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--- Gold futures in the June contract settled higher for the 2nd consecutive trading session cracking $1,300 an ounce after hitting new recent lows yesterday before the Ukrainian situation was stirred up once again this could be a problem for months to come as gold is held major support 1,280 currently I’m not recommending a position in this market as the trends choppy but keep an eye on this chart and wait for better chart structure to develop. Gold futures are trading above their 20 and 100 day moving average telling you that the trend is higher despite the fact that we are right near recent lows as the market remains choppy but with the stock market rallying recently investors sought no reasonable gold but the money flow came back into this market as political tensions are heating up. If your bullish the gold market my recommendation would be to buy a futures contract at today’s price of 1,300 while placing your stop below yesterday’s low of 1,264 risking around $3600 but the true breakout will not occur until prices break the April 14th high of 1331.
TREND: SIDEWAYS
CHART STRUCTURE: POOR
Silver Futures
Silver futures in the July contract finished the trading week up about $.05 to settle around 19.70 an ounce after giving below $19 in Wednesday’s trade only to rebound sharply on news of the Ukrainian crisis heating up sending gold and silver higher on the trading session and if you been reading any my previous blogs I always remain bullish silver as I think prices are relatively cheap however we are stuck in the mud currently. The $19 level in silver has held up 7 or 8 times in the last 6 months and I do not believe prices are headed lower back price as the commodity markets in general continue to move higher and it’s just a matter of time. In my opinion before silver start to join the party as silver is considered highly inflationary commodity and with grains, meats, softs, and the energy markets all heading higher so eventually silver will get out of this consolidation breaking out to the upside. If you have deep pockets and a longer-term horizon I definitely recommending buying silver at today’s price as I think you will be rewarded in the long term as silver prices have come down from $35 in the year 2013 and now is down below $20 as I currently write this article. Silver futures are trading right at its 20 day but below its 100 day moving average telling you that the trend currently is mixed or sideways as the true breakout will be about 20.40 to the upside so keep a close eye on this market.
TREND: SIDEWAYS
CHART STRUCTURE: EXCELLENT
Orange Juice Futures
Orange juice prices in the May contract were down for the 2nd consecutive day finishing lower by 230 points to close around 162.40 and I’ve been recommending a long position in orange juice for quite some time as prices continue to move higher but the May contract looks like it’s kind run out of steam as I’m placing my stop at the 10 day low at 160 which is only 200 points away as the July contract remains strong as investors are selling the May & buying the July. The chart structure in orange juice is outstanding at the present time while prices are still trading above their 20 &100 day moving average as we are hanging in there by the skin of our teeth and if you have not taken my recommendation & are looking to get into this market buy a futures contract at today’s price put your stop at 160 risking only about $300 per contract as the chart structure is so tight at this time which allows you to place a tight stop minimizing monetary losses if you are wrong.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Wheat Futures
Wheat futures in the December contract are trading above their 20 and 100 day moving average finishing higher for the 4th consecutive trading session closing out at 7.30 right near recent highs as the problems in Ukraine are supporting prices as I am also hearing that the US crop is not that great either so prices look bullish in my opinion as I’ve been sitting on the sidelines in this market for quite some time. If prices break 7.40 you would have to become bullish while placing your stop below the 10 day low which is around 6.88 risking around $.50 or $2,500 per contract as wheat has been trading in a $.50 channel over the last 5 weeks as a breakout is looming in my opinion so look to be a buyer as the whole grain market seems very bullish heading into the weekend
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee futures in the July contract are ending the week on a sour note finishing down around 500 points to close around 209.70 while still trading above its 20 and 100 day moving average hitting new contract highs earlier in the week settling down about 500 points for the trading week in New York. I’ve been recommending a long position in coffee however the chart structure is very poor at this time and this trade is only for people with deep pockets and large trading accounts as its extremely volatile with high risk but I do believe that prices are headed higher and on any further weakness I would take advantage and get long the futures or a bull call option spread as the crop in central Brazil was absolutely devastated and I’m still hearing reports from some of my contacts down in Brazil that higher prices are coming as we will see an estimate on how many bags will actually be produced in the coming weeks and they are telling me that production is much lower than what currently is anticipated so only time will tell but I do believe prices are headed higher.
TREND: HIGHER
CHART STRUCTURE: TERRIBLE
Sugar Futures
Sugar futures in the July contract are trading above their 20 and 100 day moving average settling last Thursday which was the last day of the trading week due to the Good Friday holiday at 16.66 and going out this Friday afternoon around 17.83 up slightly for the trading week as prices have been going sideways in recent weeks with high volatility. I’m recommending to sit on the sidelines in this market as I do think prices are headed higher but I’m not currently involved because the trend is mixed so be patient and look for some other markets with stronger trends but I will stick with my theory that anything grown in Brazil currently is moving higher but a true breakout has not occurred. If you’re looking at a short term trend I would be looking at buying a breakout above 18.05 as the commodity markets in general still look to go higher in my opinion and the soft commodities are some of the strongest trends to the upside.
TREND: SIDEWAYS
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures in the July contract exploded on the close to finish up $.26 at 14.96 trading right at session highs finishing down about $.06 for the trading week although closing on a very strong note and I still am extremely bullish old crop soybeans and if you been reading any my previous blogs I’ve been recommending to get long the July contract while placing your stop below the 10 day low 14.45 risking at this point about $.50 or $2,500 per contract. The fundamentals are very strong in the old crop soybeans as supplies are very low and I talk to many farmers throughout the day and they all tell me the same thing that there just aren’t old crop soybeans around so I think higher prices are still ahead as this chart has excellent structure so continue to buy weakness in July soybeans. November soybeans which is considered the new crop which will be harvested this fall and we were expecting about 3.5 billion crop come October, however this market continues to move higher regardless of the fact that there could be a record crop harvested closing up another $.08 at 12.38 a bushel right near recent highs and it looks to me that it will continue here in the short term as the grain market certainly looks bullish in my opinion. Soybean futures are trading above their 20 and 100 day moving average telling you that the trend is to the upside and if this market experiences any weather difficulties such as a drought you could see extremely higher prices as I still do believe old crop soybeans could hit all-time highs this summer.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Cotton Futures
Cotton futures are trading above their 20 and 100 day moving average trading in a very tight consolidation over the last 4 weeks while currently I am sitting on the sidelines as this market is waiting for a breakout to occur as there is major support at 90 after settling last Friday at 92.35 rallying about 70 points this week in relatively quiet trading action. This market is trendless currently but if you are bullish cotton my recommendation would be to buy at today’s price and place your stop at 90 risking around 300 points or $1,500 per contract as the overall trend is still higher. There are some concerns that China is reducing some of its ample supplies of cotton onto the market therefore putting some pressure on prices but cotton has been holding up relatively strong just like the grain market as these markets sometimes follow one another as the commodities in general still remain bullish so keep a close eye on this with a possible breakout to the upside next week.
TREND: SIDEWAYS
CHART STRUCTURE: EXCELLENT
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
Milk Futures
Milk futures in the May contract closed up another 60 points this week closing at 22.70 finishing 16 points lower this Friday afternoon hitting a new contract high as this trend continues to get stronger to the upside as the fundamentals are very strong due to the fact that we have a shortage sending prices up about 50% in the last 6 months and now I’m recommending a long position in the May contract placing a stop below the 10 day low which currently stands around 21.20 risking around $3,000 dollars per contract. Milk prices are trading above their 20 and 100 day moving average telling you that the trend is higher and if you’ve noticed going to the grocery store lately prices certainly have jumped higher. If you look back at the daily chart just 6 months ago prices were trading at 16.50 with great chart structure and then this market took off so I remain bullish and it doesn’t matter to me what market I trade as long as the trend and the chart structure look solid.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Corn Futures
Corn futures in the December contract rallied about $.10 this week after trading as low as 4.88 in Monday’s trade only to settle this Friday afternoon at 5.05 a bushel right near recent highs as planting concerns are pushing prices higher. I talk to a lot of farmers especially in Iowa and they continue to tell me that they are concerned about planting as its been cold and wet and heavy rains are expecting over the weekend which has been supporting prices in recent days as I remain neutral this market as I was stopped out after being long for quite some time but I do think prices are moving higher. The true breakout in corn is the spike top which was hit a couple weeks ago at 5.17 and if prices break that level I would be recommending a long position in corn as I still do think prices look cheap as this year will not be a record crop as estimates are around 13.5 billion bushel crop which is 500 million bushels lower than last year and the possibility of some acres being washed away and it looks to me that corn is moving higher. If you want to get in this market at today’s price my recommendation would be to buy a futures contract at 5.05 while placing my stop below 4.88 risking $.17 or $850 per contract.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
5 Year Notes
The 5-year notes finished higher by 6 points this week as concerns about Ukraine sent yields lower with the five-year note to close around 1.70% & I’ve been recommending a short position in the bond market for months and I still think it will be one of the best trades to develop over the course of time as inflation looks like it’s starting to come back as the commodity markets certainly have rallied sharply off their lows and we might be in a bullish commodity cycle at this time which will put pressure on bond futures which means the interest rates rise. In my opinion the Ukrainian situation will be forgotten soon and investors will start to buy stocks and sell bonds.
If you’re a long term investor I would continue to sell the five-year notes as the Federal Reserve is starting to taper back the purchase of the five-year note and that is also can put pressure on this market, however prices have rallied in the recent months due to the fact that volatility is come back into the S&P and I might have been a tad early but this but this a very long-term trade which I’m telling investors to stay in for several years as this should be part of a balanced portfolio because you will look back in a couple years and say why didn’t I take advantage of interest rates at 1.70% and not act accordingly because when prices get to extreme highs and the extreme lows sometimes those are the best opportunities and right now yields are not at historical lows but they are very close and eventually in my opinion will rally and if you construct your portfolio correctly limiting your risk and maximizing your reward over the course of time the bond market in my opinion is the place to be in the year 2014.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Cocoa Futures
Cocoa futures in the July contract continue to trade in a 12 week consolidation finishing sharply lower in the last 2 trading sessions finishing down about 60 points to close around 2950 and at the current time I’m still recommending sitting on the sidelines and wait for a true breakout to occur as my theory states the longer the consolidation the stronger the breakout & at this point I just don’t know where prices are headed. If you trading in a consolidation it can become very frustrating because of the choppiness as one day is up and the next day’s down and that’s exactly what is happening in cocoa as prices are trading below their 20 day but above their 100 day moving average going out on a sour note in New York this afternoon so sit on the sidelines but continue to keep an eye on this market.
TREND: SIDEWAYS
CHART STRUCTURE: EXCELLENT
Live Cattle Futures
Live cattle futures in the June contract rallied 250 points this week rallying in the last 3 days to close at 137.00 a pound with the possibility that prices may have hit a short-term low in last week’s trade at 134.00 and if you’re looking to enter into this market as I am currently sitting on the sidelines due to the fact that there really is no short-term trade but if you’re bullish this market I would like today’s price in place my stop below that level of 134 risking around $1,150 per contract as prices might retest 1391. Cattle prices are right at a historical highs as we enter the demand season of summer so there’s a possibility here in the short term prices have bottomed but remember when trading commodities make sure you’re using the proper money management technique minimizing monetary losses when you are wrong so make sure you have the appropriate amount of contracts on. The commodity markets still look bullish in my opinion and it would not surprise me at all if prices make new all-time highs.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Natural Gas Futures
Natural gas futures in the June contract finished down 10 points this week to close around 4.65 as I’m recommending a long position in this contract placing my stop loss below the 10 day low which stands at 4.50 risking around 15 points or $1,500 per contract as the trend is still higher in my opinion as the risk reward situation is highly in your favor as we enter the demand season of summer. Natural gas prices have been in a bull market for quite some time and if you read some of my previous blogs several months back when prices were in the low $3 I was recommending if you have deep pockets and a longer-term horizon to buy natural gas as prices were extremely cheap due to the fact of large supplies, however we had an extremely cold winter which reduced supplies dramatically and I do think natural gas prices will be sharply higher from today’s level in the next year as prices have bottomed out in my opinion. As a trader I focus on today and tomorrow only so when I can buy a natural gas contract and risk 1,500 I will take that trade even if I don’t believe the trade. Natural gas prices are trading above their 20 and 100 day moving average telling you that the trend is higher after we consolidated in the month March after the big run-up in early winter as prices seem to be resuming back up to the upside so play this market to the upside using my stop loss and proper risk management.
TREND: HIGHER
CHART STRUCTURE: OUTSTANDING
When Do You Enter A Trade? -- What are your rules to initiate a trade on the long or short side of the commodity market? I have been asked this question many times throughout my career and my opinion is simply to buy on a 20-25 day high breakout in price on a closing basis only or sell on a 20-25 day low breakout to the downside also on a closing basis. Many times the price will break the 25 day high and sell off later in the day only to have your trade be negative very quickly. I would rather buy the commodity at a higher price on the close because that gives me more confidence that the market has truly broken out. However there are more ways to skin a cat and this is not the only answer because some other trading systems might rely on different breakout rules that have also been reliable. Remember always keeping a 1%-2% risk loss on any given trade therefore minimizing risks because the entry system I use always goes with the trend because I have learned over the course of time the trend is truly your friend in the long run. I also look for tight chart structure meaning a tight trading range over a period of time with relatively low volatility. I try to stay away from a crazy market that hit a 25 day high in 2 trading sessions versus the 25 high that actually took 25 days to create.
When Do You Exit A Trade? -- The biggest question that I have been asked is when do I exit a winning trade and when do I exit a losing trade? In my opinion the rule of thumb that I use is placing my stop loss at the 10 day high if I’m short or a 10 day low if I’m long. The other rule of thumb is to place your stop loss at the 2% maximum loss allowed in your account for any given trade.
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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