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.
Precious Metals– The precious metals today in New York rebounded from earlier losses to finish around unchanged across the board with gold in the December contract finishing down $1 dollar an ounce at 1,711 sharply off session lows which were hit last night when many earnings came out of the stock market including Amazon and Apple Computer which were deemed very negative pushing many commodities and stock prices lower, however they did rebound during the day session. Silver futures were down $.30 at one point but reversed finishing unchanged at 32.03 an ounce and still in my opinion in a bearish trend with the rest of the precious metals. Copper prices which have been extremely bearish and as I’ve stated in many previous blogs that I am extremely bearish this commodity and I think we will break the 100 day moving average of 351.00 currently settling at 355.20 up 10 points on a pretty lack luster day also rebounding from session lows. I have been bearish the stock market and commodity markets but today was a pretty amazing day and you have to give credit to stocks and too many of the commodities rallying after being sharply lower last night as bargain hunters came in thinking that the recent selloffs were overdone but at this point, however in my opinion I think this recent selloff is just the beginning and I do think many prices head back down to the June and July lows which occurred before the QE3 was announced. TREND: LOWER
Stock Futures—The S&P 500 reversed sharp losses from negative earnings from Amazon and Apple Computer however both of those stocks finished higher with is unbelievable in my opinion pushing the S&P higher at 1 point & at the time I wrote this article was unchanged at 1408 also pushing the NASDAQ higher by 11 points trading at 2660 while earlier in the session was down 40 points and had a 60 point reversal on massive short covering and bargain hunters. The Dow Jones industrial average fell 100 points on the open before climbing back to unchanged at 13,059 still near 8 week low and I do believe we are headed lower because of the fiscal cliff as well as earnings have not been as good as expected with a slowdown in Europe and China affecting many large conglomerate companies. In my opinion the worldwide economies are weakening and I think asset prices are too high and if you look at where these prices were in June and July they were much lower than where they are now and what has happened in the last three months to prop up prices and that was the fact that QE3, but my opinion I believe that it’s effects are not that great to be able to push prices up this high and I think prices will retest those summer lows in the next couple of months especially if Congress doesn’t get their act together and come up deal before January 1st. TREND: LOWER
Grain Futures— The grain market in Chicago this afternoon closed slightly lower in an uneventful trading session with the soybeans in the January contract finishing down 1 cent right around 15.65 in sympathy with many of the other commodities which were slightly lower this afternoon also pushing wheat prices down another 8 cents at 8.65 continuing its incredible choppy sideways channel with no trend in sight. Corn futures for the December contract continue to grind lower down 2 cents at 7.40 a bushel also continuing a choppy market basically only going higher off of bullish reports but then selling off to come right back down the bottom end of the trading range and in my opinion these markets right now don’t have much of the trend but I am bearish the grain market due to the fact that I think there is a slowdown and when there are slowdowns in China in Europe grain prices generally are affected in a major way. Soybean prices have come down over $2 dollars from their highs so some of the slowdown might already be in soybean prices, however there really is no trend soybeans and they have rallied about $.80 from the lows just made about 10 days ago so I’m advising traders to sit on the sideline and wait for a trend to develop while I’m still very negative on wheat prices and I think will head lower due to the fact that the fundamentals of wheat are bearish and the demand is waning so I expect prices to break 8.40 a bushel and had back into the high $7s in the next couple of weeks. Traders are focused on South American weather which right now is beneficial to the crops which could be a record harvest come next February and March because farmers planted corn and soybeans from fencepost to fencepost which could definitely put a lid on grain prices for the next couple of months if that crop ends up to be a record and only time will tell and the weather has to be cooperative. Traders are also focused on the November 9th crop report which will show supply carryover figures which have been bullish the corn market for the last three reports only to come back down before the next report so let’s see if that pattern continues. TREND: SIDEWAYS
Natural Gas Futures— Natural gas prices are lower once again today by 6 points trading at 3.8480 in the January contract marking a fresh two-week low and as I have stated in many previous blogs I think natural gas is a sell at these lofty levels with incredibly warm weather here in the Midwest especially after the run-up we have had from the 52-week low which happened on April 23, 2012 at 2.909 which is up now 28% from those levels due to the fact that supply has been cut mirroring the five-year average which at one point supply was double the five-year average which is why prices were so much lower. In my opinion I believe that many of the commodities and stock market are topping out and I do think natural gas topped out so you could see lower prices here in the next couple of weeks despite the fact that we are entering the demand season which is winter but these are still relatively high prices for the amount of supply so I’m advising all traders to be short placing a stop above the contract high trying to minimize your risk to 1 or 2% of your account balance on any given trade which in my opinion is a very solid money management program. Natural gas futures have been a very trendy market the last couple years basically trending down for several years now bottoming and looking like long-term giant bear market is over with a grinding bullish market at this point, however I think prices have rallied too quickly and are in a desperate need for serious pullback in price. TREND: LOWER
Currency Futures— Currency futures are lower this afternoon with the Euro currency down for the 4th consecutive trading session lower by 15 points currently trading at 1.29.40 below its 20 day moving average near a fresh 2 month low against the U.S dollar on renewed pessimism that Europe is doing the correct thing with their austerity programs. The selloff in the Euro currency today along with poor earnings is sending the stock market lower in early trade causing a rally in the U.S dollar as a flight to safety this afternoon. The U.S dollar is up 3 points currently trading at 80.16 and in my opinion is still continuing its bullish momentum on the fact that the Federal Reserve QE3 program might end next year if Romney wins the election. In my opinion I believe that the currency market is basically pretty choppy with really no trend in sight so I’m recommending traders sit on the sidelines and wait for some trend to develop remembering that if there is a fiscal cliff on January 1st 2013 that could cause the U.S dollar to rally sharply just like it did during the 2008 monetary crisis but at this point in time that is still over two months away. The Canadian dollar is sharply lower against the U.S dollar down 37 points at 1.0011 near session lows breaking its 20 day average and now trending lower breaking support and at a two-month low and as a trader I always try to follow the trend because the currency markets are extremely trendy so if the Canadian dollar does break 1.010 my recommendation is to go short the Canadian dollar remembering always put a stop loss in case you are wrong limiting risk. The British Pound is down 25 points at 1.6095 this afternoon looking to retest the contract highs of three weeks ago at 1.63 still remaining in a very bullish of trend and the one positive thing that the British Pound does have is the fact that it is not related to the Euro currency which was a very smart move on their part. The currency markets at this point are not very volatile however in my opinion that will change after the election because then I think volatility will increase substantially. TREND: LOWER
Coffee Futures– Coffee futures for the December contract continue their bearish momentum today down another 340 points 157.60 still within an eyelash contract lows which is around 156.50 still stuck in grinding bear market still trading under its 20 and 100 day moving averages which is a bearish indicator while the fact that there is very little demand for this product at this time due to the worldwide recession’s especially in Europe and China causing prices to easily slide lower. I do believe coffee prices in my opinion are headed lower possibly to the 140s and at that level I would start advising traders to start looking buying coffee if you have long-term horizon because I think at those prices coffee is relatively cheap but that’s still a good distance away from the levels we are at so at this point I still think the market will head lower a break contract lows in the next couple weeks. Coffee prices have been in a bottoming pattern the last three weeks with extremely low volatility, however still far below its 20 and 100 day moving averages and is only about 3% from its contract lows which happened on June 18, 2012 it is over 36% from its contract highs which happened on November 15, 2011 showing how far prices have come down, however on the daily chart it is building major support in the 155 – 160 area. TREND: LOWER
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
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.
Livestock Futures—– Cattle futures in Chicago today are lower across the board for the 2nd consecutive trading session with live cattle in the December contract down by another 45 points currently trading at 125.25 a pound sharply below its 20 day moving average of 126.45 and far below its 100 day moving average which was 127.15 still stuck in a choppy and sideways market with major support at the 123 – 124 area with really no trend in sight so I am advising traders to sit on the sidelines until a trend develops, however I am bearish the meat sector because of the fact that these are historically high prices and I do believe a slowdown is coming so if you’re looking to play the market I would play it to the downside. Feeder cattle prices for the January contract are down another 80 points at 147.30 also passing its 20 day moving average which was 148.80 and far below its 100 day average looking to break out to the downside but still stuck in a two month tight channel so keep a close eye on this commodity if it breaks out in either direction it could be a substantial move further from those levels. Lean hog futures for the December contract are higher by 70 points currently trading at 78.85 a pound and have been by far the strongest livestock futures contract right near contract highs and it rallied over $.10 in two months and basically has been straight up except last week which was profit taking pushing prices to a one week low with major resistance between 80 – 82. As I’ve stated in many previous blogs I do believe the slowdown is coming and many of these markets have ignored that fact but eventually I think with less demand prices are headed lower in my opinion. TREND: LOWER
Sugar Futures— Sugar futures in New York today fresh contract lows finishing down another 16 points at 19.34 a pound prices we’ve not seen since August 2010 continuing their bearish trend over the last two years when prices in early 2011 traded as high as $.36 a pound and continues on the weekly chart to hit higher lows and higher lows continuing its bearish trend with the next major support around 15 – $.17 a pound which in my opinion is going to head there pretty soon due to the fact of a major slowdown in demand for all commodities in my opinion. As I’ve stated in previous blogs I thought sugar prices might hold the $.20 level however they didn’t and that is why you use stop losses in case you are wrong but at this point I never like to be buying a market which continually hits contract lows because the trend is your friend in commodities and the trend in sugar right now is lower with all of the other soft commodities like coffee, orange juice, cocoa, and cotton all right near contract lows and I believe that sector is headed lower in my opinion. The markets today were lower across the board with the stock market leading the direction lower with traders going short most of these markets with the U.S election ahead and if Romney wins traders are afraid that he will get rid of Ben Bernanke which means the easy monetary policies are over with causing asset and commodity prices to head lower where they actually should be if the Federal Reserve didn’t continue to pump $50 billion a month into the economy. TREND: LOWER
Cocoa Futures— Cocoa futures in New York today finished down for the 4th consecutive trading session at 2391 down another 11 points around 2386 coming off early session highs while many of the commodities sold off today because of a weak stock market prompting fears that prices may have peaked across the board and a strong U.S dollar is to blame. Cocoa futures are in a current downtrend right at a 3 month low breaking the 20 day moving average a couple of days back and now are looking right at the 100 day moving average of 2358 level and if it breaks that you’re looking at a possible bear market to the downside in the next couple of months. Cocoa futures in my opinion have not been extremely volatile in the last 6 to 8 months which is pretty unusual and I believe you will start to see some unrest in the Ivory Coast which definitely puts volatility back in cocoa while the chart has very good chart structure. I am recommending short positions in the cocoa market with stops above the most recent high of 2518 which happened on October 23, 2012 risking approximately $1,400 per contract. In my opinion I believe that commodity prices are too high for the type of economies around the world are mired in serious recessions and not looking at any growth for months or possible years. TREND: LOWER
Orange Juice Futures— Orange juice futures in New York today settled lower by 100 points at 111.25 for the trading session hovering right near the 52-week low which happened on August 15th of this year at 105.05 and is only about 6.50% from hitting that level on extremely light volume this afternoon. Orange juice prices are far from their highs which were hit on January 10th earlier this year at 196.10 all due to the fact that hurricane season was non-existent therefore creating an abundant harvest putting supply pressure on the market, however in my opinion with major support at 105 I believe orange juice prices are becoming relatively cheap going into the freeze or winter season which usually means traders put a price premium just in case of a damaged crop. Orange juice futures are not real liquid meaning they don’t do a lot of volume but that doesn’t mean you can’t trade the market you just have to be careful and make sure you use a stop loss trying to limit your risk because there is always risk when you place any trade in any commodity. I would sit on the side-lines and wait and see if orange juice prices come near that 105 level and then from there take a serious look at the upside because I do believe there is potential to start a fall rally. The 100 day moving average in the January orange juice is at 116.15 so we are 400 points lower which generally is a negative sign that is stating the trend should continue so I do expect prices to retest at 105 in the next couple of days. TREND: LOWER
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
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.
Cotton Futures — Cotton futures in New York today slightly lower by about 34 points currently trading at 72.38 right at the lower end of its recent trading range while selling to stabilize the last several days after sharp rally during the fact that ICE inventories hit a 17 year low having prices go limit up 2 consecutive days before reversing and heading right back down the major support with the USDA this morning reporting weekly sales for October sharply reduced at 34, 452 running bales for the 2012 -2013 marketing year also raising projected world production by 2.5% to 5.9 million metric tons and increasing stock estimates which is always bearish prices. Commodities at this point are mired in a bearish trend with all of the soft continuing to make contract lows and I do believe you will see lower prices across the board in the next month or so during the fact that I believe the easy monetary policy is coming to an end. As I’ve stated in many previous blogs I am bearish the cotton market with ample world supplies we basically have been trading three-month sideways channel breaking up to the upside last week on reports of much lower inventories which I never believed and obviously the market is not believing with prices right back down with major support right around $.70 level and if that is broken you are then looking at a six-month low possibility going back down to the contract lows which happened in early June around 64.25 . The main reason why cotton is at these low levels is the fact that there’s very little overseas demand especially in China which is keeping a lid on prices remembering 2008 we had major economic slowdowns and cotton prices went under 50 then bottomed starting a tremendous bull market when prices hit 220 in late 2010 which shows you how volatile prices can be and how quickly they can turn from a bull market to a bear market and a bear market to a bull market that is why you always use stop losses to always try to minimize your risk to 1 or 2% of your account balance on any given trade always using a solid money management program to try and prevent heavy or exaggerated monetary losses. TREND: LOWER
Milk Futures— Milk futures here in Chicago finished down 8 points to close at 20.35 right above its 20 day moving average and still only 2% from contract highs while last week stayed unchanged after hitting new highs once again in the December contract right at contract highs and a remarkable run in the last 4 months which is up about 35% from contract lows on production being cut due to the Midwestern drought. Milk prices bottomed on the weekly chart right around the 15 level last May and in my opinion I think prices are too high and will start to decline in the next couple of months. There is major support in the December contract right around 19.80 and then after that right around 19.20 and major resistance right at contract highs of 20.90 with next month’s crop production report on Nov 9th which should propel milk prices out of this tight trading range in the last two weeks. TREND:HIGHER
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
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.
Michael Seery, President
Seery Futures
Twitter–@seeryfutures
Phone # (800) 615-7649
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