for the trading week and has now traded higher for 10 consecutive trading sessions all off of the USDA which stated last week’s production numbers of 80 million boxes will be produced in Florida which is much less than the previous year due to greening disease. Orange juice prices have skyrocketed recently trading far above their 20 and 100 day moving average telling you that the trend is to the upside with the next major level of resistance which was hit twice in the month of August at 134 as I still see higher prices especially entering the winter months which can produce a freeze in the state of Florida sending prices even higher than today’s price levels. At the current time I’m sitting on the sidelines as I hate chart structure like the one I’m seeing presently in orange juice as prices went straight down & now straight up as the risk is way too high so sit on the sidelines and look at other markets that are beginning to trend with less risk. The problem with orange juice is that demand over the last several years continues to decline as there are many other alternative products for consumers to choose from but the year 2016 could produce a decimated crop keeping prices high.
TREND: HIGHER
CHART STRUCTURE: POOR
Live Cattle Futures
Live cattle futures in the December contract settled last Friday in Chicago at 137.32 while currently trading at 138.60 slightly higher for the trading week while trading higher this Friday afternoon by 220 points as I’m currently sitting on the sidelines waiting for another trend to develop coupled with better chart structure. Cattle prices have seen huge price swings with high volatility over the last several months still trading above its 20 day but below its 100 day moving average telling you that the trend is mixed as I’m advising clients to avoid this market at the current time, however I do think prices are limited to the upside and if you are a producer I would start taking a serious look at hedging some of your monetary risk. Feeder cattle prices have rallied substantially as well due to lower corn prices which have hit a 4 week low, but I’m still bearish the entire meat complex including the hog market which was sharply lower today, so I’m lying the weeds waiting for better chart structure to develop in the next week in my opinion. Cattle prices traded down to the 128 level and have rallied over 1000 points over the last two weeks as I was recommending a short position over the last several months, but be patient and wait for another opportunity as I think that will also be to the downside once again.
TREND: MIXED
CHART STRUCTURE: IMPROVING
Corn Futures
Corn futures in the December contract are trading below their 20 and 100 day moving average telling you that the short-term trend is lower as prices settled at 3.83 last Friday in Chicago while currently trading at 3.73 a bushel down about $.10 for the trading week hitting a 4 week low. I’m currently sitting on the sidelines as I have very few commodity positions on at the current time as the 10 day high stands at $4.00 which is too much monetary risk in my opinion but the chart structure could change later next week so keep an eye on corn as prices remain weak. At the current time I’m not involved in the grain market as I’ve written about in many previous blogs I think prices are limited to the downside and to the upside as there is very little fresh fundamental news to dictate short-term price action as we enter the very nonvolatile winter months. Traders are keeping an eye on South American weather where corn currently is being planted but the USDA announced almost 13.6 billion bushels produced once again and that’s keeping a lid on prices as demand still remains relatively soft despite the fact that the U.S dollar continues its short-term downtrend but has not helped corn prices.
TREND: LOWER
CHART STRUCTURE: POOR
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
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: (800) 615-7649
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"Corn futures in the December contract are trading below their 20 and 100 day moving average telling you that the short-term trend is lower". . . OR-R-R-R. . . it could also be telling you that the short-term and intermediate-terms trends HAVE BEEN lower. . . or WERE lower. Understanding where a chart has been is critical to improving your odds on knowing where it's going. For those of us that were loading up on Corn on Friday there were MANY technical reasons why. Coming down to and below the 50% Level off the most recent bottom and top, many intraday charts all flattening out at over-sold levels for hours and hours, bars and bars of data. "Traders are keeping an eye on South American weather. . . " Oh-h-h. . . Well, some traders are also - were also - keeping an eye on the LOWER BOLLINGER BAND on the Daily Chart, which Corn came down to, and why many of us are now Long December below 375 and Long March below 385. Sidelines???