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 finished the week at 1,240 still continuing their choppy trade as investors sold off the precious metal later in the week despite the fact that the S&P 500 is having huge volatility which generally spooks investors into buying gold but the precious metal closed very poorly in my opinion. I have a hard time believing that gold is going to start to rally anytime soon as it might be stuck in the mud and could trade choppy for quite some time. The U.S dollar hit a 7 week high today which is bearish gold prices as the printing press here in the United States is starting to stop which is creating a higher U.S dollar versus the foreign currencies and that is bearish commodity prices in general. I’m recommending investors to sit on the sideline in the gold market at this time as there really is no trend as you have to look for a market that is trending up or down because if you screw around with markets that go up and down and have no trend with constant choppiness that will kill you in the long run.
TREND: SIDEWAYS
CHART STRUCTURE: POOR
Silver Futures
Silver Futures--- Silver futures continued their 9 week consolidation finishing at 19.12 an ounce in the March contract right near contract lows of 18.72 & if that level is broken you have to think prices would head lower in the short term. The emerging market crisis over the last couple of weeks I think is hurting silver prices here in the short term but this too will blow over, as if your long term investor I still think silver prices look attractive as eventually inflation will come back into this market it’s just a matter of when. Silver futures are trading below their 20 & 100 day moving average and the longer the consolidation in my opinion the stronger the move will be when prices truly break out while the breakout to the upside is at 20.67 & the breakout to the downside is 18.72 as prices were unable to rally despite the fact that there was panic selling in the S&P 500 as money poured out of the stock market into the bond market but not into the precious metals which tells me the market still currently looks weak.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures in the November contract which is considered the new crop continue to head lower this week hitting a new contract low going out in Chicago at 11.05 a bushel and traded as low 10.88 earlier in the trading session as the bear market continues & I’ve been recommending a short position in November soybeans for quite some time making sure you place your stop above the 10 day high which currently stands at 11.30 & that stop will be moved down almost on a daily basis starting next week as the chart structure remains excellent. The problem with November soybeans is the fact that traders are concerned about another huge crop this fall and that could definitely pressure prices back down to the $8.50 range in my opinion as I think the grain market in general is a secular bear market which will continue unless some weather event happens this summer. If you agree with my scenario on where the soybeans are headed you might want to look at November put option spreads taking advantage of volatility over the summer limiting your risk to what the premium costs while giving you plenty of time for the trend to develop as those options don’t expire until late October.
TREND: LOWER
CHART STRUCTURE: POOR
Corn Futures
Corn futures for the December contract which is considered the new crop which will be harvested this fall is trading at its 20 day but below its 100 day moving average trading sideways in the last 2 weeks with very little volatility as traders are keeping an eye on the next crop report in 2 weeks as that might add some price movement to this market. This market still looks to be in a major secular bear trend as I see prices going sideways until spring &I do see corn prices possibly breaking $3.00 a bushel come harvest time due to oversupply and weakening demand. My prices projections are based on another record crop this year with another 14 billion bushels but as you all know the weather can change supply/demand tables very quickly and if another major drought hit the Mid-West it can change the trend like it did in 2012 causing corn prices to trade as high as $8.50 a bushel which was the all-time high causing the fundamentals to change very quickly.
TREND: SIDELINES
CHART STRUCTURE: EXCELLENT
Wheat Futures
Wheat futures in the March contract finished down about $.10 for the trading week continuing one of the best bear markets the commodities have seen in quite some time as prices virtually go down every single day & I’m still recommending a short position placing your stop above the 10 day high which is at 5.78 which is about $.22 away or $1,100 as worldwide supplies and excellent growing conditions in wheat growing regions around the world hurting prices which still seem expensive. I’ve been recommending a short position in the wheat market for quite some time as the trend continues to get stronger and stronger as every week goes by still trading far below its 20 and 100 day moving average as I do think prices can go as low as 4.50 where they were in 2010 before Russia had weather problems sending wheat from the $4 range up to the $8 range in just a matter of weeks. Continue to play this market to the downside and look at the March put options as volatility is still low and the trend is getting stronger.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Cotton Futures
Cotton futures are trading above their 20 and 100 day moving average down slightly for the week going out this Friday in New York at 86.20 consolidating the recent moves to the upside as this market is still near 4 month highs. The next major resistance is at 88 and then the contract highs of 90.60 and if you are long this market place your stop at 83.80 in the March contract as an exit strategy.
TREND: HIGHER
CHART STRUCTURE: SOLID
Coffee Futures
Coffee futures exploded to the upside for the 3rd consecutive trading day hitting 5 month highs at 125.20 a pound up over 1100 points for the week as investors are pouring in thinking that the long term bottom in coffee has finally been hit in the last several months. Coffee is trading above its 20 and 100 day moving average telling you that the trend in the short term is higher but at this point this market has absolutely terrible chart structure so I have a hard time buying it because the 10 day low is at 114 risking around $4,400 per contract so I’m recommending to sit on the sidelines and wait for some better chart structure to develop as I do think there will be profit taking eventually. The U.S dollar hit a 7 week high today and I believe that eventually could start to pressure commodity prices especially with the emerging markets now having difficulties but the trend in some markets have been heading higher despite that headwind and coffee prices historically are still relatively cheap. Keep an eye on this market as the real volatility will start in the month of May when we begin frost season down in Brazil but it does look to me that coffee is in a bottoming process.
TREND: HIGHER
CHART STRUCTURE: AWFUL
Sugar Futures
Sugar futures in the March contract finished sharply higher for the 2nd consecutive trading session closing at 15.55 now trading above its 20 day but still below its 100 day moving average as I’ve been recommending a short position in sugar for quite some time getting stopped out as today as prices hit the 10 day high as funds liquidated huge short positions so sit on the sidelines and wait and see what develops. I’m a technical trader and I must have some exit strategies in place and my exit strategy is placing my stop at the 10 day high but you can have something different possibly a 15 day high or 7 day high so create some type of exit strategy for your personal account still maintaining the proper risk management as I do think prices are still headed lower but I can’t recommend a short position at this time as the trend has now turned neutral here in the short term. If you’re not a trend follower I would have to believe that you have to continue to sell sugar as supplies are too high as there are some dry areas in Brazil which is causing some concern possibly cutting some crop production, however I think today was massive short covering as the funds covered in today’s trading session.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
U.S. Dollar
The US dollar rallied sharply higher by 90 points in the March contract this week closing around 81.40 with stiff resistance at 81.50 and if that level is broken you’re talking about 4 month highs and I have been recommending a bullish position in the dollar for quite some time as I do think higher interest rates are coming in the United States which will push the dollar higher against the foreign currencies and if you been taking my recommendation I would place my stop at the 10 day low which was hit about a week ago at 80.22 making sure that it closes below that price not intraday as I go by closing prices only. The U.S dollar is trading above its 20 and 100 day moving average and I do believe the trend is higher and if you look at the daily chart it has outstanding chart structure allowing you to place tight stops in case you are wrong minimizing your monetary loss and I do believe with the Federal Reserve tapering down to 65 billion from 85 billion I think the U.S dollar is headed higher and I expect a lot of buy stops above 81.50 which could be triggered in Monday’s trade as I remain bullish.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Euro Futures
The Euro currency was sharply lower down 160 points this week at 1.3500 retesting possible lows next week at 1.33 and if that level is broken you are talking about 4 month lows as the tapering program in the United States is starting in full force which is putting pressure on the Euro currency. If you’re looking to get short the Euro currency my opinion would be to sell a futures contract at today’s price while putting my stop at the 10 day high which was hit last week around 1.3740 risking around $2,700 per contract if you are wrong on the trade. If your bullish the Euro currency my recommendation would be to buy a futures contract at today’s price and put a stop below the 10 day low which is 1.3480 risking around $1,000 per contract but I do believe that prices are headed lower.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Live Cattle Futures
Live cattle futures in the April contract went out this Friday afternoon in Chicago at 140.72 slightly higher for the trading week basically consolidating the recent run-up in prices as the bull market continues in my opinion as prices I think will retest the contract high of 143 and possibly move higher up to the 150 level as the chart pattern still dictates higher prices. Cattle futures are trading above their 20 and 100 day moving averages. This is been one of the best trends in the commodity markets for quite some time with the smallest herds in almost 6 decades and lower feed costs as this market has not topped out in my opinion. Volatility is not out of control at this time and I’m very surprised by that because when prices are at all-time highs volatility is also right near all-time highs so I don’t think this market has topped out until the volatility spikes higher and at the present time it still has pretty solid chart structure allowing you to place a stop loss below the 10 day low minimizing your risk in case you are wrong.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Lean Hog Futures
Lean hog futures in Chicago settled around 94.60 a pound basically unchanged for the trading week and I’ve been recommending a long position in this market for quite some time as it does have outstanding chart structure allowing you place your 10 day stop at 91.60 if you took my recommendation on the 4 week breakout as prices continue to move higher as solid demand is currently propping up prices despite the fact that the U.S dollar is right near a 7 week high. As I’ve talked about in many previous blogs I thought hog prices would start to catch up to the cattle market as cattle prices are at all-time highs and I do think there’s a high probability that hog prices can reach 100 in the next several weeks as the bull market continues in my opinion. The next major resistance in hogs is the contract high around 96.25 which was hit 3 months ago and if those levels are breached look for a possibility of prices going to all-time highs as well.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Feeder Cattle Futures
Feeder cattle prices are trading above their 20 and 100 day moving average in the March contract going out this afternoon around 169.60 up around 90 points trading higher for the week right near contract highs at 171 which is also historical all-time highs& in my opinion this market still has outstanding chart structure and I believe higher prices are here to come. If you think that prices are headed higher my strategy would be to buy at today’s price placing a stop below the 10 day low which is 166.50 risking around $1,500 per contract as traders are also awaiting the USDA crop report in a couple weeks which could send volatility back into this market. Feeder cattle prices have basically gone nowhere in the last 3 weeks and I do believe the next leg will be to the upside so I remain bullish the cattle markets.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Orange Juice Futures
Prices are trading at their 20 day and above the 100 day which tells me that this is a sideways trend and should be avoided at the current time so wait for a solid trend to develop. Prices spiked in early January as frost concerns sent prices sharply higher but when the crop wasn’t affected prices dropped a couple days later as now traders await for the next USDA crop report in 2 weeks. March orange juice prices traded up 2.85 points this Friday afternoon closing at 142.55 and traded as high as 144.50 in early trade.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Where Should You Place Your Stops? Identifying where stops exist in the market is an important lesson to learn because placing a correct stop loss that will improve your trading tremendously over the course of time. Nobody knows for sure where stops are located, however I have learned a couple of things over my 20 year career and I have a general idea where stops are placed and why. Buy stops are generally placed above the 10 day high as well as above contract highs as the bulls generally are buying more and the short selling are getting stopped out. Sell stops are usually placed at the 10 day low as well as below contract lows which means the shorts are adding to their position and the longs are getting stopped out as they figure they are wrong. The other common places to have stops are at certain moving averages such as the 20 or 100 day moving average where traders think either the trend is turning bullish or the market is starting to break down. Placing stops to close or not at important price levels can get very frustrating because the market can stop you out and then go the direction that you thought leaving you behind and out of the market. Placing stops is one of the most important aspects of trading in my opinion.
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
http://ift.tt/1fGCqDc
Twitter–@seeryfutures
Phone #: (800) 615-7649
mseery@seeryfutures.com
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