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.
Silver Futures
Silver futures in the September contract rallied $.35 cents this week as tensions between Israel and Hamas have sent prices to 4 month highs at 21.48 with the next major resistance at $22 as I’ve been recommending a long position when prices hit a 4 week high breaking above 20.02 about 3 weeks ago so continue to place a stop below the 10 day low as the chart structure is outstanding as that level currently stands at 20.82 risking around $.70 or $3,500 per contract at these price levels. Silver has been going higher in recent weeks as this commodity has solid demand due to electronics and many other products that currently use silver and if you’ve been following any of my previous blogs for the last several months I thought prices were extremely cheap especially compared to the rest of the commodity markets so continue to be long while placing your stop at the 2 week low as prices are trading above their 20 and 100 day moving average telling you that the trend remains higher.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Crude Oil Futures
Crude oil futures in the August contract are down $1.00 at 101.93 a barrel and I am currently recommending a short position as prices have hit a 4 week low while placing your stop at the 2 week high of 106.10 risking around $4,000 from today’s price levels as the commodity markets in general have turned extremely bearish as deflation is a short term concern as prices are trading below their 20 day but still above their 100 day moving average telling you the trend is mixed as the chart structure will improve on a daily basis so I remain bearish. Problems in Iraq have basically gone on the back burner and not talked about as much as it was a couple weeks back when prices hit new highs at 107 as prices are down over $2 for the trading week with the next major support around 101 and if that level is broken I think you could trade between 96 – 98 here in the short term. Crude oil prices have rallied from $90 in January all the way up to 107 as many of the commodity markets rallied early in 2014 but that has changed in recent weeks as many of the agricultural markets have absolutely plunged as I think that will start to pressure crude oil prices also due to the fact that the Federal Reserve is cutting back on the quantitative easing which is bearish commodities.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Soybean Futures
Soybean futures in the November contract are plunging once again as the WASDE report estimated a crop of 3.8 billion bushels up another 165 million bushels from the last report due to the fact that we have 84 million acres planted which is also a record high as the bushels per acre is estimated at 45.2 bushels per acre which was unchanged last month but the real story here is the carryover level which is ballooning to 415 million bushels which was raised 90 million bushels last month and if realized this would be the highest since 2006. I have been extremely bearish soybeans for a long time and I hope you took my recommendation on this trade as prices have fallen out of bed as I did take some profits around the 11.02 level while remaining with my other contracts playing the 10 day high as prices could go to $9 in my opinion as there is just an overwhelming of supply coming onto the market as corn prices are down another $.09 as the grain market as a whole remains extremely bearish, however if you are not currently short this market I would sit on the sidelines and wait for a better chart pattern to develop as you have missed the boat as prices have fallen 11 consecutive trading sessions.
TREND: LOWER
CHART STRUCTURE: AWFUL
Wheat Futures
Wheat futures in the December contract are plunging another 22 cents in the December contract as the crop report was construed negative with increasing supplies as prices have dropped 55 cents this week alone and I look for prices to break $5.00 soon as the bearish trend is getting stronger. Prices now have dropped $2.10 in the last 2 months and if you are still short this market I would place my stop at the 10 day high which is at 6.11 which is about $.60 away or $3,000 risk per contract at today’s price levels, however if you are not short this market I would sit on the sidelines as you have missed the boat. I talk to many farmers throughout the country and they tell me the same thing that their wheat crop is outstanding and they look for lower prices ahead. Wheat futures are trading far below their 20 and 100 day moving average telling you that the trend is lower as this stop will be lowered on a daily basis after tomorrow’s crop report so continue to play this to the downside as the grain market and the whole agricultural market have been collapsing in recent weeks. Wheat prices have fallen for the 5th consecutive trading session breaking the contract low of 5.77 earlier in the week with the next level of support all the way down to about 5.20 a bushel and I think that level will be tested in the next week or so as there is no reason to be bullish wheat at this time.
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 which is considered the new crop which will be harvested this October are plunging once again finishing down for the 10th straight trading session as the national average for the corn yield remains at a record 165.3 bushels per acre with the crop production around 13.9 million bushels which is still 65 million bushels below last year’s record but the market doesn’t believe this as prices continue to move lower and as I’ve talked about in many previous blogs I think 3.50 is the next level and if we plant as many acres next year corn and soybeans could be back to $2.50 and $7 in soybeans as to many acres and little demand are putting the grain markets in dire jeopardy of a giant secular bear market in my opinion. Remember the fact that corn also has very little demand due to the fact that we have the lowest herds in 63 years so this market absolutely has nothing going for it as prices are trading far below their 20 & 100 day moving average so continue to be short placing a stop above the 10 day high which currently stands at 4.47 a bushel and that stop will be lowered on a daily basis as the grain market has been excellent to the downside in 2014 and there’s more to go in my opinion.
TREND: LOWER
CHART STRUCTURE: AWFUL
Coffee Futures
Coffee futures in New York are down for the 2nd consecutive trading session currently trading at 160.25 in the September contract as I was recommending a long position from the low 170’s getting stopped out in yesterday’s trade as this market has turned short term bearish hitting a 5 month low finishing down around 900 points for the trading week as prices are trading below their 20 and 100 day moving average. Currently I’m sitting on the sidelines waiting for another buying opportunity to develop and I think prices could trade as low as 145 – 150 as there is major support in that area as production numbers are coming in a little higher than expected pushing prices lower as many of the agricultural markets have been getting slammed in recent weeks as the commodities as a whole have turned bearish. The chart structure in coffee is improving and if you’re looking to get short at today’s price I would place my stop above the 10 day high which is at 175.50 risking 1400 points or around $5,100 per contract.
TREND: LOWER
CHART STRUCTURE: IMPROVING
S&P 500 Futures
The S&P 500 futures contract sold off 18 points this week currently trading at 1960 in the September contract as nervousness over the situation with Israel and Hamas sent prices lower this week 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 1948 and continue to buy dips in my opinion.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Lean Hog Futures
Lean hog futures in the August contract finished up 80 points this Friday afternoon reversing sharp losses earlier in the trading session but still finished lower by 300 points for the trading week closing around 128.75 a pound and I will be recommending a short position if prices break 126 which is the 4 week low while then placing my stop above the contract high which is also the two-week high at 133 risking around 700 points or $2,800 per contract as the livestock sector may have topped out as feeder cattle prices finished limit down for the 2nd day also pressuring hog prices which are still right near all-time highs. As a trader I’m always looking to get into a trend & my definition of a trend is when prices hit a 4 week low or high while maintaining a proper stop loss of 2% of your account balance so keep a close eye on this market as we could be entering a short position in tomorrow’s trading session. The chart structure in the hog market over the last 6 weeks has been relatively tight as I do think there’s a high probability that a possible all-time top has been created here in the short term so play this to the downside if prices break 126 early next week.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Live Cattle Futures
Oat futures sold off around 13 cents for the trading week at 3.27 a bushel as I am recommending a short position in this market while placing my stop loss above the 2 week high at 3.52 risking around 26 cents from today’s price levels per contract as I am extremely bearish the grain market so take advantage of the recent strength and sell. My theory here is if corn and wheat prices continue to hit multi year lows it’s just a matter of time before the oats fall off a cliff as well as the price difference between these commodities is too wide as the oat market will catch up to the downside.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Sugar Futures
Sugar futures in New York are down for the 3rd consecutive trading session currently trading at 17.06 down 22 points in the October contract and I’ve been recommending a short position when sugar prices broke 17.45 as a bear market has started when prices broke out of a 4 month consolidation. Sugar futures are trading 100 points below their 20 and 100 day moving average telling you that the trend is very strong to the downside as I think prices will hit new contract lows at 15.80 in the next couple of weeks due to the fact that crude oil and corn continue to move lower as sugar is used as a bio diesel and is still relatively high compared to those 2 other commodities. My theory states the longer the consolidation the stronger the breakout as sugar was in a consolidation between 17.50 – 18.80 over the last 4 months breaking out 4 days ago so play this market to the downside while placing your stop loss above the 10 day high which currently stands at 18.29 risking about 120 points or $1,300 per contract from today’s price levels however that stop will be lowered on a daily basis so I continue to recommend being short this market.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Cotton Futures
Cotton futures in the December contract finished down for the 9th consecutive trading session finishing lower by 400 points for the trading week as the WASDE crop report showed an additional 1.5 million bale increase in production while also raising the carryover level from 4.7 million bales to 5.2 million bales as prices have completely collapsed hitting a 2 year low as many of the agricultural products have been hit hard to the downside in recent weeks as excellent growing conditions across the United States which is pressuring prices as I’ve been recommending a short in cotton for quite some time while placing your stop above the 10 high which currently stands at 75.25 and that stop will be lowered on a daily basis as the chart structure is improving dramatically. Cotton should have an all-time record supply and an all-time record crop as my next target is at 65.00 as deflation has returned to many of the commodity markets as the Federal Reserve is fading out their quantitative easing program but if you are not already short this market sit on the sidelines and wait for a better chart pattern to develop as prices are completely oversold at the current time.
TREND: LOWER
CHART STRUCTURE: AWFUL
What do I mean when I talk about chart structure and why do I think it is so important when deciding to enter or exit a trade?
I define chart structure as a slow and grinding up or down trend with low volatility and no chart gaps. Many of the great trends that develop have very good chart structure with many low percentage daily moves over a course of at least 4 weeks thus allowing you to enter a market and allowing you to place a stop loss with will be relatively close due to small moves thus reducing risk. Charts that have violent up and down swings are not considered to have solid chart structure but markets that continue to trend like the current soybean complex allowing for you to place close stops as it continues to fall dramatically. I always like to place my stops at 10 day highs or 10 day lows and if the charts have a tight pattern that will allow the trader to minimize risk which is what trading is all about and if the chart has big swings your stop will be further away allowing the possibility of larger monetary loses.
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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