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 went out on a sour note this shortened holiday trading session down $12 at 1,318 reacting negative to the U.S jobs report which came out at 288,000 new jobs as the economy is improving as the S&P 500 hit all-time highs once again today as the money flow is coming out of gold and into equities and that has been this precious metals problem for quite some time as there is not a lot of demand for gold currently. I am sitting on the sidelines in this market but I have a couple of trading recommendations if you are bullish gold and think prices will continue to move higher buy at today’s price of 1,318 place your stop below the 10 day low of 1,305 risking $1,300 per contract and if you’re bearish gold and think that its finally topped out you would sell at today’s price while placing your stop above Tuesday’s high of 1,335 risking $17 or $1,700 per contract as the chart structure has become very tight in the last 2 weeks. As I’ve talked about in previous blogs I do believe the stock market will continue to move higher and I believe that gold here in the short term still looks negative in my opinion unless something crazy comes out of Iraq.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Silver Futures
Silver futures in the September contract finished basically unchanged for the trading week closing around 21.16 an ounce and finishing lower this Thursday afternoon by 13 cents to close around 21.13 an ounce still trading near a 3 ½ month high as the trend continues to the upside and if you took my recommendation and went long at 20.02 which happened 2 weeks ago continue to place your stop which now stands at 20.63 which is the 2 week low entering tomorrow’s trade as the chart structure has tightened up considerably. The next major level of resistance is around $22 as gold, copper, and silver have all come to life in recent weeks while many of the other commodities have started to sell off as the volatility in silver is very small currently after having an 80 cent move 2 weeks back but now we are having 5/$.10 moves on a daily basis but in my opinion continue to play this to the upside making sure that you place your stop at the 2 week low which is only risking about $.60 or $3,000 per contract and that stop will tighten up to 20.76 on Mondays trade minimizing your risk even more and that’s what excellent chart structure does. Silver has rallied in recent weeks due to the fact of chaos in Iraq, however as I’ve written for many months in previous blogs I thought silver prices were just too cheap compared to the rest the commodity and stock markets so I still believe this market has more legs to the upside.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Crude Oil Futures
Crude oil futures in the August contract are trading below their 20 but still above their 100 day moving average as prices have fizzled out here in recent weeks and I was recommending a bullish position when crude oil broke above 104 but this trade just did not develop as the news out of Iraq now is in the background sending prices lower for the 3rd consecutive trading session closing around 103.77 in New York finishing down $.71. At the current time I’m sitting on the sidelines in crude oil as there is no trend but the chart structure is improving on a daily basis so I will keep an eye on this market so look for a stronger trend in a different market to trade currently. Crude oil does have some bullish fundamentals with craziness going on in Iraq and the fact that economies around the world are improving especially here in the United States with the unemployment number coming out adding another 288,000 jobs as high gas prices are here to stay in my opinion, but as a trader I have to look for a breakout to enter or exit while right now the trend is neutral.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybeans futures in the November contract plummeted this week in Chicago finishing down about $1.10 all due to the USDA crop report which stated that nearly 85 million acres were planted sending prices down $.70 on Monday afternoon and now is trading lower for the 5th consecutive trading session. Soybean futures are trading far below their 20 and 100 day moving average and if you were reading any of my previous blogs I have been recommending to be short soybeans for quite some time and this trade has worked out very well also because the weather here in the Midwest is doing very well with mild temperatures and abundant rain as the corn stalks are already 5 feet tall as it is unlikely we will have a drought in 2014. I talked about the possibilities of back to back to back poor growing seasons and that is very rare and has not happened since the dust bowls of the 1930s and that is why I was extremely bearish soybeans because of the acres and I thought we would have an excellent growing season but is still early and in 1983 we did have a drought which started in late July sending prices from $6.00 to $10 very quickly; however there is just so much moisture in the ground currently I just don’t think it’s in the cards so continue to play this to the downside.
TREND: LOWER
CHART STRUCTURE: AWFUL
Wheat Futures
Wheat futures are trading higher for the 2nd consecutive trading session in the December contract currently trading at 6.05 a bushel up about $.06 this Thursday afternoon, however prices still look to finish about $.08 lower for the trading week as this market has really collapsed in the last 2 months all due to the fact that the southern plains received hefty rains during the critical growing season sending prices sharply lower and I still think there’s a possibility that the contract low of 5.80 which was hit in late January will be broken. The one interesting thing that did happen this week was the oat market rallied sharply up around 25 cents and is hitting new 3 month highs and I think that has been supportive to the wheat futures as well but the grain market is in a secular bearish trend and if you are short continue to place your stop above the 10 day high of 6.25 risking around $.20 or $1,000 per contract as prices are still trading below their 20 and 100 day moving averages telling you that the trend remains weak.
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 settled last Friday at 4.47 going out this afternoon at 4.15 down $.32 plummeting more than $.22 on Mondays USDA crop report which really shows no bullish fundamentals for this commodity at the current time and I’ve been recommending a short position from early May and I believe prices will break $4 here in the next couple of weeks as the crop here in Illinois is the greatest I’ve ever seen as corn stocks are 5 feet tall and green and lush. The problem with the grain market currently is the fact that supplies or carryover levels are going to balloon higher than previous years and that could send prices even lower from today’s price levels and remember in 2010 corn prices broke $3 a bushel for a very short time and then rallied tremendously but people have a short memory because that could happen again and if you are short continue to stay short while placing your stop above the 10 day high which currently is at 4.56 a bushel or about $.40 away or 2,000 per contract. The chart structure will start to improve on a daily basis as I think there’s a high probability that corn prices will trade under $3.50 come harvest time this October.
TREND: LOWER
CHART STRUCTURE: AWFUL
Coffee Futures
Coffee futures in the September contract settled this Thursday afternoon in New York around 171.80 basically unchanged for the trading week as volatility has really slowed down as prices remain in a 4 week tight consolidation looking to breakout and I been recommending a long position while placing your stop below the 4 month low which is also the 10 day low at 165.70 risking around 500 points from today’s price levels or $2,000 per contract. I still believe in the long run coffee prices are headed higher, however it is consolidating the giant move up in early 2014 due to the Brazilian drought, as prices are looking for fresh fundamental news to dictate short-term price action as estimates of the Brazilian crop are coming out very slow but volatility in my opinion will pick up tremendously in the next couple of weeks. Coffee prices are trading below their 20 and 100 day moving average as the trend currently is lower to mixed.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
S&P 500 Futures
The S&P 500 futures contract hit an all-time high once again settling last Friday at 1952 currently going out this holiday shortened trading week at 1977 up another 25 points as I do believe 2000 will be cracked here in the next couple of weeks and if you been reading any of my previous blogs for months I’ve been extremely bullish the stock market and I do believe prices continue to move higher due to the fact of an improving economy with corporations that have amazing amounts of cash on the sidelines while buying back shares and increasing dividends this market looks to move much higher in my opinion. I have talked about this in many previous blogs as I think the year 2014 will see 12% – 14% gains come Christmas time as there’s no other game in town especially with high quality stocks paying 3%-4% dividend yield when you’re earning 0 in the bank therefore creating a demand market and that’s why prices are going higher. The S&P 500 is trading far above its 20 and 100 day moving average telling you that trend is strong to the upside and if you’re still in a futures contract I would place my stop at the 10 day low which is 1938 and continue to buy dips in my opinion.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Feeder Cattle Futures
Feeder Cattle futures in the August contract continued their remarkable bullish run finishing higher once again this Thursday afternoon closing right around 218.00 a pound hitting new all-time highs as I was recommending traders to offset some of their long positions at 208 and then maintaining the 10 day low stop on the remaining contracts which now stands at 208.55 which is still 1000 points away or $5,000 risk per contract as the chart basically has gone straight up in the last couple of months. I’m highly recommending not to be short this market and if you have not been participating in the cattle market I would sit on the sidelines and wait for a better chart pattern to develop as picking a top is extremely dangerous and difficult to do as the trend is your friend and this trend has been remarkable over the last several years.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Live Cattle Futures
Live cattle futures in the August contract are trading limit up in Chicago this Thursday afternoon up 300 points which is the maximum daily move closing around 155.25 a pound hitting all-time highs once again as the cattle markets are absolutely on fire due to the fact that we have the lowest herds in 63 years which was reported by the USDA sending prices to unheard-of levels as we enter the Fourth of July weekend as the consumer continues to pay high prices and until that stops this market still looks to go higher in my opinion. Cattle futures are trading far above their 20 and 100 day moving average telling you that the trend is incredibly strong to the upside and if you are still long the futures contract I would place my stop at the 10 day low which is around 147 or 800 points away or $3,200 risk per contract as the livestock markets have been the best bull markets of 2014.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Sugar Futures
Sugar futures in the October contract are trading below their 20 and 100 day moving average and has been an extremely choppy market in recent months as prices have traded between 17.50 – 19 with many straight up moves and then straight down moves and I’m still sitting on the sidelines waiting for better chart pattern to develop. If sugar prices break 4 month lows around 17.45 then I would be recommending a short position while placing your stop above the 10 day high which will be 18.80 as it looks to me that sugar prices are headed lower but I will wait for a breakout before entering. Prices had a very difficult time crossing the 18.80 level which was hit 2 weeks ago but unable to go into further as that price was hit about 6 or 7 different times over the last 4 months so now prices are retesting the bottom end of the trading range and if that is broken the bear market is underway in my opinion.
TREND: MIXED
CHART STRUCTURE: POOR
Cotton Futures
Cotton futures in the December contract are closing out this Thursday afternoon at 72.40 basically unchanged for the trading day finishing down about 250 points for the week as the bearish trend continues as excellent growing conditions in the southern part of the United States is producing a possible record crop also with record inventories as many of the agricultural commodities have very bearish fundamentals. If you are still short make sure you place your stop at 78.00 which is the 2 week high however that will be lowered significantly in the next couple of days but remain short as there’s a possibility cotton prices trade into the low 60s come harvest time as prices are trading far below their 20 and 100 day moving average as prices have basically fallen out of bed in the last 2 months as in early May prices traded as high as 85.00 and now dropped nearly 1300 points as the USDA crop report on Monday stating a slight increase in acres therefore increasing supply therefore putting pressure on prices here in the short term.
TREND: LOWER
CHART STRUCTURE: POOR
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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