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 prices had a volatile trading week basically finishing unchanged to settle around 1,298 in the June contract after having a tremendous reversal selling off down to 1,272 when the monthly unemployment number was released adding 280,000 jobs which is bullish the economy and bearish gold but then turned on a dime with the Ukrainian problems escalating sending gold finishing up $14 this Friday right near session highs as prices have been consolidating in recent weeks. I’ve been sitting on the sidelines in the gold market for quite some time as this market remains choppy and it might be bottoming at the current price levels as gold rallied $200 to start the year but now has given back over $100 so were at about the 50% retracement so if your bullish gold I would buy a futures contract at today’s price while placing my stop at the 10 day low which is also the 10 week low of 1,268 an ounce risking around $3,000 per contract. I’ve lived through many of these political escalations including one last August with Syria and they always seem to fizzle away so we will see if today’s rally will do the same but sit on the sidelines and see what develops. The one thing gold does have going for it is trading above its 20 and 100 day moving average which is telling you that the trend might be turning higher as prices could be bottoming out.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Silver Futures
Silver futures are trading below their 20 and 100 day moving average as volatility has come back into this market in the last week as prices reversed sharply off of yesterday’s contract lows of 18.66 to go out this Friday afternoon at 19.47 an ounce and if you been reading any of my previous blogs for months I’ve been talking about the possibility of silver bottoming at the $19 level and if you have deep pockets and you’re a longer-term investor I’m recommending that you buy silver as I think prices are cheap. I am bullish silver not because of the Ukrainian problems but because of the fact that the commodity markets are in a bullish trend and silver will catch up eventually as this is a highly inflationary commodity with a lot of demand as silver is used in smart phones unlike gold which really has no purpose except for a flight to quality and jewelry. Prices reversed today because of the Ukrainian situation seems to be escalating and it sent prices sharply higher but the true breakout in this market is at 20.40 that’s where I really would be recommending to get long and if you are in a futures contract already I would be adding to my position if prices break that level as a spike bottom may have occurred in yesterday’s price action.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Crude Oil Futures
Crude oil futures in the June contract finished up around $.35 this Friday afternoon in New York as prices were down about $2.00 for the trading week right near 4 week lows and I am neutral in this market currently and waiting for a better trend to develop as supplies are at 85 year highs here in the United States which is a bearish factor however you also have problems in the Ukrainian region which is a bullish indicator so this market could remain choppy so wait for better chart structure to develop. Crude oil futures are trading below their 20 day moving average but above their 100 day moving average telling you that the trend is mixed so look for a better trending market to get involved with.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Orange Juice Futures
Orange juice futures in the July contract finished up 300 points this Friday afternoon closing at 160.50 trading in a 700 point range this Friday afternoon settling last Friday at 165 as prices hit a 2 week low and I’m recommending to sit on the sidelines and wait for another trend to develop, however in my opinion I still do believe orange juice prices are going higher and if you’re looking to get into this market I would buy at today’s price while placing my stop at 154 risking 600 points or $900. I’m a little disappointed in this trade as the May contract expired selling off 6 days in a row as I’ve been very bullish orange juice prices and I still think you play this market to the upside as we’ve had 2 poor crops one here in the United States due to greening disease and one in Brazil which is the largest producer of orange juice and I don’t think the bull market has ended, however I have to stick with my exit strategy but if prices breakout & make new highs above 165 I will be recommending another long position once again and that’s only 500 points away which could happen any day.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Wheat Futures
Wheat futures in the December contract are trading above their 20 and 100 day moving average trading right at contract highs finishing this Friday up $.08 to close around 7.37 a bushel continuing their bullish momentum and I am now recommending a long position in wheat futures placing your stop at 6.88 risking about $.50 per contract or $2,500 as the chart looks bullish in my opinion & the chart structure will tighten up but with the problems in Ukraine and rumors of a poor crop developing I think prices are headed higher. The wheat market has had a heckuva rally since January 1st when prices traded as low as 5.80 but then turned on a dime & in the last 6 weeks have been consolidating the run-up of over $1.50 in just a matter of 2 months and I think the next leg is higher so continue to buy weakness in my opinion as long as prices stay above 6.88 a bushel.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee futures settled last Friday at 207 while going out this afternoon in New York at 203 continuing its high volatility as prices are still trading above their 20 and 100 day moving average as the chart structure is starting to improve with the 10 day low currently standing at 194 which is about 1000 points away or $3,500 risk. As I’ve talked about in previous blogs coffee is a very large contract and should not be traded with a small trading account due to its high volatility as prices remain strong in my opinion so I’m sticking with my previous recommendation and just keep my stop at the 2 week low as will start to see some estimates on the Brazilian crop which should give us some short-term price direction. Prices have basically stalled out in the low 200s in recent weeks as prices are still consolidating the giant move up we had earlier in the year as coffee prices are about 80% in the year 2014 as the drought in Brazil really took its toll so I remain bullish.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Sugar Futures
Sugar futures in the July contract went out on a sour note Friday afternoon in New York finishing lower by 35 points at 17.45 a pound still stuck in a 4 week tight consolidation while trading below its 20 day but above its 100 day moving average telling you that trend is mixed. If you been reading my previous blogs I have been sitting on the sidelines for a while as I gave a couple recommendations early in the week stating if you want to buy this market you can purchase it at 17.45 placing your stop loss at the 10 day low which is also the 4 week low at 17.18 risking 27 points around $300 per contract, however I am currently not involved in sugar because the trend is choppy. The breakout to the upside in July sugar is at 18.03 so if prices do get to that level I would be recommending a long position while then placing your stop at 17.18 risking around 85 points or $900 per contract.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures had a wild trading week as Thursday’s trade finished down $.52 cents erasing much of the gains seen in recent weeks only to rebound $.10 higher this Friday afternoon in Chicago settling at 14.70 a bushel and I’ve been recommending a long position in July soybeans for quite some time and I still believe prices are headed higher and if you took my recommendation I would place my stop at 14.45 a bushel as the 10 day low stop was at 14.60 as I moved my stop lower because I want to give this a little more room due to the fact of extreme volatility. I still do believe prices are headed higher because of the fact of very low supplies but sometimes the markets go against you and yesterday was one of the worst trading days I’ve ever had in my career but I’m still around do to the fact that I under trade the markets meaning that I’m not over leveraged and whenever that terrible day which always comes over the course of time and blows you out of the water because you have to many contracts as I always stick to proper money management techniques. Soybean futures are still trading above their 20 and 100 day moving average as the bull market still continues in my opinion and the scary thing is the high volatility is underway and will even increase in the next several months on weather concerns. The November soybeans which is considered the new crop which will be harvested this October finished down 2 cents at 12.22 finishing down about $.22 in the last couple of trading sessions as the selloff was contributed to spreading old crop versus new crop as prices are trading below their 20 day and above their 100 day moving average as prices may have topped out. If you took my original recommendation in the November contract I would place my stop at the 10 day low which is at 12.10 which is only $.12 away or $600 risk per contract as this trade has been very strong in recent months and remember I do not use stops on night sessions.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Cotton Futures
Cotton futures are trading above their 20 and 100 day moving average and I’m still recommending a long position as prices closed last Friday at 92.35 and going out this afternoon at 94.40 as I do think a possible retest of the March 26th contract high of 96.76 will be tested in next week’s trade as the cotton chart has excellent chart structure and if you buy even at today’s price of 94.40 place your stop loss at 90.73 risking around $1,900 per contract as that’s the 2 week low as this chart continues to grind higher with low volatility. Many of the agricultural markets have been in bullish trends and I do think there’s a possibility that front month cotton could trade over 100 in the next month but make sure you do have a risk management plan in place in case prices fall out of bed just like what happened in the soybean market yesterday so keep your stop at the 2 week low as that will start to be raised up next week as well.
TREND: LOWER
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
Corn Futures
Corn futures in the December contract finished lower for the 3rd consecutive trading session closing around 4.93 a bushel losing $.14 this week on renewed optimism about farmers getting the crop in this week as the weather should remain warm and dry as prices remain choppy. If you’ve been following any of my previous blogs I have been recommending to sit on the sidelines in corn for several weeks after being stopped out at the 10 day low which was around $5 earlier in the month and wait for a better trend to develop. Overall I’m still bullish the grain market and I do think corn prices are going higher however I’m going to wait for a trend to develop as there is major support at the 2 week low of 4.88 down to 4.80 as we are starting to enter the high volatility season. I live in the Chicago suburbs where there’s a lot of corn fields and I have seen 0% planted and I talk to many farmers in Iowa which at this time last year they had 100% of their crop planted and presently have 0% planted and in my opinion I would be looking at buying weakness because the weather market has just begun. Corn futures are trading below their 20 but above their 100 day moving average which tells you that the trend is mixed and I like to follow markets that are trending because choppy markets are very difficult to make money.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Cocoa Futures
Cocoa futures settled last Friday at 2953 going out on a weak note as prices are currently trading around 29.17 and in my opinion it looks to me that this market possibly has topped out as I’ve been telling traders to keep an eye on cocoa for a very long time and currently prices are below their 20 but above their 100 day moving average as prices are at an 8 week low and my recommendation would be to sell in the July contract at 2894 while placing my stop above the recent high of 3040 risking around $1,500 per contract as the consolidation is extremely tight allowing you to place tight stops minimizing monetary losses. Cocoa has been in a bullish trend for quite some time but over the last 4 months has stalled up at the 3000 level so if prices do break down it could be a powerful move to the downside as my theory states the longer the consolidation the larger the breakout.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Natural Gas Futures
Natural gas futures in the June contract finished lower for the 3rd consecutive trading session finishing higher by 3 points for the trading week to close around 4.69 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 20 points or $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 Add To Your Winning Trade? This has always been a very interesting question because it can create a situation of going from rags to riches or from riches to rags in a very short amount of time. Many times I see traders abuse pyramiding or adding to positions with utter lack of any type of money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse. Commodity prices can move very quickly with large gains or loses like we experienced in the 2008 crash of stock and commodity prices, so you always have to use stops and not fall in love or marry a position. In my opinion the answer to this question is add only once to the trade if that position has made you at least 2%-3% of your account balance while still having stop losses on all positions that equal 2% loss at a maximum risk. Remember your stop loses will be different on both positions because of the fact that you entered those trades at a different date and price.
There are many different theories about how long does a meaningful consolidation have to last before you enter a trade on the breakout to the up or downside? In my opinion I always want to see a consolidation that lasts at least 8 or more weeks before I would consider entering. The reason that I want a longer consolidation is to try and avoid a bunch of false breakouts such as a 10 or 15 day consolidations which happen all the time, so I am trying to put the odds in my favor by trading the breakout of at least 8 weeks or more and the longer such as a 11 or 13 week consolidation the better. At this present time cocoa is in a major consolidation.
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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