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 are trading far below their 20 and 100 day moving average settling last Friday at 17.84 going out this Friday in New York around 17.55 finishing down about $.30 hitting a 4 1/2 year low as the U.S dollar continues to pressure silver and the rest of the precious metal complex. If you took my original recommendation several months back when prices broke 20.44 which was the 4 week low continue to place your stop above the 10 day high which currently stands at 18.85 and that will start to improve late next week as the chart structure will tighten up, but I still believe prices look vulnerable even at these multi-year lows. The trend is your friend in the commodity markets and the trend in the U.S dollar is clearly higher and that’s pessimistic all commodity prices, but if you have missed this trend sit on the sidelines as you have missed the boat as you do not want to chase markets that is why I like to find the trend as early as possible as my rule states a 4 week high or a 4 week low has to occur before entering.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Gold Futures
Gold futures in the December contract are down $8 this Friday afternoon in New York currently trading at 1,214 hitting fresh nine-month lows while still trading far below their 20 and 100 day moving average telling me that the trend is to the downside as the U.S dollar hit 2 year highs against many of the foreign currencies pressuring the commodity markets and especially the precious metals this week. The chart structure in gold has improved dramatically and if you took my original recommendation and sold the breakout at 1,278 make sure you place your stop 10 day high which currently stands at 1,243 an ounce and that will improve in the next several days as the next major level of support is 1,180 & if that price level is broken prices could slide rather dramatically. Gold prices settled last Friday at 1,216 finishing slightly lower for the trading week as volatility has certainly increased as prices were up $20 a couple of days back on the news of the coalition & the United States bombing ISIS but then prices came right back down as I still think lower prices are ahead as there’s no reason to own gold right now especially with a very strong U.S dollar so continue to play this to the downside making sure you place your stop above the 2 week high.
TREND: LOWER
CHART STRUCTURE: IMPROVING
U.S. Dollar Futures
The U.S dollar is trading far above its 20 and 100 day moving average telling you that the trend is higher and if you took the original recommendation back when the breakout occurred on July 25th at 81.20 continue to place your stop at the 10 day low which currently stands at 84.00 as there has not been a 2 week low since late July and that just shows you how strong this market has been to the upside as the dollar is being seen as a flight to quality as there are so many problems in Europe currently as money is flowing back into the U.S dollar. The Euro currency continues to slide along with the Japanese yen as the U.S dollar hit a 2 year high and I do think prices are headed higher as the chart structure will improve dramatically next week so continue to play this to the upside and if you’re lucky enough take advantage of prices dip making sure you place the proper stop loss but the trend clearly is higher as the question remains how low will the Euro currency go.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
10 Year Note Futures
The 10 year note has rallied this week due to all of the problems geopolitically speaking pushing prices to a 2 week high as I was recommending a short position when prices hit a 4 week low getting stopped out in yesterday’s trade as the yield has hit 2.52% so currently I’m sitting on the sidelines waiting for another trend to develop. This trade was a small loser as prices grinded higher over the last couple of days to sit on the sidelines and wait for another trend to develop as I still do believe interest rates are headed higher in this country but with worldwide problems and interest rates at all-time lows in Europe this trade will take patience and time to develop. The GDP report stated that the economy grew at 4.6% which is very solid and that’s putting pressure on the 10 year note this Friday afternoon, however as a trader you must have an exit strategy and my exit strategy is when I’m short and the market hits the 10 day high it’s time to move on so I’m out of this trade but I do think that there will be another opportunity relatively soon.
TREND: NEUTRAL
CHART STRUCTURE: IMPROVING
Copper Futures
Copper futures in the December contract settled last Friday at 3.09 currently trading around 3.03 as I’ve been recommending a short position when the breakout occurred at 3.10 while placing your stop above the 10 day high which currently stands at 3.22 as the chart structure will improve next week as prices continue to look vulnerable in my opinion due to the fact that China is slowing down and that is putting pressure on prices. Copper prices are currently trading below their 20 and 100 day moving average as 3.00 is the next support level and if that level is broken I think you slide down to 2.80 as I still think prices are historically too high, especially with deflation creeping its ugly head throughout the world especially in Europe.
TREND: LOWER
CHART STRUCTURE: POOR
Coffee Futures
Coffee futures had a wild trading week with a sharply higher day last Wednesday stopping us out of our short position as prices hit the 10 day high at 188 then reversing 900 points the next day which is very frustrating as a trader, however must have an exit strategy so right now I’m sitting on the sidelines just waiting for a better chart pattern to develop with a possible resell if prices break 178 a pound once again. Traders are keeping a close eye on the weather as rains are needed for the trees to allow flowering to take place as this is going to be an extremely volatile year due to the fact of last year’s drought so wait for better chart structure to develop and look for another market that is trending stronger as this trade went against us very quickly.
TREND: NEUTRAL
CHART STRUCTURE: IMPROVING
Soybeans Futures
Soybean futures in the November contract continued their bearish trend finishing down sharply for the 2nd consecutive trading session in Chicago currently trading at $9.10 a bushel down $.27 in the last 2 trading sessions and down around $.40 for the trading week as the crop expectations are massive and supplies have ballooned to historical highs as there seems to be no end to the downside. Soybean futures are trading far below their 20 and 100 day moving average and if you followed any of my previous blogs for many months I have been extremely bearish the grain sector including soybeans and remain short and if you took that recommendation 4 months ago continue to place your stop above the 10 day high which stands at 10.00 risking around $.90 or $4,500 per contract at today’s price levels. Traders are awaiting for this Tuesdays grain stock report which will show supplies as many of these reports have been bearish in recent months as I’ve never seen such incredible weather here in state of Illinois as we are 75° and sunny once again as there’s no chance for an early frost as we await Monday’s crop progress report which should show around 15% harvested as the crop is certainly maturing quickly and farmers will certainly be able to get into the fields in the next couple of weeks as harvest is in full swing.
TREND: LOWER
CHART STRUCTURE: IMPROVING
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
Wheat Futures
Wheat futures in the December contract finished unchanged this Friday afternoon in Chicago currently trading at 4.75 a bushel as the Wall Street Journal is reporting that the September 1st all wheat production stands around an estimated 2.033 billion bushels with winter wheat at 1.40 billion bushels as excellent crops are developing around the world pushing prices to multi-year lows as prices are still trading far below its 20 and 100 day moving average telling you that the trend is sharply lower. If you took my original recommendation when prices broke 5.40 on September 3rd which was the new contract low continue to place your stop at the 10 day high which currently stands at 5.08 risking around $.35 reaching $1,800 dollars per contract as the chart structure will improve dramatically as I still think lower prices are ahead. The grain market as a whole continues to move lower hitting multi-year lows in corn, soybeans, and soybean oil as the world is awash of grain as the World Grain Council stated last month supplies are at 30 year highs while China is also slowing down so currently there are very few bullish fundamentals to support grain prices especially with the U.S dollar continuing to surge higher which is always negative commodity prices in the long run.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Corn Futures
Corn futures in the December contract finished down another $.03 at 3.23 a bushel continuing their bearish trend as estimates of a crop of 14.3 billion bushels coming this October has certainly pressured prices and I’m still recommending a short position as I certainly think $3 is a possibility here in the next couple of weeks as carryover levels of 2 billion bushels is just way too much especially with deflation created throughout the world at the current time. The U.S dollar continues to hit a 2 year high today pressuring grain prices and certainly corn prices as we now have a strong dollar and huge supplies as I do think lower prices are headed for the rest of 2014 unless less acres are planted next year you could see a large surplus in grains pushing prices even lower in my opinion. Corn futures are trading substantially under their 20 and 100 day moving averages as this has been a terrific trend & if you took my original recommendation when prices hit a 4 week low back in the month of May at 4.87 continue to place your stop above the 10 day high which currently stands at 3.50 a bushel risking around $.27 or $1,400 per contract as nobody knows how low prices can actually go so continue to play the correct exit strategy.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Sugar Futures
Sugar futures in the October contract skyrocketed after hitting multi-year lows earlier in the week as UNICA reported a reduced production number of sugar in Brazil sending prices up to 15.50 as extreme volatility has entered this market and if you have been following any of my previous blogs I have been short sugar for quite some time in fact from early May when prices broke 17.45 getting stopped out a couple of days back around 14.40 which was the 10 day high so sit on the sidelines and look for a better trending market as this trade was outstanding from the get-go. One of my basic theories states a breakout of an 11 week consolidation or more and sugar prices broke out 13 week consolidation must be sold and that’s the reason why I decided to short at 17.45 as prices absolutely collapsed as worldwide supplies are large with excellent crops accelerating carryover levels, however everything comes to an end and I’m not recommending any positions in sugar at this time so wait for better chart structure to develop as prices have become extremely volatile in the last week and I still do believe that commodity prices as a whole will continue to move lower as deflation is a worldwide problem in my opinion.
TREND: NEUTRAL
CHART STRUCTURE: POOR
Corn Futures
Cotton futures in New York hit new multi-year lows this week settling last Friday at 64.40 going out today around 62.30 finishing down around 200 points for the trading week as prices continue to decline all due to the fact that Chinas economy is slowing down therefore demand for cotton is weak at the current time. The United States is producing an excellent crop which will start being harvested relatively soon which could also put harvest pressure on prices here in the next several months and if you’re bearish prices I would sell at today’s price while placing my stop above the 10 day high which currently stands at 68 risking around 570 points or $2,900 per contract as the chart structure will improve tremendously in the next couple of days as the trends in all of the agricultural markets remain bearish. Cotton prices have fallen so dramatically since May that this trade is a little long in the tooth and I don’t know how much lower prices can go but as a commodity trader you go with the trend and you don’t try to predict price targets while sticking to the rules and that’s why I use my exit strategy and stick to proper money management techniques as well.
TREND: LOWER
CHART STRUCTURE: IMPROVING
What do traders mean when they talk about seasonality and its effects on commodity prices?
The definition of seasonality states that a characteristic of a certain time when the data experiences regular and predictable changes which occur every calendar year and in a time series that reoccurs or repeats over one year can be said to be seasonal. An example of seasonality is the grain market were generally prices head higher in spring and early summer on concerns of a drought or a poor crop, it also happens in the energy sector in the summer months when demand for unleaded gasoline is at its peak and then generally declines going into winter. Seasonality also affects the grains in the month of October when historically prices decline during that period due to harvest pressure. Traders try to use seasonality to predict or take advantage of prices in a certain month or season with many of the agricultural commodities.
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.
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
No comments:
Post a Comment