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 1,341 an ounce while currently trading at 1,329 down about $12 for the trading week as this chart pattern is very similar to the silver chart as prices continue to go sideways waiting for some fresh fundamental news to dictate short-term price action. Gold prices are trading at their 20-day but still above their 100-day moving average as this market basically have been flip-flopping around due to the Federal Reserve doing an interest rate hike or not as I think that will continue for quite some time so avoid this market at the present time. The next major level of support is around 1,305 & if that is broken, you would have to think that the bearish trend would be underway. However, if prices break 1,360 the bull market would be back in my opinion, but prices look to go sideways over the next several weeks until we get some clarity on where interest rates actually are headed and what the Federal Reserve actually will do. Volatility presently in gold is relatively low, but this should definitely increase as we head towards the end of the year as negative interest rates around the world are still causing heavy demand for the precious metals as there is nowhere else to park money and I don’t see that trend ending anytime soon.
TREND: MIXED
CHART STRUCTURE: POOR
Silver Futures
Silver futures in the December contract settled last Friday in New York at 19.81 an ounce while currently trading at 19.72 down slightly for the trading week but ending on a very positive note up about 50 cents this afternoon as prices remain very choppy. Silver futures are trading above their 20 and 100-day moving average telling you that the short-term trend is higher, but prices continue to be extremely choppy trading between 19/20 as I’m waiting for a breakout to occur. At the present time, I have no trade recommendations in the precious metals, and I only have one trade recommendation which is in coffee market as the commodity markets are extremely choppy over the last couple of months. The true breakout in silver is around 20.23 as that is the level I will keep a close eye on as the U.S dollar continues to be on a roller coaster ride going absolutely nowhere. I do think there’s a possibility the commodity markets are waiting for the U.S election to be finished and then possibly the trends will begin in the month of November so be patient.
TREND: MIXED - HIGHER
CHART STRUCTURE: POOR
Crude Oil Futures
Crude oil futures in the November contract settled last Friday in New York at 44.48 a barrel while currently trading at 48.05 up about $3.50 for the trading week hitting a 3 week high all due to the fact that OPEC stated that they are cutting production sending prices higher for the 3rd consecutive trading session. Oil prices are now trading above their 20 and 100-day moving average telling you that the short-term trend is higher. However, this market remains extremely choppy and continues to trade between 40/50 a barrel as I’m currently sitting on the sidelines waiting for better chart structure to develop and a true trend. Historically speaking, OPEC cuts still might not push prices higher because that doesn’t necessarily mean that the other members will comply especially if they see Iran pumping up oil production because of higher prices. I’m a technical trader, and the technicals do not meet my criteria to enter into a bearish or bullish trade so avoid this market at present. The next major level of resistance is around $50 a barrel and if that is broken you have to think that we might be entering into a bullish trend but until that is broken sit on the sidelines.
TREND: HIGHER - MIXED
CHART STRUCTURE: POOR
Oat Futures
Oat futures in the December contract settled last Friday in Chicago at 1.77 a bushel while currently trading at 1.76 basically unchanged for the trading week as I’m keeping a close eye on a possible breakout to the upside if prices close above 1.80 as then I will be recommending a bullish position while placing my stop loss under the 10 day low at 1.72 risking 8 cents or $400 per contract plus slippage and commission. If you take a look at the daily chart, it has been in a tight consolidation as prices have gone nowhere over the last 4 weeks as the risk/reward is highly in your favor in my opinion as we could possibly be entering into a bullish position sometime next week. The grain market, in general, has been extremely choppy over the last several months with no trend as the trend in the short term in the oats is mixed to lower as prices are trading right at their 20-day but still below their 100-day moving average. Volatility will certainly increase in this market as the oats can become extremely volatile with large price swings, but at present volatility has come to a crawl.
TREND: MIXED
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
What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? I define chart structure as a slow 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 allowing you to place a stop loss 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 as I 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 loss.
Soybean Futures
Soybean futures in the November contract settled last Friday in Chicago at 9.55 a bushel while currently trading at 9.47 down about 8 cents for the trading week hovering right near major support around the 9.40 level & if that is broken the bearish trend should continue as 9.20 would be the next level that prices should test. Soybean futures are trading below their 20 and 100-day moving average telling you that the short-term trend is lower as this chart is the same as corn as prices have gone nowhere over the last 2 months. We will see what the next USDA crop report states with an estimate of 4.2 billion bushels which is another record crop as excellent summer weather benefited soybean production. The chart structure at present is relatively poor as soybeans have been fairly volatile despite the fact that prices have gone nowhere with many false breakouts up and down. Avoid this market at present as the trends will come back in the commodities it’s just a matter of time, so you’re going to have to be patient and not trade just to trade.
TREND: LOWER
CHART STRUCTURE: POOR
Corn Futures
Corn futures in the December contract settled last Friday in Chicago at 3.36 a bushel while currently trading at 3.26 down about 10 cents for the trading week hitting a 3 week low still stuck in a sideways trading pattern as harvest is in full swing in the Midwestern part of the United States. This year crop is estimated to be 15.1 billion bushels which is another record crop, and this should keep a lid on prices here for the next 6 weeks as that is an awful lot corn to bring onto the market. I just don’t see any opportunity in the grain market at present especially corn as its limited to the upside and limited to the downside in my opinion. Corn prices are trading below their 20 and 100-day moving average telling you that the short-term trend is lower, but I’m currently sitting on the sidelines in this market as well waiting for a true breakout to occur. Traders are awaiting the next USDA crop report which comes out in about 2 weeks to confirm production numbers and carryover levels. Generally speaking the lows in the grain market are usually in the month of November once harvest already occurred and we start focusing on next year’s crop. I do think 2017 will be a different situation in corn as lower acres should be planted therefore a record crop should not be produced next year.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Cotton Futures
Cotton futures in the December contract settled last Friday in New York at 70.07 while currently trading at 67.68 down about 240 points for the trading week testing major support on the daily chart. Cotton is now trading below its 20-day and right at its 100-day moving average as it looks like a false breakout to the upside above 70 occurred last week. I was looking at a possible bullish position, but I will not take this trade as I will wait for better chart structure to develop and a better trend as well. The soft commodities, in general, are in a bullish trend, but the commodity markets continue to move sideways as the U.S dollar keeps flip-flopping on a daily basis which is sending very little support to any of these markets at present. The United States is in the midst of harvesting the 2016 crop in the southern part of the United States as we will start to see production numbers in about 2 weeks when the next USDA crop report is released. Volatility has come to a crawl, but I don’t expect that to last much longer as I do think a bottoming process is forming.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Sugar Futures
Sugar futures in the March contract is trading above its 20 and 100-day moving average telling you that the short-term trend is higher as prices hit a fresh 4 year high in this week’s trade. Sugar prices settled last Friday in New York at 22.70 a pound while currently trading at 23.51 up about 80 points for the trading week continuing its bullish momentum to the upside. I’m currently sitting on the sidelines in this market as the original breakout which was a couple weeks ago did not meet my criteria to enter into the trade as the risk/reward was not in your favor at that time. However, I’m certainly not recommending any type of short position in this market as I do think higher prices are ahead. If you are currently long a futures contract, I would place my stop above the 10-day low around 22.22 risking about 130 points or $1,500 per contract plus slippage and commission from today’s price levels. However, I will be looking at new trends that are beginning to start. However, there are very few as the last several months have been a relentless sideways market except for a select few.
TREND: HIGHER
CHART STRUCTURE: POOR
Coffee Futures
Coffee futures in the December contract settled last Friday in New York at 151.40 a pound while currently trading at 151.60 basically unchanged for the trading week as I’ve been recommending a bullish position around the 156 level and if you took that trade continue to place your stop loss under the 10 day low at 149 on a closing basis only as prices did trade below that level earlier in the trading session. Coffee prices are trading at their 20-day but still above their 100-day moving average telling you that the short-term trend is higher as prices have been consolidating over the last week looking for some fresh fundamental news to dictate short-term price action. As I’ve talked about in previous blogs this trade should only have been taken with a large trading account as the original risk was around $3,600 per contract plus slippage and commission as this was a high-risk trade as coffee is the largest commodity contract around with huge price swings and massive risk. At present this is my only trade recommendation as there are very few trends in the commodity world at this time, but that will change as I think it still might take some time possibly even getting through the November U.S election for the trends to come back with a vengeance.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Trading Theory
What’s the difference between old crop & new crop in the agricultural commodities?
When analysts and traders talk about agricultural commodities such as soybeans & corn, the one thing they generally mention is old crop versus new crop, and that might confuse some beginners on what exactly is the difference. I will keep it simple because the only difference between old crop and new crop is that old crop in soybeans is any month other than November as an example is March or May and all months that were grown last year while the new crop is the November soybeans and will be harvested this October of 2016 and will be grown this summer. That’s why sometimes there is a price difference between the old crop and the new crop because of the fact that this year’s harvest in soybeans could be as high as 4.1 billion bushels pushing prices lower in the November contract as old crop, and the new crop can also have different carryover levels or supply levels. Old crop corn is any month other than the December contract while the new crop is only the December contract which will be grown this summer and harvested in October and sometimes there’s a price difference between old crop and new crop as well because as we will be harvesting around 15 billion bushels in October which is the reason why the December corn can be lower than the May corn because that was old crop which was harvested last October also having a different supply situation. Many of the agricultural commodities are affected by old crop & new crop including the grains, meats, coffee, and cotton so if you need help understanding which month you should be trading feel free to give me a call at any time & I will be more than happy to make sure that you are trading the correct month.
If you are looking for a futures broker feel free to contact Michael Seery at 312-224-8140 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
Michael Seery, President
Seery Futures
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Phone #: 312-224-8140
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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.
