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 April contract are currently trading at 1,277 up around $21 an ounce with extreme volatility after selling off more than $30 in Thursday’s trade while settling last Friday at 1,293 going out this Friday afternoon around 1,276 finishing down $17 in a wild trading week. Gold futures topped out slightly above $1,300 as profit taking ensued as prices are still trading above their 20 and 100 day moving average and I’m still recommending a bullish position and if you took that original trade place your stop loss below the 10 day low which now yesterday’s low at 1,252 risking around $24 from today’s price levels or $2,400 risk per contract plus slippage and commission. As I’ve talked about in many previous blogs I do think gold is now being used as a currency due to the fact that the Euro currency and many foreign currencies are absolutely falling out of bed as interest rates in many countries have gone negative so who wants to place money into a bank and lose money as investors now prefer gold which has no dividend but still it’s better than a negative return. Volatility in many of the commodity markets is very high at the current time especially the precious metals and I expect that to continue despite the fact that the U.S dollar hit an 11 year high continuing its secular bull market in my opinion as I do think 100 is on its way in the next several months as the United States economy is doing much better than any economy worldwide. Gold futures have rallied from a contract low of 1,130 all the way up to about 1,310 in the last several months as money is finally starting to come out of the S&P 500 sending money flows back into the precious metals also sending high volatility which I think is here to stay especially with all of the worldwide problems
TREND: HIGHER
CHART STRUCTURE: SOLID
Silver Futures
Silver futures in the March contract are up $.50 this Friday afternoon in New York currently trading at 17.30 an ounce settling last Friday at 18.30 finishing down about $1.00 for the trading week with extreme volatility as Thursday’s trade pushed silver lower by over a $1.25 as I’ve been recommending a bullish position in this market when prices broke above the 17 level and if you took that trade continue to place your stop loss below yesterday’s low around 16.71 still risking around $.60 from today’s price levels. Silver volatility is extremely high at the current time so make sure that you use the proper amount of contracts risking only 2% of your account balance as I like to trade the mini contract which is $10 a cent versus $50 a cent on the large contract as high volatility has also entered the S&P 500 and the currency markets in recent weeks. The stop loss will remain at that level for the next 8 trading sessions so you’re going to have to be patient if you are long this market. As I talked about in previous blogs I believe silver is now being used as a currency due to the fact that interest rates around the world are so low that investors are looking at silver and gold as a currency replacing traditional paper currencies as nobody wants to own anything in Europe. Many of the commodity markets continue to head lower however silver and gold are the only 2 commodities that I am bullish but the problem here is if the rest of the markets continue to head lower silver and gold gains could be limited so just place the proper stop loss and if we are stopped out look at another market that is starting to begin another trend.
TREND: HIGHER
CHART STRUCTURE: SOLID
Crude Oil Futures
Crude oil futures in the March contract were up $3 a barrel having one of its best days in months trading at 47.50 a barrel and trading above its 20 day moving average for the 1st time in months while still below its 100 day moving average and looks like a possible bottom could be in place. If you’re still short this market I strongly suggest you place stop loss at the 10 day high which currently stands at 49.20 risking $1.80 from today’s price levels. Crude oil futures settled last Friday at 45.59 currently trading at 47.50 up about $2 as prices actually hit new lows in yesterday’s trade as there are rumors about the new Saudi Arabian King stirring up some controversy possibly cutting production, however I truly believe that we just saw massive short covering but stick to the rules and keep your stop at the proper level and if you are stopped out move on and look at another market that is trending. All markets come to an end that’s just the fact as I’ve seen many people reenter the market several times after having a successful run only to give back all their profits so if you are stopped out move on as there are many other markets to look at the current time as this was one of the best trends in recent memory but sometimes the best thing to do is to do nothing.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Wheat Futures
Wheat futures in the March contract are down $.05 this Friday afternoon trading around $5.03 a bushel after settling last Friday at 5.30 down about $.27 for the trading week still trading below their 20 and 100 day moving average as I’ve been recommending a short position in wheat for quite some time and if you took that trade place your stop loss above the 10 day high which currently stands at 5.45 a bushel risking around $.42 or $2,100 per contract plus slippage and commission. The next level of support is the contract low of around 4.80 as I think that could be retested next week as growing conditions are excellent throughout much of the Great Plains as ample supplies should come during harvest sending prices even lower as the grain market in general look bearish at the current time as the trend is your friend in the commodity markets and the trend in this market is clearly to the downside as prices have fallen quickly as concerns about Russia cutting exports has waned at the current time as there is very little bullish fundamental news to support prices except for the fact at the current time prices are oversold but if you have not participated in this market sit on the sidelines and look for a market that is beginning to trend.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Orange Juice Futures
Orange juice futures in the March contract were sharply higher this Friday afternoon in New York finishing up 555 points to settle at 140.00 as I’ve been recommending a short position from around the 137 level as prices rallied sharply due to oversold conditions in my opinion. Orange juice prices are still trading below their 20 and 100 day moving average hitting a 9 week low in yesterday’s trade selling off sharply in the prior 4 trading sessions as I think today was a kickback due to oversold conditions as the frost possibility in the state of Florida are starting to fade as the commodity markets in general still remain pessimistic, despite the fact that crude oil prices are up $3 a barrel as a possible bottom may have been created in the short term in the energy sector. As a commodity trader I am a trend follower and the trend in orange juice despite today’s sharply higher move is to the downside but make sure you place your stop loss above 148 risking around 800 points or $1,200 per contract from today’s price levels plus slippage and commission as the chart structure will not improve until at late next week.
TREND: LOWER
CHART STRUCTURE: POOR
Oat Futures
Oat futures in the March contract are down another $.08 this Friday afternoon in Chicago still trading far below their 20 and 100 day moving average settling last Friday at $2.90 finishing the week down about $.16 at 2.74 as I have been recommending a bearish position when prices broke $3 a bushel and if you took that original trade place your stop loss above the 10 day high which currently stands at $2.96 still risking about $.22 or $1,100 per contract plus slippage and commission. Oat futures have hit a fresh 2 ½ year low and the reason I was recommending this trade if you remember was due to the fact that the original risk was only about $400 which meets criteria in my opinion as prices continue their bearish trend and who knows where the low is in the oat market but continue to play this to the downside taking advantage of any rally while maintaining the proper stop loss and the proper amount of contracts. The grain market as a whole has been heading south here in recent weeks as the next major level of support in the oat market is around $2.50 and I do believe prices could head down to that level here in the next several weeks as I remain bearish.
TREND: LOWER
CHART STRUCTURE: SOLID
Corn Futures
Corn futures in the March contract are trading lower for the 5th consecutive trading session after settling last Friday in Chicago at 3.87 currently trading at 3.70 down about $.17 for the trading week and still trading below its 20 and 100 day moving average telling you that the trend is to the downside as I’ve been recommending a short position in corn for quite some time and if you took that original trade place your stop above the 10 day high which currently stands at 3.93 as corn prices hit a 3 month low with the next level of support around 3.60 as I still think there’s a possibility that the contract low around 3.30 in the next several months will be retested. The commodity markets in general still look very weak in my opinion as the U.S dollar is hitting an 11 year high once again as that’s also a negative influence on grain prices as harvest is underway in South America as traders are keeping an eye on the next USDA crop report which comes out in 2 weeks as estimates for planting is around 88 million acres which is reduction of 3 million acres from 2014. The corn markets in my opinion fundamentally speaking is not as bearish as the soybeans as less acres and expanding herds which will create more demand for corn, however if we produce between 13.5 – 14 billion bushels in 2015 I think prices could head much lower so I’m still recommending farmers to have a hedging strategy in place as deflation has been a real concern worldwide.
TREND: LOWER
CHART STRUCTURE: SOLID
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
Soybeans Futures
Soybean futures in the March contract are down $.7 in Chicago this afternoon currently trading at 9.61 a bushel trading lower for the 4th consecutive trading session still trading far below its 20 and 100 day moving average as I’ve been recommending a short position in soybeans and if you took that original trade the 10 day high has been lowered to 9.96 risking around $.35 or $1,800 per contract plus slippage and commission. Soybean prices are at levels we have not seen since mid-October as I do think there’s a high probability that we will retest the contract low of 9.20 as soybean oil prices have absolutely plummeted in recent weeks hitting a contract low on 4 consecutive trading sessions as outstanding weather in Brazil and the rest of South America continue to pressure prices here in the short term as harvest will be in full swing come next week. Export estimates came out yesterday & were very good however the trend is your friend and the trend clearly is to the downside in the grain market and many of the commodity markets as the U.S dollar is hitting an 11 year high once again so continue to play this to the downside as I remain bearish. Estimates of next year’s crop are around 86 million acres and that could produce a crop around 4.5 billion bushels which could send carryover levels to historical highs so at the current time there is very little bullish fundamental news in the grain market especially the soybean complex.
TREND: LOWER
CHART STRUCTURE: SOLID
Cotton Futures
Cotton futures in the March contract are down 10 points this Friday afternoon in New York currently trading at 59.40 after settling last Friday at 57.30 up around 200 points on strong exports as I’ve been recommending a short position in this market and if you took that trade place your stop above the 10 day high which currently stands at 60.30 risking around 90 points or $450 per contract plus slippage and commission as the chart structure is outstanding at the current time. If you did not take the original recommendation I’m still recommending it at this time as the risk/reward is highly in your favor as cotton is a very large contract so play this to the downside as prices are still trading below their 20 & 100 day moving average as poor economies around the world are continuing to pressure prices as volatility has slowed down considerably over the last several weeks allowing excellent charge structure to occur. If you have been reading any of my previous blogs I am bearish the entire commodity market except for gold and silver as I do think worldwide deflation is going to be a problem as China still has huge supplies of cotton so demand in my opinion will start to weaken in the next couple of months but I like the situation at the current time so I’m recommending a short position at today’s price levels placing the proper stop loss risking 2% of your account balance or less on any given trade.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee futures in the March contract finished up 190 points this Friday afternoon currently trading at 162 a pound still right near 1 year lows and if prices break under 159 I will be recommending a short position while placing your stop loss above the 10 day high which stands at 172.50 in Monday’s trade as the chart structure is starting to improve as the weather in Brazil is not as much of a concern as ideal conditions are still persisting in many key coffee growing regions. Coffee futures are trading below their 20 and 100 day moving average settling last Friday at 162.45 basically unchanged for the trading week as many the commodity markets continue to move lower as the U.S dollar is hitting an 11 year high once again as it doesn’t look like a back-to-back drought situation will occur in Brazil this year at least at the current time. The chart structure will start to improve later next week as the risk currently is 1200 points or $4,500 per contract plus slippage and commission as coffee is a very large contract controlling 37,500 pounds in one contract as the trend still remains bearish in my opinion so keep a close eye on the 159 level as a possible bear market could be underway.
TREND: LOWER
CHART STRUCTURE: IMPROVING
When Do You Enter A Trade?
What are your rules to initiate a trade on the long or short side of the commodity market? I have been asked this question many times throughout my career and my opinion is simply to buy on a 20-25 day high breakout in price on a closing basis only or sell on a 20-25 day low breakout to the downside also on a closing basis. Many times the price will break the 25 day high and sell off later in the day only to have your trade be negative very quickly.
I would rather buy the commodity at a higher price on the close because that gives me more confidence that the market has truly broken out. However there are more ways to skin a cat and this is not the only answer because some other trading systems might rely on different breakout rules that have also been reliable.
Remember always keeping a 1%-2% risk loss on any given trade therefore minimizing risks because the entry system I use always goes with the trend because I have learned over the course of time the trend is truly your friend in the long run. I also look for tight chart structure meaning a tight trading range over a period of time with relatively low volatility. I try to stay away from a crazy market that hit a 25 day high in 2 trading sessions versus the 25 high that actually took 25 days to create.
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