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 higher for the 3rd consecutive trading session hitting a 2 week high as I have been recommending a short position getting stopped out in today's trade licking my wounds as I'm a little disappointed as it was all based on the FOMC minutes as they are not going to raise interest rates anytime soon pushing up many of the commodity markets especially the precious metals. Gold futures are still trading below their 20 and 100 day moving average ,however as an exit strategy when I'm short and prices hit a two week high it’s time to move on and sit on the sidelines as prices settled last Friday at 1,152 while currently trading at 1,187 up over $30 in an impressive week especially considering the fact that the NASDAQ 100 has crossed 5000 once again as everything is basically higher across-the-board this afternoon. I've been recommending a short position from around 1,160 getting stopped out at 1,177 as it was a losing trade but nothing horrific but disappointing as always when you're on the wrong side of a trade, however I do think we will be sitting on the sidelines in this market for quite some time waiting for better chart structure to develop as I think prices will chop around trading off of the U.S dollar which has turned very volatile at the current time.
TREND: MIXED
CHART STRUCTURE: POOR
Silver Futures
Silver futures in the May contract are sharply higher this Friday afternoon trading up $.75 in New York hitting a four week high as I’ve been recommending a short position in silver prices getting stopped out around the 16.20 level as prices have skyrocketed off the FOMC minutes stating that they will not raise interest rates sending many commodities sharply higher on short covering alone. Silver futures are trading above their 20 but still below their 100 day moving average as I’m now advising clients to sit on the sidelines and wait for better chart structure to develop as prices settled last Friday at 15.50 finishing up almost $1.40 for the trading week having one of its best weeks in months as the U.S dollar is down 160 points pushing up the precious metals in today’s action. I’ve been recommending a short position from around the 15.60 level losing around $.60 on the trade or $600 per mini contract and I’m disappointed but it’s time to move on and look at another market that is currently trending as many of the commodities may have experienced a short term bounce as it looks like interest rates flat-out are not going higher. The chart structure in silver at the current time is terrible as prices have skyrocketed in the last three days as volatility is high once again so look at a different market with less risk at the current time as the 15.50 breakout to the downside was false and that happens so you have to deal with it and risk as little amount of money as possible.
TREND: MIXED
CHART STRUCTURE: POOR
Crude Oil Futures
Crude oil futures in the May contract are up $1.20 a barrel currently trading at 46.70 as I've been recommending a short position when prices broke out to contract lows earlier last week and if you took that trade continue to place your stop loss at the 10 day high which currently stands at 52.00 risking around $7 dollars or $3,500 per mini contract plus slippage and commission as the chart structure remains poor, however it will start to tighten up on a daily basis next week. Crude oil futures rallied today because of the fact that the U.S dollar is down 160 points pushing up many commodity prices, however as the trend follower I continue to think lower prices are ahead so make sure you place the proper amount of contracts on risking 2% of your account balance as oversupply issues are currently keeping a lid on prices. The precious metals, grain market, stock markets, and the energy complex were all higher today as it seems to me that we had a relief rally taking place due to the fact that of the FOMC minutes which were construed bullish as interest rates are not going higher in the short term . As a trader I believe you must follow the trend and the short term trend is to the downside so don’t let a 1 or 2 day rally bother you as you must stick to the rules and that sometimes means giving back profits.
TREND: LOWER
CHART STRUCTURE: POOR
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
Orange Juice Futures
Orange juice futures in the May contract are up 900 points this Friday afternoon in New York after hitting another yearly low around the 105 level in yesterday’s trade currently trading at 115 as I've been recommending a short position in orange juice for the last several months and if you took that trade place your stop loss above the 10 day high at 121 risking around 600 points or $900 per contract plus slippage and commission. The last several days have been frustrating for me as I was getting stopped out of many different commodities and as you know if you been reading any of my previous blogs I was short the entire commodity market but today was one of those days where everything was sharply higher but orange juice has not hit the 10 day high so I’m sticking to my rules as prices are still trading below their 20 and 100 day moving average settling last Friday at 114 so finishing slightly higher for the trading week. As I’ve talked about in previous blogs I think there's a possibility prices can break 100 as I’m disappointed because I thought that could happen in today’s trade but the U.S dollar is down 175 points pushing up many commodities as anybody who was short was running for the hills.
TREND: LOWER
CHART STRUCTURE: EXCELLENTD
Cotton Futures
Cotton futures in the May contract settled last Friday at 60.50 while currently trading at 63.00 up 250 points for the trading week now trading above its 20 and 100 day moving average however the trend is still mixed as prices have been extremely choppy over the last several months as I am advising clients to sit on the sidelines and wait for a better chart structure to develop. Spring planting is right around the corner as estimates of the March 31st planting intentions are around 9.7 million acres which is around 12% less than last year as volatility should enter the cotton market as the critical growing season is ahead. The U.S dollar has been extremely volatile in the recent days and that’s sending high volatility into the commodity markets pushing cotton up about 250 points in Wednesdays trade as prices have been depressed in the last six months as supplies around the world are ample especially with China’s surplus keeping a lid on prices here in the short-term, however this is an agricultural commodity and if a drought happens in the United States cotton prices could rock ‘n roll once again, however if we do have another solid crop prices could go much lower come harvest time.
TREND: MIXED
CHART STRUCTURE: POOR
Wheat Futures
Wheat futures in the May contract are up $.20 this Friday afternoon in Chicago hitting a 4 week high as I’ve been recommending a short position getting stopped out around $5.20 as the FOMC minutes pushed up all prices across-the-board as now I’m sitting on the sidelines waiting for another trend to develop. I’ve also been recommending a short position in corn and soybeans as the U.S dollar is down 180 points showing extreme volatility pushing wheat prices to a four week high. Many of my trade recommendations were stopped out over the last several days as many of the commodity markets have hit a two week high as that’s my exit strategy because my theory states that I don’t want anything going against me for more than two weeks as you must try to minimize risk as this trade rebounded quickly off contract lows creating another false breakout to the downside. Wheat futures are trading above their 20 day but still below their 100 day moving average telling you that the trend is mixed to higher as the grain market as a whole should continue to experience high volatility as we enter the 1st day of spring so move on and look at another market that’s beginning to trend. One of my rules to enter a trade is that prices must hit at least a four week high, however wheat has hit a four week high but the chart structure is poor as the 10 day low is around 4.80 risking around $.50 which does not meet my criteria to enter as the risk is too high.
TREND: MIXED
CHART STRUCTURE: POOR
Sugar Futures
Sugar futures in the May contract are trading below their 20 and 100 day moving average telling you that the trend is to the downside after settling last Friday in New York at 12.70 currently trading at 12.60 down slightly for the trading week, however prices did hit a six year low in today’s trade. I have been recommending a short position when prices broke 14.37 if you took that trade place your stop loss above the 10 day high which currently stands at 13.31 risking around 70 points or $800 per contract plus slippage and commission. Sugar prices are trading lower for the 3rd consecutive trading session showing real weakness despite the fact that many of the commodity markets are sharply higher this Friday afternoon due to the fact of a very weak U.S dollar which shows you how bearish prices are so keep the proper stop loss as I do think lower prices are ahead. Sugar production in Brazil should be very large this year with ample worldwide supplies as there’s very little bullish fundamental news to push up prices except for possible short covering or the U.S dollar possibly topping out, however the trend is your friend and this trend has been getting stronger to the downside on a weekly basis as the chart structure has tightened up considerably so take advantage of any rally while risking 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures in the May contract are up $.17 this Friday afternoon in Chicago currently trading at 9.79 a bushel as I’m now recommending a short position and if you take this trade place your stop loss above the 10 day high which currently stands at 9.97 risking around $.18 or $900 per contract plus slippage and commission as the chart structure is outstanding at the current time. Soybean futures hit a 6 month low in Monday’s trade however the U.S dollar is down 130 points today and many of the commodity markets are sharply higher as massive short covering is taking place in my opinion so continue to take advantage of any rallies and play this to the downside as a possible retest of the contract low around 9.30 is in the cards in my opinion as traders are awaiting the March 31st planting intentions report. There are wide variations on the planting intention around 84 – 88 million acres with the possible production around 3.9/4.4 billion bushels which is extremely wide in my opinion, however once we find out what the actual acres will be then we can come up with solid and reliable production numbers as this will be an extremely volatile summer as it always is in the grain market. Soybean futures are trading below their 20 and 100 day moving average telling you that the trend is to the downside as Brazil produced another record crop as demand has been waning due to a strong U.S dollar and China deciding to buy South American soybeans instead of U.S soybeans and that will be the case for quite some time as carryover levels are still estimated at 385 million bushels which historically is very high as there is very little bullish fundamental news to push prices higher here in the short-term.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee futures in the May contract are trading above their 20 but below their 100 day moving average telling you that the trend is mixed as I have been recommending a short position when prices broke the 160 level getting stopped out in yesterday’s trade around the 142 level as I’m now sitting on the sidelines as a possible double bottom may have been created at 130 as prices are right near a 3 week high. Coffee prices settled last Friday at 129.80 while currently trading at 143.50 up almost 1400 points for the week basically on short covering as investors came in scooping up prices thinking that the downturn have been exaggerated, however the trend now is mixed so sit on the sidelines and wait for better chart structure to develop and a new trend as well. The main reason why many of the soft commodities including coffee have been going lower is because of the Brazilian Real hitting a 12 year low against the U.S dollar sending anything grown in Brazil to the downside, however the U.S dollar is down about 130 points today propping up many of the commodity markets as the chart structure still remains solid as another trend could develop in the next couple weeks so keep an eye on coffee and look at another market at the current time that’s beginning to trend.
TREND: MIXED
CHART STRUCTURE: SOLID
Corn Futures
Corn futures in the December contract finished up $.10 to close around 4.09 a bushel and now has rallied $.16 from Wednesdays low as I’ve been recommending a short position in this market and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 4.17 risking around 8 cents or $400 per contract plus commission and slippage. Many of the commodity markets were sharply higher today and as you know I’ve been short many commodity sectors getting stopped out of many positions in today’s trade but corn prices have not hit the 10 day high and if you are not yet short this market I strongly suggest that you sell at today’s price levels as the risk/reward is highly in your favor as massive short covering is to blame for the 16 cent rally in the last three days. Traders are keeping an eye on the March 31st planting intentions which is around 88 million acres which should produce around 13.6 billion bushels which is 600 million less than last year and 500 million less than 2013 so this year’s crop will not be a record, however the rally is blamed on the fact that the U.S dollar is down 170 points today so continue to sell rallies and take advantage as I do think lower prices are ahead. If you’re a corn producer I strongly suggest you start to hedge on rallies like this taking advantage of higher prices because if we do produce a solid crop carryover levels will be historically high coupled with the fact of deflation worldwide continuing to pressure prices. Corn prices hit a 6 six month low in Wednesdays trade as prices may have been oversold but as a trend follower I still strongly suggest getting short this market at today’s levels even possibly adding to your position as long as it meets criteria risking 2% of your account balance as I think today’s prices will be reversed next week.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Trade with the short term trend
As the saying goes in futures trading the trend is your friend but sometimes you will be a market that is trending higher and then has a false breakout to the upside and then suddenly sells off causing you a 2% loss on your equity and you say to yourself that was a bad trade and should I do something different on my next trade. If it was up to me I would continue to buy strength and sell weakness because in the long run commodity trading is about percentages of success in the long run, and if you go with the path of least resistance more often than not you will have the probabilities of success on your side. I define a trend as a commodity hitting a 20 day high or low as a trendy market, if the market is in a consolidation stay away from it and find something that is trending.
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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