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 in the August contract traded in a very tight and narrow trading range this week going out last Friday at 1,246 and settling this Friday at 1,251 up about $5 for the week, however I’m still recommending a short position when prices broke below 1,267 placing your stop loss above the 10 day high which currently stands at 1,290 risking around $40 or $4,000 per contract from today’s price levels. Gold futures are trading below their 20 and 100 day moving average telling you that trend is lower as major support is at 1,240 and if that level is broken I would think you have to retest 1,200 as the same old story continues with the S&P 500 hitting all-time highs once again as money is coming out of the gold sector into equities and I think that trend is going to continue especially with low interest rates staying around for quite some time. At the current time there are no geopolitical events that one must rush into the gold market with the stock market continuing its trend higher it’s difficult for gold to rally at this time so I do see lower prices ahead but make sure you do place your stop loss at the 2 week high in case the trend does change as an investor or trader you always must have an exit strategy.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Silver Futures
Silver futures in the July contract finished down $.10 this Friday afternoon closing right around 18.99 an ounce still unable to penetrate the spike bottom which was created at 18.65 as volatility has really slowed down in this market as currently there is just a lack of interest in the precious metals. Silver futures are trading below their 20 and 100 day moving average and I’ve been recommending if you have deep pockets to buy silver at these relatively cheap levels, however this market has just gone nowhere for some time now and I’m running out of patience but I still recommend if you have a 3 to 5 year horizon I would be nibbling at today’s price levels. The silver market historically is extremely volatile as I’ve been trading commodities for over 20 years and this is the least volatile I can remember silver as every day is .5 or $.10 cents and in the old days it would be $.50 to a $1.00 and possibly even more and that will happen again it’s just a matter of time but the true breakout to the upside doesn’t occur until prices trade above 20.00 an ounce which is only a dollar away and that could happen quickly on any given day.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Crude Oil Futures
Crude oil futures traded in a very tight range this week going out this Friday at 102.70 finishing slightly higher as the volatility is extremely low at the current time as I’m sitting on the sidelines in this market as I do think prices are headed higher but the trend is very weak and I must find another market that is trending stronger. If you look at the chart over the last 6 months longer term it’s still in a bullish trend with the possibility of retesting last Augusts high during the Syrian crisis around 110/112 a barrel as economies around the world are improving and this is supporting the crude oil market with the S&P 500 at all-time highs once again today as the United States added 217,000 new jobs which are all supporting crude oil prices so I’d be looking at buying on dips rather than selling on rallies.
If you’re looking to get into this market one recommendation would be if your bullish crude oil prices & think that prices bottomed in yesterday’s trade I would buy today at 102.70 while placing my stop below yesterday’s low which is also the 10 day low at 101.70 risking $1,000 per contract and if you’re looking to get short this market my recommendation would be to sell today’s price while placing my stop above the 10 day high which is 104.20 risking around $1,500 per contract as the chart structure is excellent because of low volatility.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Orange Juice Futures
Orange juice futures are slightly lower this Friday afternoon settling last Friday at 159.40 going out today around 163.40 up 400 points for the trading week as many of the soft commodities have been going lower but orange juice and cocoa are bucking the trend to the upside due to the fact of greening disease here in the United States is keeping orange juice prices high. The chart structure currently is poor so I’m sitting on the sidelines waiting for a trend to develop, however the short term trend is higher as prices are trading above their 20 and 100 day moving average as traders are also keeping an eye on next week’s USDA crop report as I would like to see better chart structure minimizing your risk to develop here in the short term as prices have been stagnant in recent weeks.
TREND: HIGHER
CHART STRUCTURE: POOR
Coffee Futures
Coffee futures in the September contract are up 300 points this Friday afternoon in New York currently trading at 174.60 still trading below its 20 and 100 day moving average with relatively low volatility with major support right at the 170 level which is been hit on 6 different occasions and bounces off every single time as traders are awaiting estimates on the Brazilian crop currently being harvested and that will certainly send high volatility back into this market. Coffee prices settled last Friday at 180 finishing down around 500 points for the week continuing its short-term down trend and I’ve been sitting on the sidelines waiting for a buying opportunity around the 165 level as I do think prices to the downside are limited as I still have many contacts in Brazil telling me that they think 43 million bags is on the high estimate but only time will tell so keep a close eye on this market as the sleeping giant will wake once again in my opinion.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Soybean Futures
Soybean futures in the November contract finished down 13 cents for the week but finished higher by 8 cents this Friday afternoon bucking the recent bearish trend trading at 12.19 a bushel hitting a 8 week low in yesterday’s trade as traders keep a close eye on this weekend’s weather and I continue to remain bearish the grain market as excellent weather across the Midwest is pressuring prices and I’m still recommending a short position in the new crop beans and if you’re a farmer I would definitely be hedging some of your crop because if 3.6 billion is produced in October rest assured lower prices are ahead. Soybean futures are trading below their 20 day but still above their 100 day moving average which stands at 11.84 and I do believe that level will be tested in the next couple of days as corn prices continue to plummet this week and I do believe soybeans will catch up so continue to sell on any rally while placing your stop above the 10 day high which is 12.80 bushel. As I’ve stated in many previous blogs it’s very rare to have 3 consecutive poor crops as it has not happened since the dust bowls of the 1930s as 2012 and 13 both producing below average crops due to hot & dry weather but I think in 2014 the odds favor a record crop this year due to the fact that we planted 81.5 million acres. I consider today’s rally to be short covering over the weekend as the trend still remains bearish in my opinion as traders are looking forward to next week’s USDA crop report which should send high volatility back into this market.
TREND: LOWER
CHART STRUCTURE: POOR
Cotton Futures
Cotton futures settled last Friday at 86.27 while going out today around the 84.90 level down over 130 points this week while still trading beneath its 20 and 100 day moving average as excellent weather in the southern part United States is pressuring prices currently. The chart structure in cotton is excellent as I’ve been recommending a short position when prices broke out below 89.87 and currently I’m placing my stop above Wednesdays high which is also the 10 day high at 88.60 risking around 230 points or $1,150 per contract as cotton traded lower for the 3rd consecutive trading day. Traders are keeping an eye on weather and the USDA crop report which comes out next week which should send high volatility in this market but I do think a possible retest of the spike low of 84.00 will be tested here in the next couple of days and if that is broken you could see 80.00 in my opinion as a bearish trend is still intact as long as prices stay below 88.60 in the July contract.
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 rallied sharply this Friday afternoon finishing up 10 cents at 4.58 a bushel breaking a 3 day losing streak and finishing unchanged for the trading week hitting a 4 month low yesterday as prices have absolutely collapsed coming all the way in early May when prices hit $5.15 to today’s level with major support at 4.45 a bushel and if that level is broken you probably are looking at hitting contract lows which happened on June 10th at 4.35 a bushel as this market remains bearish.
As I’ve talked about in many previous blogs corn has many bearish fundamentals including record crops and lower demand due to lower cattle herds as the weather remains outstanding here in the Midwest as corn is off to an excellent start early in the growing season. If you took my recommendation and went short at 4.87 I would still place my stop loss at 10 day high which stands at 4.80 which is around $.23 away or $1,150 per contract as the chart structure is very poor currently because prices have plummeted but the chart structure will improve in the next couple of days as I still think corn will retest contract lows.
Corn futures are trading far below 20 and 100 day moving average telling you that trend is lower as prices currently are oversold so it would not surprise me to see some type of consolidation develop. Traders are keeping a close eye on next week’s USDA ending stocks report as the trade estimate is 1.164 billion bushels slightly higher than the previous report
TREND: LOWER
CHART STRUCTURE: POOR
Sugar Futures
Sugar futures in the July contract finished lower by 40 points for the trading week trading at 16.92 finishing up 9 points this Friday afternoon in New York and I’m still recommending a short position placing my stop above the 10 day high which currently stands around 17.60 as the chart structure has tightened up considerably in recent days. Sugar futures are trading far below their 20 and 100 day moving average hitting a 3 ½ month low today as the next major support is down at the 16 level in my opinion. Remember the fact that sugar prices were in a big bear market all the way until late January when prices bottomed out around the 15.20 level rallying all the way up 18.60 due to the fact that there was a drought in central Brazil but production doesn’t seem to have been cut as much as expected therefore prices are headed back down here in the short term but make sure that you have the proper amount of contracts on minimizing your risk to 2% of your account balance.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
S&P 500 Futures
The S&P 500 continues its bullish momentum trading up another 8 points at 1947 and I continue to harp on the fact that this market is going higher due to several bullish fundamental reasons including stock buybacks, increasing dividends, a Federal government that want higher equity prices while maintaining extremely low interest rates so this is the perfect storm to the upside in the S&P 500 continuing its bullish trend to the upside. S&P 500 futures contract is trading far above its 20 & 100 day moving average with outstanding chart structure I’ve been recommending buying this market for quite some time and I still believe that prices will move higher as this Monday morning as Apple Computer will split 7 to 1 and I think that will bring even more buying pushing this market higher once again as I think 2000 is in the cards in the S&P in the next couple of months and I do believe that the NASDAQ 100 will hit all-time highs breaking above 5000 this year so continue to play this to the upside and if you’re lucky enough to get any type of dip take advantage while placing your stop below the 10 day low of 1880.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Feeder Cattle Futures
Feeder cattle futures in the August contract were up for the 8th consecutive trading session hitting all-time highs settling up over 400 points for the trading week closing at 200.80 a pound in the August contract as the fundamentals are extremely strong in this market and I still believe higher prices are ahead due to the fact that there are very limited supplies at the current moment as my next level is 2.10/2.20 which is an unbelievable price as the trend seems to get stronger and stronger on a daily basis. Live cattle in the August contract also hit all-time highs today finishing up 60 points at 141.95 a pound and I continue to recommend being long the live and feeder cattle markets as a top has not been created in my opinion. Feeder cattle prices are trading far above their 20 and 100 day moving average as this has been the strongest trend out of all of the commodities in the last several years and I think you will be shocked when you go to the grocery store to see how much a steak goes for a pound as I paid around $14 a pound for choice steak in the Chicagoland area.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
TRADING RULES
1 — If you follow this rule you will have a chance of being successful over the course of time, if you don’t follow this rule you will be sure to lose your money quickly. This rule is simple Do Not OVERTRADE EVER for this is an easy way to lose all your capital quickly. My definition of over trading is risking too much money on any given trade, for example if you are trading a $100,000 dollar account and you place a gold trade today you should limit your loses to 2% of the account value which in this case is $2,000 which allows you to be wrong on many trades and still be around to play another day. In futures and option trading you will have losing trades that is for certain so make sure you manage those losses and move on to another trade.
2 — Trade with the short term trend, as the saying goes in futures trading the trend is your friend. Sometimes you will be a market that is trending higher and then has a false breakout to the upside and then suddenly sells off causing you a 2% loss on your equity and you say to yourself that was a bad trade and should I do something different on my next trade. If it was up to me I would continue to buy strength and sell weakness because in the long run commodity trading is about percentages of success in the long run, and if you go with the path of least resistance more often than not you will have the probabilities of success on your side. I define a trend as a commodity hitting a 20 day high or low as a trendy market, if the market is in a consolidation stay away from it and find something that is trending up or down and go in that direction remembering the money management rules of 2% maximum loss if you are wrong.
3 — This rule is extremely important and I witness it being abused constantly creating tremendous loses that are sometimes difficult to come back from. Never add to a losing position because if the position continues to go against you and now you have added even more contracts which are all losing money your account will suffer loses much more than 2% and in some case adding positions and never getting out of a losing trade has wiped peoples trading accounts down to zero because of 1 or 2 bad trades. Remember always play for another day you will have losing trades and the good traders manage losses and move on to the next possible 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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