Silver Futures
Silver futures in the September contract experienced one of the craziest trading weeks of all time as the volatility is extraordinarily high as prices traded as high as 29.91 before selling off to 23.58 having over a $6 trading range for the week as this commodity is not for the light-hearted.
I have been recommending a bullish position over the last month or so from the 18.61 level, and if you took that trade, continue to place the stop loss under the 2 week low standing at 23.58 as an exit strategy. However, the chart structure will not improve for another 8 trading sessions, so you will have to accept the monetary risk at this time. If you are not involved in this market, I would avoid it like the plague as the risk/reward is not in your favor, as I still think higher prices are ahead. Still, there is a high probability that we could consolidate the recent run-up in price over the next couple of weeks.
At the same time, I also have a bullish platinum trade, which continues to move higher weekly as the U.S. dollar is at a 2 year low. That is a fundamental bullish factor coupled with the fact that the Coronavirus situation doesn't seem to end anytime soon, so stay long.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH
Platinum Futures
Platinum futures in the October contract settled last Friday at 970 an ounce while currently trading at 974 in a crazy volatile trading week as prices cracked the 1,000 level once again before profit-taking came about.
I have been recommending a bullish position over the last month or so from around the 868 level. If you took the trade, continue to place the stop loss on a closing basis only at 930 as an exit strategy. However, the chart structure will not improve for quite some time, so you will have to accept the monetary risk. Platinum prices are still trading above their 20 and 100-day moving average. Still, for the bullish momentum to continue, prices have to break 1,035, which could happen in next week's trade as the volatility remains very high.
At the current time, I also have a bullish silver recommendation as I think the entire sector will continue to move higher as the U.S dollar continues its bearish trend hitting a fresh 2 year low in this week's trade, so stay long as there is room to run.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH
S&P 500 Futures
The S&P 500 in the September contract is trading at 3370, continuing its bullish momentum this week as prices filled the downward gap created on February 24th in today's trade.
You are witnessing a melt-up in price as people are chasing the market at the current time, afraid that they will miss another leg higher. If you have been following any of my previous blogs, you understand that I have been bullish on the equity market for quite some time, and I do believe prices will break the all-time high that was hit on February 28th at 3396 in the next couple of weeks.
The S&P 500 is trading far above its 20 and 100-day moving average as this trend is strong to the upside. Fundamentally speaking, this market has everything going for it as the Federal Reserve will continue to pump money into the economy, therefore, supporting the precious metals and stock prices, and that's precisely what we are witnessing at this time. If you are long a futures contract, I would place the stop loss under the 2 week low standing at 3192 as an exit strategy and proper money management technique.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE
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Sugar Futures
Sugar futures in the October contract settled last Friday in New York at 12.67 while currently trading at 13.20 a pound up about 53 points for the trading week as prices are right near a 6 month high.
Sugar has now traded higher for the 4th consecutive session as the trend is getting stronger weekly. Fundamentally speaking, increased Chinese demand for Brazilian sugar is giving prices a boost according to data from researcher Datagro, Brazil, as of August 10th had scheduled the shipment of 816,823 MT of sugar to China in the coming weeks. That is 31% of Brazil's total sugar exports expected to ship in that period as this year through July. Brazil has already exported 1.43 MMT of sugar to China, surpassing the total volume of sugar exported to China in 2019.
I have been recommending a bullish position from around the 12.61 level. If you took that trade continue to place the stop loss under the 2 week low, which stands at 12.41 as an exit strategy. However, the chart structure will not improve for another 7 trading sessions, so you will have to accept the monetary risk. I think sugar prices could test the 15.00 level in the coming weeks ahead as this commodity is also riding the coattails of oil, which continues to move higher monthly as the commodities across-the-board look bullish, so stay long.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
Lean Hog Futures
Hog futures in the October contract is trading higher for the 2nd consecutive session up 85 points at 53.20 this Friday afternoon in Chicago after settling last week at 50.97 up over 200 points for the week as prices are hovering right near a 2 month high.
I have been recommending a bullish position from around the 50.75 level. If you took that trade continue to place the stop loss under the contract low, which was touched at 46.47, in next week's trade, I will raise the stop-loss. Therefore, the monetary risk will be reduced as I want to give this trade some room due to the high volatility. For the bullish momentum to continue, prices have to break the August 10th high of 54.15 as that could happen next week, especially with the high volatility. That situation is not going to change anytime soon.
At the current time, I also have a bullish cattle trade as prices have hit a 6 month high. The livestock sector looks to move higher as historically speaking prices still look cheap. Hog prices are trading above their 20 and 100-day moving average for the first time in months, and that tells me that the trend has changed, so play this to the upside.
TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: HIGH
Live Cattle Futures
Cattle futures in the October contract settled last Friday in Chicago at 106.45 while currently trading at 110.32 up nearly 400 points for the trading week as prices are knocking on the door of a 6 month high.
I have been recommending a bullish position from around the 106.50 level. However, the original recommendation was back in the August contract. If you took that trade continue to place the stop loss under the 10-day low, which stands at 106.22 as an exit strategy. However, it will take another 6 trading sessions before the stop is moved, so you will have to accept the monetary risk. I believe prices will retest the February 20th high of 114.57 as prices have now traded higher for the fifth consecutive session as the trend is starting to accelerate to the upside weekly.
If you take a look at the daily chart, the uptrend line remains intact as prices are trading far above their 20 and 100-day moving average, telling you that the trend is to the upside. I also have a bullish hog recommendation as the livestock sector looks strong, so stay this higher as I see no reason to be short most commodity sectors.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE
Trading Theory
How Can You Use Moving Averages To Your Advantage? A simple moving average is calculated by adding the closing price of a commodity such as crude oil for a number of time periods and dividing this total by the number of time periods.
Short-term averages respond quickly to changes in the price of the underlying commodity, while long-term averages are slower to react.
I generally follow the 20 and 100-day moving averages when commodity prices break below or above, which establishes a trend that should always be followed as the saying goes, the trend is your friend.
If the 20 and 100 days have crossed to the downside and you have a long position telling you that you are trading against the trend, it can be dangerous over time.
I generally like to buy a commodity or sell a commodity when the price has hit a 20 day high or low. The simple moving average should have crossed at that point, confirming or establishing that the trend is starting.
If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 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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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.
