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
The monthly unemployment report came out at this morning stating that we added 203, 000 new jobs which was construed very bullish sending the stock market higher and gold lower due to the fact of tapering possibly happening as soon as March as the unemployment rate is now 7.0% as traders see no reasonable to own gold as the economy here in the United States and around the world are improving dramatically sending the S&P right near record highs once again today and selling off gold by $4 at 1,228 currently here on the night session this Friday afternoon in New York. Gold is trading below its 20 & 100 day moving average continuing its bearish trend hitting a 5 month low with major support at 1,210 which was hit twice this week and rebounded but it looks to me that we almost certainly have to retest 1,180 which was last summer’s low.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Silver Futures
Silver prices were lower by $.16 at 19.41 still right near a 5 month low finishing down around $.60 for the trading week as investors are staying out of the precious metals and continue to pour money into the S&P 500 which was sharply higher but eventually in my opinion especially with a weakening dollar versus the Euro currency buyers will come into the silver market possibly down near the summer lows of $18. I think prices are getting relatively cheap as demand still remains very strong while the U.S dollar continues to move lower hitting a 5 week low today and eventually investors are going wake up and see that silver prices are cheap especially if you’re a long-term investor but could prices head lower here in the short term of course they could but I would be a buyer at lower levels and I do think lower levels are possible in the short-term. Silver is still trading below its 20 and 100 moving average which tells you that the trend is lower in the short term.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Live Cattle
Live cattle futures were down over 300 points this week with a possible all-time top being created in the last month or so as now I have turned bearish & I’m recommending selling the futures contract at 133 which was the breakout on Tuesday afternoon placing your stop above the 10 day high which is 135 risking about $800 in case you are wrong because all-time highs in cattle prices may have occurred as the commodity markets have turned pessimistic. Cattle futures are trading below their 20 and 100 day moving average going out this Friday down 60 points at 131.75 and if you agree with my analysis of this market & are looking to get short my recommendation would be to sell a futures contract at today’s level risking around $1,300 per contract as all bull markets come to an end and I’m guessing prices have peaked out. I have been bullish cattle prices for quite some time but I’m a technical trader and when prices start to turn around you have to be nimble and be able to go in that direction so I’m advising traders to be short the cattle market.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Live Cattle
Live cattle futures are down about 130 this week with a possible all-time top being created in the last month or so as now I have turned bearish & I’m recommending selling the futures contract at 133 which was the breakout 2 weeks ago placing your stop above the 10 day high which is 135 risking about $800 in case you are wrong because all-time highs in cattle prices may have occurred as the commodity markets have turned pessimistic. Cattle futures are trading below their 20 but above their 100 day moving average and if you agree with my analysis of this market & are looking to get short my recommendation would be to sell a futures contract at today’s level risking around $800 per contract as all bull markets come to an end and I’m guessing prices have peaked out. I have been bullish cattle prices for quite some time but I’m a technical trader and when prices start to turn around you have to be nimble and be able to go in that direction so I’m advising traders to be short the cattle market.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Feeder Cattle
Feeder cattle prices for the January contract are trading at their 20 day but above their 100 day moving average as prices have been grinding lower hitting a 7 week low last week finishing down about 120 points this week as the feeder cattle market may have finally topped out after a heck of a bullish run where prices went all the way up near 170. I’m recommending a short position in feeder cattle for the January contract at this time selling it at today’s price of 164.20 a pound and place your stop above 166 risking around $1,000 per contract as I do think the trend has changed to the downside.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Stock Futures
The S&P 500 rose sharply this Friday afternoon after finishing lower for 5 consecutive trading days which is very rare in the month of December as this Friday afternoon prices finished up 19 points at 1803 and remember the fact we have not have a down day on a Friday since early October as Friday generally is a positive up day going into the weekend. I’ve been recommending a long position in the S&P 500 for quite some time I do believe we will continue to move higher possibly up to the 1850 level here by New Year’s as there’s no other game in town with excellent earnings and the possibility of tapering coming after the monthly unemployment number which showed 203, 000 new jobs with an unemployment rate of 7.0% which was considered very bullish despite the fact that there could be tapering of US bonds soon , but that story is becoming old sending prices sharply higher right near all-time highs once again. The NASDAQ 100 is up 25 points at 3503 despite the fact that Apple Computer was down nearly $8 as investors are still in love with the technology sector especially after a minor setback that it had the last week and I still suggest you be bullish either with options or outright futures positions. The NASDAQ 100 cash index I believe will break 4500 which is the next stop which will take a couple of months in my opinion but prices remain strong. Both of these markets are still trading above their 20 and 100 day moving average despite the five-day losing streak & that just shows you how far prices have comes to the upside and I do think there’s more good news around the world which should prop up stock prices especially with low interest rates in Europe and the Japanese continuing their QE programs which will prop up the Nikkei so across the world bullish news will continue to push equity prices higher.
TREND:HIGHER
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures for the January contract are still trading above their 20 and 100 day moving average settling down about $.20 for the trading week finishing around 13.25 a bushel still near the upper end of its trading range at 8 week highs as China has come in big time scooping up large supplies of soybeans at cheaper prices as demand is still very strong while soymeal continues its bullish trend right near all-time highs which is pushing soybean prices up as well. Growing conditions down in South America at this time are very good and they should produce another record crop as I still remain bearish but at this time I do not have any positions on so I’m recommending sitting on the sidelines but I do think with another record Brazilian crop coming in the next couple of months that prices are too expensive. This market has been choppy in recent weeks as it’s very difficult to make money as a trader in a choppy market unless you are day trading the market so wait for a trend to develop as the real action in this market won’t start again until spring and summer when weather problems become a major concern.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Corn Futures
Corn Futures-- Corn futures for the March contract traded higher by $.06 this week at 4.36 a bushel rallying over $.20 from Monday’s low as a possible double bottom has been created on the daily chart at 4.18 hitting a 2 week high today. Corn futures are trading above the 20 day moving average for the 1st time in quite some time but still far below its 100 day moving average which stands at 4.61 and as I stated in previous blogs I’m neutral the grain market as I have to look to make money in other markets at this time because of the continued choppiness and lack of volatility but if corn did rally significantly say by $.20. I would start to be short once again because I do believe worldwide supplies are overwhelming in this market as prices could head sharply lower in the next couple of years due to global supplies and over planting.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT
Wheat Futures
Wheat futures were down for the 3rd consecutive trading day retesting contract lows in the March contract currently trading at 6.50 with the contract low standing at 6.47 & if that level is broken I would be recommending to sell a futures contract placing a stop above the 10 day high which is 6.73 risking around $1,300 as the world has huge supplies of wheat while growing conditions here in the Great Plains are excellent which should produce another record crop. I’ve been sitting on the sidelines in the grain market for quite some time as I’ve moved onto other markets that are trending but I do think if wheat makes contract lows you take the chance at the downside because the chart structure is excellent with the risk reward scenario in your favor. Wheat is trading below their 20 and 100 day moving average and if you look on the daily chart it has outstanding support at 6.50 so it will be interesting to see if that level holds once again or we finally bust through and if that happens look at some March put options as volatility is relatively low meaning the premiums are cheap at this time limiting your risk to what the premium costs.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT
Cotton Futures
Cotton futures were up 150 points this Friday afternoon at 80.50 hitting a 3 week high while I was recommending a short position in cotton for quite some time but when prices hit a 10 day high it’s time to move on and exit so now I’m sitting on the sidelines waiting for another trend to develop. If you think that there is a possibility that cotton prices have bottomed my recommendation would be to buy at today’s price and place the stop below the 10 day low of 77.25 risking around $1,500 in case the trend does start reversing as many of the commodities have started to rally off of recent lows despite the fact of possible tapering by the Federal Reserve starting here in the next couple of months. Cotton futures are trading above their 20 but below their 100 day moving average as the trend are starting to look more bullish after a solid decline in recent months as traders await next week’s USDA crop report and supply demand figures which will definitely have an impact on short-term prices.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee in the March contract closed down over 450 points this week at 106.40 reversing earlier gains hitting a 4 week high at 1 point trading up at 112.90 on Wednesday before a major reversal sent it right back down into its recent trading range as many the commodity markets were sharply higher this week but the coffee fundamentals still at this time remain bearish. If your bullish coffee prices as we’ve have had a nice sideways channel for over 4 weeks and that’s what to look for in a bottoming pattern so my recommendation would be to buy a futures contract at today’s price placing a stop below the contract low at 104 risking around $1,100 per contract but I remain neutral on coffee because there really is no trend right now. It would not surprise me if you get a snap back to the upside like we’ve gotten in oil, gold, and silver prices today as massive short covering is taking place and that could happen in coffee as well because of the short interest currently.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT
Sugar Futures
Sugar futures continued their bearish trend finishing down 12 out of the last 13 trading sessions finishing lower by 55 points this week at 16.59 hitting a new contract low and I have been recommending a short position from 18.32 as this trend is getting stronger to the downside. Worldwide supplies are massive continuing to pressure prices , however it would not surprise me get some type of kick back after 11 straight down days but I do believe we will test major support at 16.00 possibly going down to the 2010 lows around 15.50 as demand and supplies are both negative at this time despite the fact of a really good rally in crude oil which generally can help support sugar prices but nothing at this time is helping so remain short placing your stop above the 10 day high in case the trend does change therefore booking some profits if you took my original recommendation.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Orange Juice Futures
Orange juice prices for the March contract are down about 200 points this week at 139.00 trading right at its 20 day but above its 100 day moving average and has been the strongest of the soft commodities, but in my opinion I believe orange juice prices are little too high. A frost premium has been put into prices lately but if you have the same opinion I do & think prices could head lower my recommendation would be to sell a futures contract at today’s price with a stop above the 10 day high which was hit last Friday at 141 risking around $300 as prices finished mid-range after hitting 2 week lows on Wednesday.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT
Bond Futures
The 5 year note sold off sharply this Friday afternoon hitting a 6 week low before rallying to finish down 3 ticks at 120-08 as the monthly unemployment was construed bullish the stock market and bearish bonds because of the possibility of tapering. I'm recommending a short position in the five-year note as the government cannot continue to print forever and one day if you're a long-term investor this will pay off as interest rates will start to rise eventually as the five-year note is only yielding 1.50% at the present time. This is an excellent market with low volatility compared to many of the other commodity markets and it has excellent chart structure and I'm recommending outright futures contract to the downside & If you are long term investor I would continue to sell the five-year note futures and I would not place a stop because I would hold on continuing to rollover for years to come because the five-year note eventually could go back up to 4% or 5% which would be a huge gain if you are short the futures for the entire time and that could take several years but will pay you off in the long run in my opinion. The five-year note is now trading below its 20 and 100 day moving average and it looks like a possible head and shoulders top has been formed so take a shot at the downside.
The 10 year note is currently trading at 124-09 in the March contract finishing lower for the 3rd straight trading session and it also looks like its topped out so I'm recommending a short position placing your stop above 125.20 risking around $1,500 per contract as I do think prices will retest at 120 level down the road as the yield on the 10 year stands at 2.89% as people are rotating out of bonds and continue to pour money into the S&P 500 which I think will continue for the rest of the year so sell rallies in the bond market.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
What do I mean when I talk about chart structure and why do I think it is so important when deciding to enter or exit a trade? I define chart structure as a slow and 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 and allowing you to place a stop loss with will be 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 but markets that continue to trend like the current soybean complex allowing for you to place close stops as it continues to fall dramatically. I always 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 loses.
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
mseery@seeryfutures.com
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