S&P 500 Futures
The S&P 500 futures in the December contract is currently trading lower by 17 points at 3651, rallying off session lows as prices hit a one-week low.
If you have been following my previous blogs, you understand that I believe higher prices will continue, and if you are long a futures contract, I would continue to place the stop loss under the 10-day low standing at 3592 as an exit strategy. However, tomorrow it will be raised to 3626 as the chart structure will turn outstanding; therefore, the monetary risk would be relatively low for such a historically volatile commodity.
The S&P 500 is still trading above its 20 and 100-day moving average. This trend remains higher despite the recent setback over the last couple of days blamed on profit-taking and overbought trading conditions as I still think higher prices are ahead. Money flows continue to enter the equity market as the IPO phenomenon continues as several tech companies have come about doubling or even tripling on their 1st day of trading. There is still a lot of pent-up demand, especially going into 2021 when the coronavirus vaccine will start to be distributed. I see no reason to be short stocks as trading with the path of least resistance is the most successful way to trade over time.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW
Silver Futures
Silver futures in the March contract settled last Friday in New York at 24.25 an ounce while currently trading at 24.10 down slightly for the trading week still stuck in a tight 11-week consolidation pattern looking for some fresh news to push prices higher.
I'm sitting on the sidelines as I'm a trend trader and try to avoid choppy markets, and that's exactly what we are experiencing. I will still be recommending a bullish position if prices close above the critical 25.71 level, which could happen in the coming weeks as I still think historically speaking, silver looks cheap.
Prices at the current time are now trading below their 20 and 100-day moving average as the trend is mixed to lower. The U.S. dollar hit a 2 year low this week as that is a fundamental bullish factor for higher prices. However, it just has not had any impact at this time. Currently, I do not have any precious metal recommendations as I'm sitting on the sidelines waiting for some new trends to develop as copper is the strongest member out of the entire complex and looks to move even higher, in my opinion.
If you have read my previous blogs, you understand my consolidation theory states the longer the consolidation, the stronger the breakout. That's exactly what's going to occur when that situation develops, so be patient and keep a real close eye on this market as I believe a tremendous trend is brewing.
TREND: LOWER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
Copper Futures
Copper futures in the March contract are currently trading at 3.5240 a pound after settling at the same price last Friday in New York. However, prices hit a fresh 5 year high this week up to the 3.62 level before profit-taking came about as this market remains very strong.
If you are long a futures contract, I would continue to place the stop loss under the 10-day low, which stands around the 3.4390 level as the chart structure is outstanding at the current time as prices have gone nowhere over the last 2 weeks.
Copper is trading far above its 20 and 100-day moving average as this trend is strong fundamentally. Technically speaking, this market has everything going for it as I see absolutely no reason to try to stop and go short as I still believe the 4.00 level is in the cards in the coming weeks ahead.
The U.S. stock market hit another all-time high this week as copper prices continually follow the entire equity market higher as strong demand continues to fuel prices. That situation will not end anytime soon, especially with all of the massive stimulus packages that will be coming to fruition in the coming weeks ahead, so stay long and continue to place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH
Orange Juice Futures
Orange juice futures in the January contract settled last Friday in New York at 123.95 while currently trading at 120.25 down nearly 400 points for the week, hitting a 4 week low as weather conditions in the State of Florida remain ideal, putting pressure on prices in the short-term.
I have been recommending a bullish position from around the 119 level getting stopped out earlier in the week at the 123 area, so it's time to become neutral and wait for another trend to develop. However, I do believe the downside is limited as I will not take a short position. I think the 105 level will hold. Juice prices and now trading slightly below their 20 and 100-day moving average as the trend has turned to the downside as I think we will probably chop around for the rest of 2020 as we await some fresh fundamental news to push prices higher.
At the current time, I do not have any trade recommendations, which is very rare as I'm waiting for some fresh trends to develop as being patient sometimes is the best thing to do as trading just to trade will kill you in the long run.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
Sugar Futures
Sugar futures in the March contract settled last Friday in New York at 14.44 a pound while currently trading at 14.56 up slightly for the trading week, bouncing off major support as prices are still right near a six-week low.
I'm sitting on the sidelines waiting for another bullish trend to develop. Fundamentally speaking, the outlook for more sugar supplies from India of Meir Commodities India Pvt on Nov 26th projected that India would export 1.5-2.0 MMT of sugar in 2020/21 without any government subsidy. Neighboring countries can be expected to purchase Indian sugar rather than Brazilian sugar because of cheaper freight costs.
Sugar prices are trading slightly below their 20-day but above their 100-day moving average as the trend is mixed as the chart structure is starting to improve daily; therefore, the risk/reward would be in your favor in the coming days, so be patient. I do believe the downside is limited.
TREND: LOWER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
Live Cattle Futures
Cattle futures in the February contract settled last Friday in Chicago at 112.40 while currently trading at 113.25, up slightly for the trading week still experiencing a choppy trend looking for some fresh fundamental news to dictate short-term price action.
If you take a look at the daily chart, the price gap that was created 3 weeks ago was filled earlier in the week coupled with the fact that the down trendline is about to be breached as it looks to me that higher prices are ahead.
I'm not involved as this market has been incredibly choppy and challenging to trade successfully. Still, I believe a long-term bottom is starting to come about as I believe 2021 will experience bullish trends in the livestock sector, so be patient and wait for a trend to develop. The volatility at the current time remains high. That situation will not change anytime soon as the winter months, seasonably speaking, can experience tremendous price swings. I think that situation will develop once again as I do not believe the 115 level will be the top, so look to be a buyer in the coming weeks ahead.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH
Trading Theory: Trade with the short term trend; as the saying goes in futures trading, the trend is your friend, but sometimes you will be a market that is trending higher and then has a false breakout to the upside and then suddenly sells off, causing you a 2% loss on your equity and you say to yourself that was a bad trade and should I do something different on my next trade.
If it were up to me, I would continue to buy strength and sell weakness because commodity trading is about percentages of success in the long run. If you go with the path of least resistance more often, you will have the probabilities of success on your side.
I define a trend as a commodity hitting a 20 day high or low as a trendy market. If the market is in a consolidation, stay away from it and find something trending up or down and go in that direction remembering the money management rules of 2% maximum loss if you are wrong.
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
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: 630-408-3325
[email protected]
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.
