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 basically finished unchanged for the trading week with very little volatility trading at 1,319 still right near a 3 month high and if your currently bullish this market I would buy a futures contract at today’s price while placing my stop below the 2 week low which currently stands at 1,260 risking around $6,000 per contract, however that chart structure will improve dramatically in the next couple of days as volatility has really slowed down as we enter the Fourth of July holiday weekend. I am currently sitting on the sidelines in this market as I’m waiting for better chart structure to develop which is already currently happening and if you’re looking to get short this market I would sell at today’s price while placing your stop above today’s high of 1,325 an ounce risking around $600 per contract as if prices break that level to the upside I would have to think the trend has definitely turned bullish. Gold futures are trading above their 20 and 100 day moving average as the chaos in Iraq is certainly propelling prices in recent weeks as gold had a bearish trend for quite some time actually hitting 1,240 earlier in the month so I’m not totally convinced where prices are going to and that’s why I’m sitting on the sidelines.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Silver Futures
Silver futures had a very quiet trading week finishing up about $.10 closing at 21.14 an ounce still near a 3 month high and I’ve been recommending a long the silver position for a long time and volatility has really slowed down after a large break out occurring last week so at this point I would play the 10 day rule which currently stands at 19.50 which is still $1.63 away or around $8000 as the chart structure will tighten up considerably in a couple of days. The problem with silver in my opinion is that it’s too cheap and now with the Iraqi situation completely collapsing I think silver is a bargain at today’s price especially with crude oil hitting $107 and many of the other commodity markets much higher in 2014 so if you’re not currently in this market wait for a dip but continue to play this to the upside as prices are still trading above their 20 and 100 day moving average telling you that the trend is higher and this sleeping giant will wake up one day and if this craziness continues in the Mideast silver is going to be difficult to selloff.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Crude Oil Futures
Crude oil futures in the August contract finished down about $.75 for the trading week currently at 105.75 consolidating with very little volatility in the last 2 weeks and if your long this market as I’ve been recommending a long position when prices broke above 104 I would place my stop below the 10 day low which was hit yesterday at 105.03 risking around $.75 or $750 per contract. Crude oil futures are trading above their 20 and 100 day moving average telling you that the trend is higher however prices have stalled recently but I’m certainly not bearish this market as I think the Iraqi problem is here to stay for years to come and I believe this could possibly spread to other countries, however as a trader I must have an exit strategy and I will continue to place my stop at the 2 week low and if I your executed on that sit on the sidelines and wait for another trend to develop.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures in the November contract considered the new crop finished down about $.17 this Friday afternoon closing around 12.27 also finishing lower by only $.05 for the trading week as prices basically are consolidating in recent weeks as flooding concerns especially in the state of Iowa have sent prices to 3 week highs before profit taking sent prices right back into the channel today. I’ve been recommending a short position for many weeks now and this trade has been going sideways and I still continue to believe that the rain will stop and the soybean plants will kick into high year as they are a very resilient crop as the 7 day forecast is hot and humid with rain and if you look at the corn crop here in Illinois it looks absolutely outstanding and I think eventually that’s going to happen to the soybean crop as the key level is $12 and if that level is broken you will start to see the funds get short and that’s when I believe the bear market starts and that could happen over the critical Fourth of July weekend. Soybean futures are trading just a hair above their 20 day and slightly above their 100 day moving average as the trend currently is mixed but if you’re looking to get short this market and you think the excellent weather will continue then sell at today’s price while placing your stop above the contract high at 12.80 risking around $.55 or $2,200 per contract as traders await Monday’s USDA supply demand and planting report figures.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Wheat Futures
Wheat futures in the December contract Chicago finished up $.08 this Friday afternoon after hitting 5 month lows earlier in the trading week as excellent growing conditions with a possible record crop sending prices down about $1.80 in the last 2 months as this has been one of the best bear markets out of all of the commodities and if you are still short this market I would place my stop above the 10 day high which currently stands at 6.26 a bushel and with currently trading at 6.12 which is risking about $.14 or $700 per contract. The southern part of the United States received much needed rain right at a critical time I would still play this market to the downside but the major move has already been made in my opinion and if you’re not in wheat currently I would sit on the sidelines and wait for a consolidation to develop because the chart pattern is straight down and it would not surprise me if prices consolidated especially in the month of July which has high volatility due to weather concerns. Many of the agricultural markets have been going down including corn, wheat, and cotton which hit 2 year low as well as we are experiencing excellent growing conditions as we’ve had several poor growing years consecutive and we are due for a solid crop and currently everything looks very solid good for some isolated flooding.
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 are still trading below their 20 and 100 day moving average finishing the week slightly lower as prices have been consolidating in recent weeks and I have been recommending a short position when prices broke out at 4.87 a bushel in early May and if you took that recommendation I would still place my stop above the 10 day high which is around 4.56 a bushel which is only about $.09 away from today’s price or $400 per contract as the chart structure is outstanding at the current time. There are concerns of flooding especially in the state of Iowa and I talk to many farmers throughout the day and that is a real concern especially in soybeans as that was planted later so that crop looks poor currently but the corn still is behaving relatively well and if this weather continues in the next couple of weeks I would have to think that it’s going to be very difficult to have a bull market in corn. Traders await Monday’s USDA crop report which will show supply demand tables plus planted acreage which was estimated at 91.7 million acres as the whisper number is around 89 million so that will keep traders on edge and if that report is bearish I would have to think corn prices could break $4 here in the next couple of weeks.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee futures reversed earlier gains hitting a 4 week high right near the 185 level only to fall out of bed finishing down nearly 900 points at 172 a pound and a very surprising move in my opinion as I’ve been recommending a long position in coffee futures placing your stop below the 10 day low which currently stands at 166.55 about 600 points away at $2,400 per risk per contract. The volatility is starting to come back into this market as crop estimates are starting to surface as one day showing less production and the next day showing more produce as prices are still in a sideways channel and I still believe that prices are bottoming as coffee prices are down about 22% from the contract high which was just hit a couple of months ago. One interesting thing about coffee prices currently is the spread between the 20 and 100 day moving average which is very tight as the 20 days currently trading at 174 a pound while the 100 day moving averages is at 185 and that tells me there’s going to be a breakout soon because generally the distance between coffees 20 and 100 day moving average is much wider.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
S&P 500 Futures
The S&P 500 finished down around 3 points for the trading week despite the fact that the 1st quarter GDP was revised to a negative -2.9% that is the 1st time in a non-recessionary year that has happened since 1952 and that just shows you how sluggish the economy is and you would think that would selloff the stock market, however you would be wrong as stocks are right near session highs once again due to the fact that investors realize low interest rates are here to stay. The great thing about the stock market currently is bad news equals good news and good news equals even better news as the bullish trend continues as there’s no other game in town so continue to buy on dips in this market as 2000 is coming in my opinion very soon as this market is extremely resilient. If you think about it we have complete chaos in Iraq and one of the worst GDP numbers in over a generation and what happened the stock market does not sell off so what it’s going to take to get a selloff in the S&P 500 and my answer is you need poor earnings and I don’t think that’s on the horizon so continue to play this market to the upside as 2014 will be another solid percentage gain in my opinion.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Feeder Cattle Futures
Feeder cattle futures hit all-time highs once again finishing up nearly 800 points for the trading week to close at 214.52 a pound and if you been reading any of my previous blogs I was telling people to take profits if you had multiple contracts on while maintaining the 10 day low stop on the other contracts as prices just look to go higher in my opinion as the 10 day low currently stands at 205 a pound. Corn prices were finished up 4 cents today but it’s clear that the trend in corn is to the downside so my next target in feeder cattle is 220 a pound as this is a remarkable run as were going into heavy demand season with the lowest herds in 60 years as the fundamentals in this market are as strong as I’ve ever seen in any market I’ve covered over the last 20 years.
Live cattle futures also hit all-time highs in the August contract finishing up 500 points for the trading week despite selling off 140 points this Friday afternoon trading at 151.35 as this market continues to move higher so continue to place your stop at 10 day low which is at 144 a pound and that will tighten up considerably in the next couple of days as I look for the possibility that live cattle futures trade as high as 160 in coming weeks as the bull market seems to be getting stronger at the current time. The only thing I think that could stall cattle prices would be if corn rallied sharply due to some weather event but currently the weather in the Midwest is outstanding while the retail consumer is still willing to pay ridiculous prices at the store and until that stops happening look for higher prices ahead but continue to place your stop at the 10 day low because one of these days the trend will change.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Sugar Futures
Sugar futures settled last Friday at 18.75 while going out today around 18.30 losing around 40 points this week as prices are still trading above their 20 &100 day moving average but they have petered out up here at the 18.80 – 19.00 level as that price has been hit many times in the last 4 months and has failed every single occasion. I have been recommending to sit on the sidelines in this market as the chart structure is very poor and I don’t believe prices will break 19 a pound but if they do then the bull market is underway but until that happens stay on the sidelines and wait for a better trend to develop as choppiness is a traders worst friend.
TREND: LOWER
CHART STRUCTURE: POOR
Cotton Futures
Cotton futures in the December contract which is considered the new crop settled last Friday at 77.08 while going out this Friday afternoon in New York at 74.75 selling off 250 points this week hitting a 2 year low as the trend remains bearish. As I’ve talked about in previous blogs if you were short this market last week the 10 day high was 78 when prices were trading at 77 with the risk of about $500 as this trade has paid off and continue to keep your stop at the 2 week high which remains at 78 risking around 325 points or $1,700 as the trend continues to move lower due to the fact of outstanding weather in southern part of the United States which could produce another record crop. Also with carryover levels right near all-time highs as well as there are very few bullish fundamentals in this market so continue to play it to the downside in my opinion and if you look at many of the agricultural commodities like corn, wheat, and cotton which all continue to move lower.
TREND: LOWER
CHART STRUCTURE: AWFUL
Orange Juice Futures
Orange juice futures in the September contract settled last Friday at 161.65 and are going out today at 140.50 falling out of bed and if you took my recommendation which I talked about earlier in the week selling at 161 while placing your stop at 168 which was the contract high risking around $1,000 dollars this trade has paid off relatively well and at this time due to the fact that it has absolutely terrible chart structure I would take profits and move on and look for another market. I’m very surprised that prices dropped that dramatically as I do believe eventually orange juice prices will rally once again so keep an eye on this market and wait for better chart structure to develop allowing you place your stop loss much tighter allowing a 2% risk on any given trade of your account balance. Orange juice futures are trading below their 20 and 100 day moving average but I don’t like markets that go straight down because then the possibility of coming straight back up happens quite a bit just look at the rough rice chart and just keep an eye on this market at the current time.
TREND: LOWER
CHART STRUCTURE: AWFUL
Cocoa Futures
Cocoa futures in the September contract finished up 82 points this afternoon while trading above their 20 and 100 day moving average hitting a 3 year high with excellent chart structure currently trading at 3135 breaking out of a 3 week consolidation. I currently am recommending a long position in cocoa at today’s price of 3135 while placing your stop below the 10 day low which currently stands at 3049 risking around 85 points or $850 per contract as the consolidation recently was very tight allowing you to place tight stops so continue to play this market to the upside as the trend has been choppy in recent months but one of these breakouts will be real and if you’re only risking $850 I think the risk reward situation is highly in your favor.
TREND: HIGHER
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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