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Weak

Weekly Futures Recap With Mike Seery

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 rallied sharply off of a disappointing unemployment jobs number coming out this morning stating that we had added 75,000 jobs as we are expecting at around 200,000 sending gold up $16 closing right at session highs at 1,245 an ounce with a possible bottom at 1,180 being formed as traders rushed back into the precious metal thinking that the economy is doing much worse than expected. Gold is still in a mixed trend trading above its 20 day moving average but below the 100 day moving average settling last Friday at 1,239 going out up about $5 for the week and it will be very interesting to see what the next jobs report states if it’s another 75,000 you could be almost be assured that the Federal Reserve will continue its quantitative easing and might even add to it so if you’re bullish gold you’re hoping for another poor unemployment number next month. Remember markets go up and down due to demand and demand for gold on the physical side is high currently, but the other side of the coin the selling the ETF gold market and using that money in the S&P 500 which is performing very well, so at the current time I would still sit on the sidelines and wait for better chart structure to develop.
TREND: MIXED
CHART STRUCTURE: POOR

Silver Futures

Silver futures rallied $.47 at 20.15 in the March contract still stuck in a sideways channel for the last 6 weeks between 19 – 20.55 and in my opinion as I’ve stated in many previous blogs I do believe silver is bottoming with 19 as major support and that’s held almost every single time and I do look for a breakout above 20.55 and I would be recommending to buy a futures contract at that price placing a stop below 19 risking around $1600 on a mini contract as the daily chart has excellent chart structure with a bullish developing pattern. The market reacted to the poor jobs number remembering the fact that silver prices have come down from $50 so everybody has gotten pretty much out of this market and I still believe $20 dollar silver is relatively cheap with today’s expanding economy and global growth starting to occur once again as silver actually does have real value especially when it is used in electronic goods. Silver prices have a mixed trend currently as they are trading above their 20 day but below their 100 day moving average so keep an eye on that major resistance level of 20.55 because I do believe there are buy stops located above that level which could push silver prices to $22 here in the short term.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Soybean Futures

The soybean market rallied 25 cents in the March contract before the USDA crop report which was surprising in my opinion as then the report came out very neutral keeping carryover around 150 million bushels with the bushels per acre around 43 which was pretty much expected . Soybean prices settled up 5 cents at 12.78 and I am still recommending a bearish position in soybeans with either a bear put option spread or sell the futures contract while placing your stop above the 10 day high as an exit strategy. The trend in soybeans is mixed to lower at the current time with major support at 12.40 while the November prices are now trading at 10.99 which is considered new crop which will be planted this summer as traders are nervous about another record crop possibly pushing prices even lower.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Corn Futures

Corn futures for the March contract were sharply higher after a bullish crop report sent traders scrambling to cover their shorts as the carryover and bushels per acre both were lowered significantly propping prices higher but the question are whether this report was a game changer or just another opportunity to sell a false rally. The carryover was listed at 1.61 billion bushels vs an estimate of 1.85 and a whisper number near 2 billion while the bushels per acre dropped from 161 to 159 lending even more support to prices today. I think prices could get up to 4.40 a bushel but the secular bear market continues in my opinion so take advantage of bullish days and sell remembering to use a money management strategy to reduce large monetary loss.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Wheat Futures

The wheat report pretty much came out neutral which was construed bearish reducing exports sending prices near 2 year lows as excellent crops are developing around the world which could continue to push prices lower throughout springtime in my opinion. I have been recommending a short position in wheat for some time and I think you might even want to sell more contracts on the next up day as prices could drop to 4.50 a bushel in the next 6-8 weeks as supplies continue to grow. Wheat futures are trading below their 20 and 100 day moving average showing a strong trend to the downside which is what you are looking for as a trader.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton prices are trading above their 20 and 100 day moving average settling last Friday at 82.94 finishing the week around 82.50 as prices have been consolidating recent gains with the USDA report coming out pretty neutral keeping prices and nonvolatile action throughout the trading session. I have been recommending a long cotton position for a while and if you’re still in this market I would place my stop below the 10 day low as an exit strategy in case the trend does change to the downside.
TREND: MIXED - HIGHER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in New York this week finished up around 400 points currently trading at 120 a pound in the March contract continuing its grind higher finishing near a 12 week high after bottoming out recently at 105 which looks like a short term bottom. If you’re looking to get long this market my recommendation would still be to buy a futures contract to the upside while placing your stop 10 day low which stands at 110 risking around $3,800 per contract if you’re just getting it at today’s prices while coffee is still trading above its 20 and 100 day moving average continuing its bullish momentum with pretty solid chart structure markets to come to a top or bottom and this one was a very big bear market for quite some time.
TREND: HIGER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar Futures-- Sugar futures continue to be one of the best bear markets out of all commodities reversing earlier losses to finish higher for the 1st time in 3 trading sessions still trading below its 20 & 100 moving average as I have been bearish for quite some time as prices could test the May 5th 2010 low of 13.66 a pound. This market continues to have great chart structure with a chart pattern that has basically gone straight down in the last 2 months due to huge global sullies as well as weak demand so continue to be short this market while placing your stop at the 10 day high as an exit strategy.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Orange Juice Futures

Orange Juice Futures—Orange juice futures for the March contract were sharply higher this Friday afternoon trading at 148 op 550 points on crop concerns continuing the bullish momentum in recent weeks and I am recommending a long position in orange juice placing your stop below the 10 day low of 136.80 risking around 1,500 per contract if you are wrong on the trade. Cold temperatures this week down South and for much of the country are bringing in bullish trend followers because if there is serious crop damage prices could still go much higher in my opinion and I believe the risk/reward situation is in your favor.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Cocoa Futures

Cocoa futures are trading below their 20 but above their 100 day moving average with a mixed trend currently while the year 2013 in cocoa was very bullish but may have topped out around 2800 hitting a 6 week low recently and I’m recommending to sit on the sidelines as there really is no trend currently, but if you’re looking to get short my recommendation would be to sell on a breakout below 2633 in the March contract while placing your stop above the 10 day high risking around $1500 per contract as cocoa prices historically are still very high, especially compared to many of the other commodity prices. There had been big demand in cocoa coming up to Christmas time but now you have to think that demand will start to soften as prices are still relatively high but remember when you trade commodities you must have an exit strategy and a money management plan that is why I place my stops at the 10 day high or low depending on what my position is while recommending risking around 2% of your account trading balance on any given trade.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT

Cattle Futures

Feeder cattle prices are trading above their 20 &100 day moving average still trading right near all-time highs with excellent chart structure on the daily chart finishing lower in the August contract by 90 points at 170.40 as corn prices rallied $.20 off the USDA report sending prices lower today but the trend is still higher with outstanding chart structure so you’re still long this market I would place my stop below the 10 day low of 166.75 risking around $1,500 per contract as this has been one of the strongest bull markets in the commodity sector in the last couple of years due to small herds. Live cattle futures for the February contract finished higher by another 40 points at 137.00 a pound still trading above its 20 & 100 day moving average finishing slightly higher for the week right at all-time highs as the bull market continues here in recent weeks. Cold temperatures throughout the Midwest in the last week are causing concerns of cattle deaths reducing supplies once again but these prices are extremely high while prices at the grocery store might shock you.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Lean Hog Futures

Lean hog futures in the February contract are trading right at their 20 but below their 100 day moving average right near 5 month lows basically unchanged for the trading week and if you’re looking to get short this market as the trend is currently lower I would sell a futures contract at 86.00 placing a stop above the 10 day high at 87.50 risking around $600 per contract as hog prices have been much weaker than cattle prices currently and I do think the risk reward is in your favor whenever you can risk $600 dollars on a hog contract that’s pretty solid money management in my opinion because if you are correct on the trade what you’re hoping to do is at profit at least 3 times what your risking which would be a $1800 profit potential.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Crude Oil Futures

Crude oil futures finished on an up note this Friday afternoon in New York finishing up a $1.00 at 92.62 in the February contract after dropping over $8 in the last 10 days as the December rally fizzled out very quickly to the fact that we have huge supplies of crude oil and I still do believe prices are headed lower despite the fact that we already are at fresh 7 month lows as the next major support in crude oil is at $90. The problem with crude oil is that it has terrible chart structure because prices went straight up and straight down but continue to play this to the downside in my opinion, as prices still look weak with oversupply and the trend is lower with crude oil trading below 20 &100 day moving average which tells me the trend is still to the downside.

Heating oil futures for the February contract are trading below their 20 and 100 day moving average despite the bitter cold throughout much of the country prices have hit a 6 week low finishing down about 300 points for the week at 2.91 a gallon with major support at 2.85 and if prices break that level you have to think that a bear market has taken place, however this chart has awful chart structure so at this point in time I’m advising traders to sit on the sidelines and wait for a better chart pattern to develop.

Unleaded gasoline futures in the February contract also trades below their 20 and 100 day moving average hitting a six-month low and I’m advising the sit on the sidelines in this market as well. Prices rallied 20 points in December but now collapsed 20 points in the beginning of 2014 which tells me this market has terrible chart structure which could whipsaw you to death so wait for better chart structure to develop & tighter trading ranges allowing you place a tight stop minimizing your risk in case you are wrong.
TREND: LOWER
CHART STRUCTURE: AWFUL

Where Should You Place Your Stops? Identifying where stops exist in the market is an important lesson to learn because placing a correct stop loss that will improve your trading tremendously over the course of time. Nobody knows for sure where stops are located, however I have learned a couple of things over my 20 year career and I have a general idea where stops are placed and why. Buy stops are generally placed above the 10 day high as well as above contract highs as the bulls generally are buying more and the short selling are getting stopped out. Sell stops are usually placed at the 10 day low as well as below contract lows which means the shorts are adding to their position and the longs are getting stopped out as they figure they are wrong. The other common places to have stops are at certain moving averages such as the 20 or 100 day moving average where traders think either the trend is turning bullish or the market is starting to break down. Placing stops to close or not at important price levels can get very frustrating because the market can stop you out and then go the direction that you thought leaving you behind and out of the market. Placing stops is one of the most important aspects of trading in my opinion.

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
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: (800) 615-7649
mseery@seeryfutures.com

Comments

  1. ginny says:

    Hi Dennis, The SP 500 has done exceedingly well this past year, much better than the economy. What's going to drive it up this time, the hope of an increase of QE. AA sure didn't being the earnings season well, and I can't imagine an overwhelming earnings season. I'm not doubting your forecast, but the market and the economy are at great odds.

  2. Dennis King says:

    Regarding the stock market, it was the usual Friday trading despite poor news. Next 7-10 days watch for a downdraft to as low as 1796 basis the SP 500 before it starts shooting up to new highs.

    • ginny says:

      Hi Dennis, The SP 500 has done exceedingly well this past year, much better than the economy. What's going to drive it up this time, the hope of an increase of QE. AA sure didn't being the earnings season well, and I can't imagine an overwhelming earnings season. I'm not doubting your forecast, but the market and the economy are at great odds.

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