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 metals were mixed this week with silver futures getting hammered this Friday afternoon down $.56 at 28.65 an ounce down around $.20 for the trading week stuck in a 4 week sideways pattern which is unusual for silver to have this low of volatility for this long of a stretch still trading below its 20 day moving average which currently stands at 28.85 and far below its 100 day moving average which is at 31.65 with major support at $28 an ounce. Gold futures for the April contract my opinion are forming a rounding bottom trading higher than their 20 day moving average but below their 100 day moving average with stands at 1, 666 with major support at 1, 560 and the next resistance level which happened about 4 weeks ago at 1, 620 and if those levels are breached which I think could happen next week you will start to see the bull market come back while closing last Friday at 1, 593 up around $15 for the trading week. Copper futures for the May contract are still trading below their 20 and 100 day moving average finishing this week a positive note up around 300 points at 3.47 after settling last Friday at 3.52 down about 500 points for the week but coming off weekly lows which were hit at 3.40 which also created an 8 month low and I am scratching my head wondering why copper prices keep going down the housing market is doing so well if you look at lumber prices they are right near contract highs and the stock market continues to rally basically on a daily basis which I would think will start to lend support in the copper market and I do believe you should start taking advantage of these weak prices. As I’ve stated in many previous blogs I am bullish silver and gold I do believe they will start to rally here in the short term with a nice chart structure allowing you to place stops at recent lows minimizing your risk in case the trend does change but at this point I’m still advising traders to take advantage of commodity weakness and start building a small position in the precious metals. Platinum futures for the April contract currently trading at 1, 581 and are now down about $160 from the peak last month and are now trading underneath gold in the last several weeks and as I’ve stated before I do believe that platinum prices have a chance to go over $2,000 an ounce later in the year with palladium futures for the June contract continuing their bullish run at 760 up slightly for the trading session still right near contract on a strong automobile industry despite the fact that the U.S dollar has been rallying in recent weeks. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Grain Futures--- Grain futures were lower across the board this Friday afternoon but have been rallying slightly in the last couple weeks with wheat exports very solid in the last week prompting prices to hit a 3 week highs with solid chart structure and is now has rallied about $.50 from just recent lows with the next major resistance at 7.40 and the next major support which was the contract low of 6.80 which was about 3 weeks ago and as I’ve stated in previous blogs I was bearish the wheat market but at this point I’m just advising traders to sit on the sidelines and wait for a trend to develop. Corn futures for the December contract are right near 4 week highs finishing slightly lower this Friday afternoon to trade around 5.64 still above its 20 day moving average but below its 100 day moving average which stands at 5.94 with a solid harvest underway in Brazil which is keeping a lid on prices at this point. A survey by Farm Futures Magazine is stating that they are predicting the planting intentions for corn at 97.43 million acres up 0.3% from last year which could possibly put the crop around 14.5 billion bushels and I’m still advising traders to sit on the sideline in this market as I do believe the grain prices will bottom here in early spring and I would like to start getting long this market in the next couple weeks. Soybean futures for the November contract currently trading at 12.60 still right near 8 month lows with major support between 12.20 – 12.40 which were hit last July still stuck in a sideways 4 week pattern trading below its 100 day moving average but at its 20 day moving average which stands at 12.65 which could be broken on any given day and as I’ve stated before I’m still sitting on the sidelines in the soybean market and I’m getting excited to possibly start scooping up contracts at a lower cost because I do think we will rally in the spring and summer months in my opinion. USDA planting inspections comes out next Friday which should show exactly what crops will be planted between corn, soybeans, wheat, and cotton remembering that cotton has been rallying on the fact of reported lower acres so that report will have significant impact on short-term price direction. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Energy Futures--- The energy futures were mixed this afternoon in a pretty volatile trading week with crude oil reversing earlier losses to finish positive by $1.20 in the May contract closing at 93.60 still trading above its 20 & 100 day moving average still near 3 week highs despite finishing the week down about $.50 and is right at the 50% level from recent highs to recent lows and at this point trending higher despite the fact that the U.S dollar continues to be strong as investors are fleeing out of the foreign currencies once again putting pressure on many of the commodities. Unleaded gasoline which is been the strongest in the sector was down 200 points at 3.05 a gallon still stuck in a sideways 3 week channel in a directionless trade while heating oil down was 120 points to settle at 2.88 in the April contract hitting a fresh 7 month low before rallying going into the closing bell and I still think that market is still headed lower as Spring enters which should start to weaken heating oil demand and I still do see lower prices ahead. Many traders take advantage of the seasonal factor when they will buy unleaded gasoline going into the summer months when the demand is at its peak and sell heating oil when heating oil demand as at one of its lowest levels for the year but we will have to see if that works once again this summer. I’m advising traders to still sit on the sideline in crude oil and unleaded gasoline because there really is no trend at this point while recommending short positions in the heating oil market because prices could possibly drop-down into the low 2.60 level in the next 6 to 8 weeks. Tensions with North Korea in the last week or so could be propping up energy prices because you never know what North Korea has in mind while tensions with Iran in recent months seems to gotten better but in my opinion they are still going to finish developing a nuclear weapon and one day if they accomplish their goal prices in the energy sector could go sky-high. TREND: MIXED –CHART STRUCTURE: EXCELLENT
Sugar Futures--- Sugar futures sold off this week after rallying sharply last week on a possible port strike in Brazil but was canceled sending prices lower this week still stuck in a sideways channel between 18 – 19 a pound in the last several weeks trading below its 20 day moving average which currently stands at 18.40 and below its 100 day moving average at 18.88 and if you notice these numbers are really starting to tighten up as we continue to move sideways to slightly higher although finishing the week down about 70 points as many of the commodities still remain weak due to a strong U.S dollar. I have been bullish sugar prices and I still think you should be long placing a stop loss at 17.67 which is the contract low risking about $600 per contract trying minimize your risk in case the downtrend continues as gasoline and corn prices are still relatively high which I would think would lend some support to sugar, however sugar has been in a bear market for the last 6 months just like many of the other soft commodities including coffee and cocoa and until a breakout above 19 happens on a closing basis the market basically remains in trendless action. TREND: SIDEWAYS –CHART STRUCTURE: EXCELLENT
Cocoa Futures--- Cocoa futures were slightly lower this Friday afternoon with a possible head and shoulders bottom on the daily chart in my opinion trading at 2155 up around 40 points for the week still trading above the 20 day moving average but below their 100 day moving average which stands at 2281 right near 4 week highs and with excellent chart structure in my opinion I believe that cocoa has finally bottomed with production coming in next year to be rumored to have less production than what was expected and the seasonal rally might start to happen now that the harvest in West Africa is almost finished . If you look at the cocoa chart in the last several months just continually grind lower but at this point I do think that a possible bottom could be developing with a nice head and shoulders bottom so at this point I’m advising traders to take a shot at the upside buying the May contract placing a stop below the contract low which is 2038 which happened on 3 – 6 -13 limiting your risk to around $1,200 per contract if you are wrong and the trend does continue its downturn. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Orange Juice Futures--- Orange juice futures are currently trading at 138.15 in the May contract still trading above its 20 and 100 day moving average stuck in a really tight 2 week channel between 140 – 135 in a volatile trading week still near 11 week highs with a developing chart structure allowing you to place a stop loss below the 135 level if you’re looking to take a shot at the upside. There was a forecast from the NOAA that a dryer spring and summer could continue to hurt the orange juice crop as losses are starting mount from greening disease and that is why you seen higher prices in the last several weeks ,however the weather in Brazil which is a huge producer of orange juice is doing very well at this point so you should see an excellent crop and as I’ve stated in many previous blogs I still believe orange juice prices are headed higher and I would place a stop below 135 in case the trend does change limiting your risk at this point to about $700 per contract. There is major support in the orange juice at 110 which was hit there many times and there’s major resistance at 145 but in my opinion the trend is your friend in the commodity markets and the trend is higher in orange juice and all that is happening is a nice consolidation after the recent run-up in prices. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Cotton Futures-- Cotton futures had a disappointing week after hitting new yearly highs last week all on disappointing export sales which showed exports down about 40% from last week trading right now at its 20 day moving average with a possible short-term top settling last Friday at 92.50 down around 500 points trading lower for the 4th consecutive trading session waiting for the USDA planting intentions next week to dictate short-term price. I’ve been very bullish the cotton market for many months and I still think that cotton could head higher, however at this point I would place a stop loss at 86.50 if your long in case the trend does change but at this point I think it’s just a retracement with prices getting a little bit ahead of themselves with the sharp run up in prices last week. There is still solid demand coming out of China and the rest of the world, however prices have increased by about 30% in the last couple of months so we are probably going into a sideways pattern headed into spring and summer planting with weather conditions down in the south very favorable at this time but the excitement will start to happen in the spring and summer months in my opinion. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Coffee Futures-- Coffee futures finished this Friday afternoon on a positive note closing at 136 a pound up 200 points for the trading session finishing higher for the 3rd straight day but still right near 2 ½ year lows as the bear market continues finishing down around 100 points for the trading week. Coffee futures on the daily chart has excellent chart structure so if you are willing to stick your neck out you will be able to place tight stops limiting your monetary loss in case you are wrong and at this point there is still talk of a tremendous crop coming out of Brazil which is keeping a lid on prices despite the fact of rust problems in Central America a bad drought in Vietnam which is reducing their crop forecast but Brazil’s crop could be so huge as traders are unwilling to stick their neck out on the upside at this point. As I’ve stated in many previous blogs I was bullish coffee and I was wrong, however the longer we start to grind lower like we are at this point with no volatility going into the volatile frost season I still believe if you have deep enough pockets and you are willing to take a longer-term view coffee prices I believe will reward you in the long run because I do believe prices will be higher 12 months from now than they are at these depressed levels even producers in Brazil are starting to complain that prices are getting to low and are starting hold back some of their crop eventually that’s what happens with prices get to low and if prices get too high producers often produce too much sending prices lower but at this point prices are so low that production in my opinion will start to decrease. TREND: LOWER –CHART STRUCTURE EXCELLENT
When Do You Add To Your Winning Trade?
This has always been a very interesting question because it can create a situation of going from rags to riches or from riches to rags in a very short amount of time. Many times I see traders abuse pyramiding or adding to positions with utter lack of any type of money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse. Commodity prices can move very quickly with large gains or loses like we experienced in the 2008 crash of stock and commodity prices, so you always have to use stops and not fall in love or marry a position. In my opinion the answer to this question is add only once to the trade if that position has made you at least 1%-2% of your account balance while still having stop losses on all positions that equal 2% loss at a maximum risk. Remember your stop loses will be different on both positions because of the fact that you entered those trades at a different date and price.
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