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 Metals--- The precious metals in New York sold off sharply with gold down nearly $36 an ounce to settle around 1,433 down nearly $35 for the trading week which is basically all in today’s session as the U.S dollar has rallied sharply in 2 days while the Japanese Yen is hitting a 5 year low selling off nearly 300 points in the last 2 trading sessions. Gold futures for the June contract are trading below their 20 and 100 day moving average right near a 3 week low still extremely volatile and very choppy and I’m still advising traders to sit on the sidelines at this point in time and there still the possibility that gold could retest the mid-1300s before stabilizing. Silver futures were down about $.35 for the trading session after settling last Friday at 24.02 down nearly $.40 for the trading week trading below their 20 and 100 day moving average and still basically stuck in a 3 week channel really in a directionless trade I’m also advising traders to sit on the sidelines in this market until it has improving chart structure. Copper futures were one of the bright metals this week trading above its 20 day moving average but below its 100 day moving average which is currently at 3.56 pound after settling last Friday at 3.31 finishing slightly higher for the week which is impressive in my opinion since many of the commodity markets this Friday were sharply to the downside. The U.S dollar hit an 8 week low 4 days ago and has now rallied 150 points in 2 days and is right near contract highs once again as investors are flocking into the dollar as a flight to safety. The precious metals at this point in time in my opinion are too volatile with giant swings higher and lower throughout the week but things will settle down eventually and that’s when I would start to look into this market once again because I do like chart structure allowing you to place tight stops in case the trend does change try to minimize your risk but the swings are so large that your stop losses have to be too far away with too high of risk. TREND: SIDEWAYS-LOWER –CHART STRUCTURE: TERRIBLE
Grain Futures--- The grain market moved lower this Friday afternoon as a bearish USDA report came out pushing November soybeans down about $.13 settling last Friday at 12.21 down around $.15 for the trading week as estimates came out at 265 million bushels in U.S ending stocks above the 236 estimate sending prices lower this afternoon still stuck in a sideways to lower chart pattern. Chart structure is starting to return on the daily chart in soybeans as we enter summer in a couple of weeks with volatility increasing more dramatically throughout the year than it is right now with the 2012/13 soybean carryover at 125 million bushels which shows you what an increase in supplies this year due to the fact that we could have a record harvest putting supplies back up to relatively normal levels. December corn was down another $.13 at 5.28 as planting is increasing dramatically here in the Midwest which is putting pressure on prices trading below its 20 & 100 day moving average with U.S ending stocks for this year at 2 billion bushels slightly above the estimate while much higher than last year which was 759 million bushels almost a 300% increase due to the fact there could be a 15.5 billion harvest this fall. Corn futures settled last Friday at 5.53 down $.25 for the week still sideways and choppy and I’m still advising traders to sit on the sidelines and wait for some type of pattern to develop. Wheat futures were down sharply this Friday afternoon finishing lower by $.20 at 7.03 a bushel trading below its 20 and 100 day moving average as the estimates were above what was expected at 670 million bushels vs. 627 million estimate with the report basically bearish most agricultural markets this afternoon while many of the commodity markets as a whole were also sharply lower which also put some pressure on grain futures today. The grain market has been very choppy in recent weeks and I’m still advising traders to sit on the sidelines and wait for some type of pattern to develop which still might be a couple weeks away. TREND: SIDEWAYS –CHART STRUCTURE: AVERAGE
Energy Futures-- The energy markets were sharply lower in early trade only to rally towards the closing bell after climbing to new recent highs earlier in the week with crude oil still trading above 20 and 100 day moving average in the June contract despite selling off $3.00 a barrel at 1 point today before settling around 96.10 down only 28 cents this afternoon while settling last Friday at 95.61 and for the week trading slightly higher. Major resistance in the June crude oil is between 97 – 99 and I’m still advising people to sit on the sidelines in this market because of the choppiness and extreme volatility on any given day so wait for some chart structure and volatility to slow down before reconsidering a new position. Heating oil futures for the June contract are trading above the 20 day moving average but below their 100 day moving average which stands at 3.00 gallon settling last Friday at 288.50 trading slightly higher for the week at 2.90 still in a directionless trade while unleaded gasoline which could possibly have a triple bottom formed on the daily chart is trading above its 20 day moving average but below its 100 day moving average which stands at 2.96 trading lower by 300 points this afternoon at 2.86 a gallon. Unleaded gasoline futures settled last Friday 2.8250 a gallon slightly higher for the week and what looks to me as a bottoming pattern but when the U.S dollar moves 150 points in 2 days it is very difficult to have the commodity markets rally and that is exactly what is happening this Friday. The commodity markets were sharply lower across the board today pressuring metals, grains, and even the treasury markets which have been a strong bull market recently with traders liquidating everything but the S&P 500 once again today. I do believe going into the summer months that the unleaded gasoline market could make moves towards the $3 level once again in the summer months when demand increases and if there are any problems overseas with Syria or Israel prices could start to climb quickly, however we do have large supplies and this truly will be a battle between the bulls and bears to see where prices are headed. TREND: SIDEWAYS –CHART STRUCTURE: TERRIBLE
5 Year Notes—The Five-year notes sold off sharply today closing down 10 ticks at 124.00 trading below its 20 but above its 100 day moving average hitting a fresh 5 week low as investors are finally rotating out of bonds and putting those funds into the stock market. In my opinion I might be sticking my neck out here if you look at the five-year note on a one-year chart it has been consolidating between 123-124 since last September which is now a 8 month consolidation and I do believe we will break the 123 level here in the next couple of months all due to the fact that I think there will be a rotation out treasuries headed into stocks and I do think stock markets around the world will continue to move higher. If you have a longer-term horizon I think selling the 5 year notes at this point in time yielding 0.75 is an excellent opportunity to take advantage selling near all-time highs while the all-time low in this market was 0.59 which happened last year and I don’t believe you will go down to those levels again and once U.S treasury stops purchasing treasuries yields could go much higher in my opinion. The five-year note is probably one of the most conservative trades there is because since the fact that is yield is so small and it has little volatility a good move in the five-year note is about 10 ticks which is around $325 profit or loss on that day but there are many days were it moves 1 or 2 ticks so this is a very good investment vehicle for somebody who doesn’t like to take on a lot of volatility. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Coffee Futures-- Coffee futures sold off this Friday afternoon after an impressive rally finishing higher 6 straight days before profit taking ensued today finishing down a little over 300 points at 144.45 a pound right near 9 week highs as we enter the frost season in Brazil which is starting to put some volatility back into this market. There is the possibility that a short term bottom has been formed as we enter the volatile season and I’ve stated in many previous blogs I think volatility will start to get much larger from levels we see today settling last Friday at 140.90 finishing up about 400 points for the week continuing its short-term trend to the upside. The daily chart in coffee has excellent chart structure and if you’re looking to either buy or sell this market you can place a relatively tight stop loss in case you are wrong on the trade but eventually in my opinion I think coffee prices have bottomed after a three-year slide to the downside with the possibility the trend has changed. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Sugar Futures-- Sugar futures are slightly lower today trading at 17.43 a pound in the July contract still stuck in a 6 week channel right near a 3 year lows as large supplies coming from Brazil are keeping a lid on prices at this point in time. This market has been grinding lower for quite a while and eventually could start to rally especially with crude oil prices right near yearly highs which could start to push the sugar market higher as bear markets always come to an end just like bull markets always come to an end and this market has been going lower for 3 years and could still head lower, but at this point in time I think the commodity markets are bottoming and I would look for buying opportunities in many of these markets. Sugar has outstanding chart structure so even if you’re bearish or bullish you can place a tight stop minimizing your risk in case the trend does change and remember the longer the consolidation the more powerful the breakout. TREND: SIDEWAYS-LOWER –CHART STRUCTURE: EXCELLENT
Cocoa Futures-- Cocoa futures in New York sold off today with the rest of the commodity sectors pushing prices to a 3 week low down 50 points at 23.00 unable to stay near 4 month highs which were trading earlier in the week settling last Friday 24.16 down about 116 points for the trading week with a possible short-term top developing. I’ve been recommending buying cocoa for quite some time but now that prices have hit a 3 week low I’m neutral on this market and wait and see what develops in the next couple of weeks before entering and in my opinion many of the soft markets may have bottomed in the recent weeks. The harvest in West Africa is over and that is why you saw a rally from 2050 to about 2450 in about 3 months based on a seasonal factor because when harvest ends prices generally move to the upside but with many markets lower today including energies, precious metals, and the grain market its difficult for cocoa to rally. TREND: SIDEWAYS-LOWER –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