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.
Precious Metal Futures--- The precious metal futures this Friday afternoon were down sharply across the board due to the fact of the Fed minutes coming out yesterday stating that a possible end of the QE’s by the end of 2013 which sent the precious metals sharply lower with gold plummeting $24 today to trade right around $1,651 an ounce and at one point was down over $45 before profit taking set in continuing its bearish momentum hitting a fresh 4 month low trading far below its 20 and 100 day moving averages. Silver futures for the week are down around $.70 hitting a fresh 4 month low currently at 29.95 in the March contract also trading below its 20 and 100 day moving average with major support right around $28 an ounce and in my opinion I think the tide has turned in the precious metals in the short term and I see further weakness in the coming weeks. The one bright spot in the precious metals this week was copper in the March contract finishing higher by about 300 points for the shortened week trading above its 20 and 100 day moving average and on Wednesday the 1st day of 2013 hit a two-month high on the fact that the housing market is coming back strong along with economies around the world. Palladium futures for the March contract are down around $9 and 688 with a possible double top happening the last week so keep a close eye on that market at this point. The Federal Reserve by keeping interest rates really low and performing all the QE’s throughout the last several years has really propped up stock and commodity prices around the world so on the 1st hint that they will start to get out of the market prices will head lower and that’s exactly what you’re seeing in the commodity markets although the monthly unemployment today was supportive to the stock market once again. The U.S dollar had a tremendous rally in yesterday’s session all due to the fact that if the government does stop purchasing bonds that will put pressure on the foreign currencies placing a high probability that the lows in the U.S dollar are in which is very negative towards commodity prices especially the precious metals so look for further weakness in the next couple of weeks in my opinion. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Grain Futures--- The grain futures traded lower this shortened holiday week with soybeans trading far below its 20 and 100 day moving average down around $.35 for the trading week looking with the next possible support at 13.56 which is the contract low which happened today and on November 16th of this year currently trading at 13.72 a bushel in the March contract and in my opinion I think we will break those lows and head lower due to the fact that China has been cancelling large amounts of soybeans in the last couple of weeks pushing prices sharply lower while corn futures continue their bearish momentum trading far below their 20 & 100 day moving average down around $.12 cents for the trading week hitting a fresh 6 month low on waning demand and what looks to be a record crop in corn and soybeans down in South America. Wheat futures for the March contract are lower again this week down around $.25 hitting a fresh 6 month low continuing its bearish momentum with excellent chart structure after breaking out of a 19 week consolidation rewarding traders who were patient and when it technically broke out to the downside investors jumped in. As I’ve stated in many previous blogs I am bearish the wheat and corn and I have now turned bearish soybean oil and the soybean market in general due to the fact that China keeps cancelling large purchases and now the Federal Reserve might actually stop the QE3 later this year which is a definite negative towards commodity prices while record supplies coming out of South America is also going to keep a major lid on grain prices for the next couple of months unless the weather turns bullish. Traders are focused on next week’s crop report which will show crop production and the supply demand tables with estimates also coming out of Argentina and Brazil which should lend some short-term price direction. The trend is your friend in the commodity markets if you look at corn and wheat they continually grind lower in the classic bear market fashion when the market generally trades lower almost on a daily basis and even the rallies are short-lived so I still am recommending short positions across the board in the grain market. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Cotton Futures--- Cotton futures for the March contract are finishing the week on a sour note down only 20 points at 74.90 rallying off of session lows and now trading below its 20 day moving average right at its 100 day moving average with major support at 73.00 down around 125 points for the trading week. Cotton prices last week jumped as high as 77 which was major resistance on the daily chart reversing sharply hitting a fresh three-week low on what looks to me is a possible continuation of a sideways market here in the short term. Volatility in cotton market is relatively low at this point in time and I do see volatility picking up sharply here in the next couple of months especially when we enter the spring planting season where farmers will have to decide on what to plant and what crop will be most profitable for them. I’m not recommending any positions in the cotton market at this time I would like it to break above 77 or break below 73 before entering a position so I would be patient waiting for some type of trend to develop just like it did in the wheat and in the corn market. TREND: SIDEWAYS –CHART STRUCTURE: EXCELLENT
Energy Futures--- The energy futures this shortened holiday week were mixed with crude oil finishing slightly higher this Friday afternoon by about $.10 in the February contract at 93.05 still right near a 10 week high and trading far above its 20 and 100 day moving average up around $.95 for the week with the fiscal cliff being resolved helping push prices sharply higher this past Wednesday only to trade lower in the last couple of sessions due to the fact that QE3 might end later in the year which was quite a surprise to the markets in the last couple of days. Heating oil futures for the February contract are trading above the 20 day moving average but still below their 100 day moving average trading in a sideways pattern with 3.05 as major resistance and 2.90 as major support down around 200 points for the trading week and I still suggest traders sit on the side-line in this market and wait for a real trend to develop. Unleaded gasoline futures for the February contract were down around 400 points this Friday near 2.75 finishing unchanged for the trading week still trading above its 20 and 100 day moving average near a 3 month high while the 2 strongest commodities in the energy sector are crude oil and unleaded gas with bullish momentum and in my opinion I do believe they will head higher in the next couple of weeks especially if Iran starts to come back in the picture and eventually in my opinion they will. Many of the commodity markets including the grains and the precious metals have been hitting new recent lows on the fact that the Federal Reserve might stop its money printing which is causing the U.S dollar to climb higher in the last couple of days ,however it is not affected the energy sector which is still right near recent highs due to the fact that there is solid demand around the world because economies are improving and generally crude oil prices follow the S&P 500 which is hitting new yearly highs once again today showing that the United States economy has improved dramatically with today’s monthly unemployment figures showing 155,000 new jobs which is right in line as traders believe that a solid trend in unemployment declining in recent months will continue throughout the year. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Coffee Futures--- Coffee futures ended the week on a quiet note down about 30 points in the March contract currently trading at 146.90 and rallied around 400 points from session lows bouncing off of major support in what has been a very volatile last week with big spikes down and big spikes higher basically settling right in the middle range for the week. Coffee futures are trading still below their 20 and 100 day moving average with major support at 141.25 which was hit last Friday and then rallied all the way up to 151.95 before profit taking set in still right near a 2 year low. The resolution of the fiscal cliff in the last couple of days has not helped coffee prices out a bit and with huge supplies coming from Vietnam and Brazil as well as waning demand which is causing prices to continually grinding lower like a classic bear market, however in the last several weeks we’ve kind of gone sideways so I’m wondering if a rounding bottom might start to form so I’m advising traders to keep an eye on this market because when coffee does bottom it can move up quickly. Remember the trend is your friend when you trade commodities and the trend in coffee in the last months has been severely to the downside with investors shaking their heads wondering how low prices can actually go and when will coffee prices bottom. In my opinion at this point I believe coffee prices are headed lower with a pessimistic commodity market this week due to the fact that QE3 might be abolished by the end of the year pushing the U.S dollar higher which then pushes commodity prices lower. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Orange Juice Futures--- Orange juice futures rallied slightly today up about 100 points at 112.20 breaking a losing streak that lasted 9 trading sessions in an absolute collapse in price due to the fact that a frost has not happened in January reversing the price premium that was put into the market in the last month all erased in the last 10 days with major support at the contract low of 107.50 which is only an eyelash away ,however in my opinion I believe this market is oversold and the last time we hit the support we rallied tremendously so keep an eye on 107.50 and if that level is broken prices could possibly head back down into the low 90s but if that level holds you could see a short-term bounce due to oversold conditions. Orange juice futures are trading far below their 20 and 100 day moving average with short-term now turning bearish with many of the commodities this week except the energy sector selling off as investors are nervous about the fact that QE3 might this year and the easy monetary policy which has prompted up many commodities might be ending. Many of the soft commodities are still right near contract lows including sugar, coffee, and cocoa while orange juice is only an eyelash away from hitting fresh new lows and the sector has been bearish for several months now as traders are searching for a bottom. Remember when you trade commodities you will be wrong sometimes so you must put a stop loss and not marry your position because never getting out causes exaggerated monetary losses so always risk between 1-2% of your account balance on any given trade trying to minimize risk.TREND: LOWER –CHART STRUCTURE: TERRIBLE
Currency Futures--- Currency futures this week saw some volatility with the Federal Reserve minutes being released yesterday stating that QE3 might be ending later this year pushing the dollar up 3 straight days higher by 100 points for the trading week still trading above 20 and 100 day moving average which looks to me like a possible triple bottom has been formed while the Euro currency down 150 points this week trading below its 20 day moving average but still slightly above its 100 day moving average which is at 1.2909 and in my opinion I think prices could head to that level here in a couple of days due to the fact that the easy monetary policy might be coming to an end. If you look at the bond market in the last several days yields have risen dramatically and that news is bullish the U.S dollar and bearish foreign currencies when our bond rates climb. The Japanese Yen which I have talked about several different times and I remain very bearish is trading below its 20 and 100 day moving average down over 200 points for the week and this Friday down another 122 points trading at 11357 and in my opinion I believe we are headed down to the 105 level in the next couple of months due to the fact that the Japanese government is forcing the Yen lower against the U.S dollar hitting a fresh 2 1/2 year low once again today. I am still advising traders to be short the Japanese Yen and I would take a shot buying the U.S dollar placing my stop below the contract low which is around 120 points away from the current price which is around $1200 per contract if you are wrong. Remember when you trade commodities you will be wrong sometimes so you must put a stop loss and not marry your position because never getting out causes exaggerated monetary losses so always risk between 1-2% of your account balance on any given trade trying to minimize risk. TREND: MIXED–CHART STRUCTURE: EXCELLENT
Double Bottom & Double Tops---This indicator is one of my favorite patterns that signals a trend reversal because its considered to be one of the most reliable and is commonly used by many technicians. These patterns are formed after a sustained trend and signal to chartists that the trend is about to reverse. The pattern is created when a price movement tests support or resistance levels twice and is unable to break through. This pattern is often used to signal intermediate and long-term trend reversals. Their also can be triple bottoms and triple tops which are in my opinion an excellent indicator that predicts bottoms and tops at a relatively high rate and if you look at some of the daily charts you will see some double and triple tops and bottoms. If you are using any indicator such as these make sure you place a stop loss to try and minimize your monetary loss because indicators do not work a 100 % percent of the time so you still need solid money management technique to cut loses. TREND: MIXED–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
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.
Michael Seery, President
Phone # (800) 615-7649