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.
Coffee Futures
Coffee Futures in the May contract are trading above their 20 day moving average and are trading 8000 points higher than their 100 day moving average that’s how far prices have come in the last 6 weeks as the drought in central Brazil continues its stranglehold on coffee growing regions pushing prices sharply higher currently trading at 198 in the May contract and I’ve been recommending a long position in coffee and if you’re still in this market I would place my stop below the 10 day low which is currently 170 as the chart structure is starting to improve & if you been reading my previous blogs I received a very interesting email last week from one of the largest coffee producers in Brazil and he was stating that there crop was absolutely devastated and there could be long-term ramifications into next year as well and he also showed me many pictures of coffee trees and they were decimated too so I continue to remain bullish this market, however this market is extremely volatile at the current time so look at some July bull call option spreads as my next level is up to 2.50/2.75 as a possible target.
TREND: HIGHER
CHART STRUCTURE: INPROVING
Sugar Futures
Sugar futures in the May contract sold off 31 points this Friday afternoon in New York but still finished higher by about 40 points for the trading week continuing its bullish trend as the drought in central Brazil is pushing up prices in recent weeks and I continue to recommend a bullish position in sugar while placing your stop loss at the 10 day low which currently stands at 17.00 which is about 100 points away or $1,100 per contract. This is the 3rd consecutive week that sugar has traded higher and has turned from a bear market into a bull market with the next major resistance around 19/1950 which was hit last October and I do believe prices could go back up to those levels as the commodity markets in general have turned higher as the CRB index its trading at its highest level since October 2012 as many commodities are at all-time highs. Anything grown in Brazil at this time due to the drought seems to be moving higher so I remain bullish the entire soft commodity complex just make sure that you do have an exit strategy in case prices turn around. Sugar futures are still trading above their 20 and 100 day moving average telling you that the trend currently is higher.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures rallied on the close finishing at 11.90 in the November contract also hitting a 5 month high all due to the fact of the drought in Brazil propping up soybean prices but the real story is the front month which is the May contract up another $.21 at 14.59 and I’m hearing from some of my associates that there is a possible squeeze in the front month pushing prices possibly up to $16 a bushel here in the coming weeks as there is tremendous demand for old crop soybeans. have been recommending a long position in the November crop which is much less volatile but if you are in the May contract continue to be long as I do think higher prices are ahead as prices are trading are above their 20 and 100 day moving average and anything grown in Brazil at the current time is moving higher so continue to raise your stop at the 10 day low.
Traders are awaiting Monday’s USDA crop report to see how many acres will possibly be planted but it is too early to write these numbers in stone as the month of April/May is critical for corn planting and if we remain wet farmers could be unable to plant that it will give more aces to soybeans but I do believe that crop prices across the board are going higher. The U.S dollar hit a new low this week and that is also spurring the commodity markets higher while the CRB index hit its highest level since October 2012 so the momentum is definitely on the bullish side so continue to play the trends to the upside.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee Futures in the May contract are trading above their 20 day moving average and are trading 8000 points higher than their 100 day moving average that’s how far prices have come in the last 6 weeks as the drought in central Brazil continues its stranglehold on coffee growing regions pushing prices sharply higher currently trading at 198 in the May contract and I’ve been recommending a long position in coffee and if you’re still in this market I would place my stop below the 10 day low which is currently 170 as the chart structure is starting to improve & if you been reading my previous blogs I received a very interesting email last week from one of the largest coffee producers in Brazil and he was stating that there crop was absolutely devastated and there could be long-term ramifications into next year as well and he also showed me many pictures of coffee trees and they were decimated too so I continue to remain bullish this market, however this market is extremely volatile at the current time so look at some July bull call option spreads as my next level is up to 2.50/2.75 as a possible target.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Cotton Futures
Cotton futures in the May contract traded limit up 300 points in yesterday’s trade and finished up about 400 points for the trading week closing out around 91.25 hitting a new one year high as the bull market continues & if you’re looking to get long this market I would buy a futures contract at today’s price placing a stop below the 10 day low which is right around 86.00 risking around 600 points or $3,000 per contract, but remember this stop will be moved up on a daily basis starting next week. The trends continues in many of the commodity markets to the upside as demand has certainly come back in to these markets as the U.S dollar continues to hit new lows pushing commodity prices higher, however the chart structure in cotton at this time is not that great but should improve over the course of time as the trend in cotton is higher as prices are still trading far above their 20 and 100 day moving average as traders are awaiting Mondays USDA crop report which is highly anticipated & should lend short-term price direction.
TREND: HIGHER
CHART STRUCTURE: SOLID
Orange Juice Futures
Orange juice futures this week broke out of a 14 week consolidation and if you’ve been following me on any my previous blogs I was recommending buying orange juice last week, as prices have broken out and I still think prices have just started their bullish run while placing my stop loss below the 10 day low of 142 risking around 1200 points for $1,800 from today’s prices as I do think orange juice will follow sugar and coffee higher as the soft commodities are bullish across the board. I love trading markets that break out of consolidations because that puts the odds in your favor as I took the breakout in silver a couple weeks ago and that commodity basically fizzled out not extending higher but not creating a monetary loss just disappointing that prices didn’t continue higher but then the orange juice market broke out of a 14 week consolidation and I think that’s very bullish to the upside but only time will tell to see if we prices move higher as my next target of 170 in the May contract.
The chart structure in orange juice is outstanding and so whenever I see that I try to take that trade regardless of what my opinion is as long as the risk reward situation is in your favor allowing you place multi contracts due to the fact that you can place a very tight stop loss. Orange juice futures are trading above their 20 and 100 day moving average and I sound like a broken record as many of the commodities are also above both as well as the bull trend certainly is here in early 2014 and eventually I think that will continue to the upside due to all the worldwide monetary printing
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Corn Futures
Corn futures in the December contract which is the new crop which will be harvested this fall was down $.05 at 4.84 but rallied about $.13 for the trading week closing on a disappointing note in Chicago and I’ve been recommending a bullish position in corn for quite some time while placing my stop at the 10 day low which currently stands at 4.60 risking around $.24 from today’s level or $1,200 per contract as traders are awaiting Mondays USDA crop report. The chart structure in corn is outstanding at this time and that is why am recommending this trade as prices are trading above their 20 and 100 day moving average continuing the bullish trend as Spring is right around the corner here in Chicago as there is still large amounts of snow in the fields but we are starting to warm up this week with 40/50° days and this should be an extremely volatile year in corn as prices will have tremendous fluctuations due to weather conditions. The whisper number for Monday’s crop report is around 92 million acres as last year was 97 million acres planted so the crop probably will not be a record this year as we harvested nearly 14 billion last year but this will be a long growing season but at the current time. I’m recommending buying on weakness making sure that you have some type of exit strategy as I think commodities as a whole are going higher.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Wheat Futures
Wheat futures in the May contract finished higher by 7 cents trading around 6.53 a bushel continuing its bullish trend rallying over $.50 for the trading week as prices now have hit a 3 month high. It’s amazing how the commodity markets can work sometimes I was bearish this market in 2013 and got stopped out when prices hit the 10 day high in the 1st week of February at 5 .78 and I was upset as I thought prices were still going lower and that is why you must have an exit strategy because this has turned into a bull market with prices looking to possibly retest the $7 level here in the next couple of weeks as the trend certainly has turned higher as prices are trading above their 20 &100 day moving average but the problem with this market is the gap on the daily chart which was created on Monday because of the Ukrainian news which concerns me also it has terrible chart structure at this time so I’m advising the sit on the sidelines in this market and wait for a better chart pattern to develop. If you are bullish this market and want to participate my recommendation would be to buy a futures contract at today’s price placing stop below 5.90 bushel which is the 10 day low risking around $.65 or $3200 per contract.
TREND: MIXED
CHART STRUCTURE: AWFUL
Oat Futures
Oat futures have been on a wild ride trading near all-time historical prices down about $.15 for the trading week & over $.50 from Tuesday’s high as prices traded above $5 a bushel settling today at 4.46 as there have been shipping problems in Canada due to the frozen rivers and lakes causing prices to skyrocket here in recent weeks. In my opinion this market is extremely wild and I think it is helping push up some of the other grain prices higher, but I would be looking at sitting on the sidelines as a possible top may have been created & the one thing I know is weather situations like Canada will end as Spring is starting next week and that could put some pressure as prices have gotten out of control to the upside. In the old days of trading traders used to look at the oat market to help them dictate where the other grain markets could head and that is exactly what happened here recently as the oat market was the only bull market in the grains and all of the others were going lower and then suddenly 2014 occurred and all the grain markets joined the party to the upside so continue to look at this as a leading indicator of where grain prices could head.
TREND: HIGHER
CHART STRUCTURE: AWFUL
Live Cattle Futures
Live cattle futures in the April contract are trading above their 20 and 100 day moving average basically settling unchanged this Friday afternoon which but traded lower by 175 points for the trading week. I’ve been recommending a long position in cattle while placing my stop loss below the 10 day low which currently stands at 141 which is a little over 200 points from today’s level or around $800 per contract as the chart structure still remains outstanding in my opinion with the smallest herds in nearly 60 years as this market still looks to go higher in my opinion. It was an interesting day last Wednesday when prices opened up over 100 points and then went limit down about 300 points before settling down 200 points as many people think that could be a possible short-term key reversal, but in my opinion I don’t think it top has been made as I think 147 will be retested next week as traders are awaiting a highly anticipated USDA crop report which comes out Monday afternoon.
Feeder cattle prices for the April contract basically finished unchanged for the trading week while still having outstanding chart structure on the daily chart and I’m still recommending a long position as prices should continue to hit all-time highs next week placing my stop below the 10 day low of around 171 risking around 250 points for $1,250 per contract as the trends remain very strong in the meat sector as I think prices have been consolidating in the last 2 weeks but this market has been one of the strongest in the last year and I do believe the top has not been formed as volatility remains relatively low despite the fact that prices are all-time highs which usually means extreme volatility but until that extreme volatility shows up I remain bullish. Feeder cattle futures are trading above their 20 and 100 day moving average and if you look at the charts it continually grinds higher to the upside and I like markets that do that and this is all based on the demand/ supply situation which is extremely tight meaning very low supplies.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
U.S. Dollar Futures
The U.S dollar sold off slightly this week finishing at 79.70 hitting a 12 week low looking to retest the contract lows which were hit 4 months ago around 79.40 as I’m recommending a short position in the U.S Dollar Index placing my stop above the 10 day high which currently stands at 80.60 risking around $800 per contract as the trend now has turned bearish in my opinion. The commodity markets certainly like the fact that the U.S dollar is headed lower as well as the bond market rallying sending interest rates to new recent lows as it reminds me of 2006 all over again when stocks and commodities moved higher as the U.S equity market hit all-time highs in the S&P 500.
Remember when you trade you want to try to keep it simple and this trade is extremely simple by recommending selling one futures contract and continuing to place your stop at the 10 day low as I do think contract lows will be breached next week as the Euro currency finished up over 100 points in the last 2 days to close above 1.3870 also hitting new recent highs with 1.40 next resistance point.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Bond Futures
The bond market finished lower for the 3rd straight trading session on Friday especially the five-year notes finishing down 12 ticks to close at 119 – 06 in the June contract having one of its weakest 3 days in over 2 months as the unemployment number came in at 175,000 which was construed as extremely bullish the economy sending bond yields higher. I have been advising a short position in the five-year note for several months and I still believe if you’re a longer-term investor and not necessarily a trader who gets in and out these are terrific selling opportunities as next month’s unemployment number in my opinion will improve and I think this is just an up day that you should be taking advantage of to get short. The five-year note is trading below its 20 & 100 day moving average hitting a 5 week low on Friday with large volume and if you’ve followed me on any of my previous blogs I generally place my stop at the 10 day high or low as an exit strategy, but as I stated earlier I am a long-term investor on the five-year note as I think rates are moving higher over the course of time and this is a trade you might stay in for 2 years but take advantage of historically low rates because eventually the Federal Government will stop there bond purchases it’s just a matter of when. If you have any questions on how to structure a portfolio to getting short the bond market while taking advantage of historically low rates feel free to contact me anytime will be more than happy to help.
TREND: LOWERR
CHART STRUCTURE: AWFUL
Cocoa Futures
Cocoa Futures--- Cocoa futures in the May contract finished up 20 points this Friday afternoon to close around 2,980 finishing higher for the trading week and it looks to me that prices will break 3,000 next week and this chart is very interesting in my opinion due to the fact that it has a tight consolidation between 2,900 – 3,000 and if prices break out above that level I would place my stop below the 10 day low of around 2,880 risking around $1,200 per contract as the trend still remains higher. If you’re looking at getting short this market and think prices have topped out my recommendation would be to sell it at today’s level place a stop at 3,010 risking around $350 per contract as the chart structure is very tight.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Lean Hog Futures
Lean hog futures in the April contract continued their unbelievable run higher as stories of a serious disease are pushing prices higher as the 10 day low currently is around 99.00 which is 1500 points away and I’ve been recommending a long position but have been taking profits up at these levels so whatever trading system you use my suggestion would be to tighten up your stop if you currently are long but I do believe higher prices are ahead especially with Russia allowing pork imports which really spurred this market higher as we had 4 consecutive limit up trading days. The chart structure in hogs is awful so if you’re not in this market currently sit on the sidelines and wait for a better pattern to develop and I’m not recommending any type of short position in this market as I still remain bullish and I think you play this to the upside but the market has gotten out of control with extreme volatility so you must be careful. The breakout in the hogs occurred in early January above $.92 and as a technical trader that was the only reason I was recommending buying as I knew nothing about this disease or any of the fundamentals as I am a technical trader and that is what I’m trying to teach all of my readers as well and I use a 4 week high or a 4 week low to enter.
TREND: HIGHER
CHART STRUCTURE: Awful
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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