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 are trading higher for the 2nd consecutive trading session ending the week slightly higher finishing up $13 this Friday afternoon at 1,253 near a 4 week high as there’s a possibility that gold prices have bottomed in the short term as 1,180 could be a double bottom. Gold is trading above its 20 day but below its 100 day which tells you the trend is mixed and I would still sit on the sidelines and wait for a real trend to develop at this time as I think there still a possibility of another retest of the 1,180 as the U.S dollar looks like it has bottomed and that might put some pressure on gold once again. The short term trend in gold is higher as well as the short term trend in silver and I am a trend follower so if you’re looking to get bullish the gold market I would buy a futures contract and place my stop below the contract low of 1,180 risking $70 or around $2,400 on a mini contract because if prices due break that level I would have to think that the bear market will continue. There has been tremendous demand for physical gold from China and India and that is what is been propping up prices recently as prices are up about 2 ½% to start 2014 after dropping around 32% last year as investors are thinking that prices are relatively cheap.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Silver Futures
Silver Futures--- Silver futures ended on a positive note this Friday afternoon in New York finishing higher by $.25 to close at 20.31 an ounce right near 8 week highs as silver prices look to break out possibly as early as next week in my opinion. If you were reading any my previous blogs I do believe that silver prices have bottomed with excellent chart structure I’m looking for a close above 20.67 to enter a futures position while placing my stop below $19 as I think prices are relatively cheap with demand as solid as it is currently. The silver chart has excellent chart structure with the slow grind to the upside and I do believe in the next couple of weeks silver will be trading in the $22/$23 range and if you’re a long-term investor I still think silver has a chance one day to trade back up in the $40/$50 range as inflation will come back one day especially with worldwide money printing it’s just a matter of when.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Soybean Futures
In all of my previous blogs I have been focusing on the March soybeans but from today on I’m going to focus on the new crop which is the November soybeans which are basically unchanged this Friday afternoon in Chicago at 11.24 a bushel up over $.24 for the trading week after cracking $11.00 last Friday as traders are concerned about another massive crop in South America pushing prices lower and another massive crop here in the United States come springtime. I have been bearish the grain market for quite some time but the soybeans continue to be stubborn in the front month beans which is the March contract and are still hovering near recent highs as the real weakness has been in corn and wheat, however I do believe if you’re looking to get short soybeans focus on the new crop which is November as prices are continuing their downtrend in my opinion throughout the next several months. If you’re looking to get short the November contract my recommendation would be to sell futures at today’s price while putting my stop at the 10 day high which is 11.32 risking around $600 which is putting the risk/reward situation in your favor and that’s what I like to look at when I make a trade.
TREND: OK
CHART STRUCTURE: OUTSTANDING
Corn Futures
Corn futures in the March contract finished lower by 4 cents at 4.24 a bushel finishing the week down about 10 cents after the sharp rally last Friday due to the USDA report. I remain bearish corn as now the same thing has now happened in the last 3 USDA reports where prices had a sharp 1 day rally and then fade away and make new lows as I think prices will re-test $4.00 a bushel soon as wheat and corn have large supplies and both are in strong secular bear markets. Corn is trading below its 20 and 100 day moving average and if you are bearish I would sell a futures contract and place my stop above the most recent high of 4.35 risking around $600 if you are wrong. Corn prices in my opinion will continue to move lower as the corn harvest in South America will start in 2 months while there could be another huge crop in the United States this fall which could put corn prices under $3.00 a bushel in my opinion. If I was a farmer I would be hedging my corn crop because prices could drop 25%-30% come harvest time.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING
Wheat Futures
Wheat prices continue to be 1 of the best trends in recent months as the trend seems to get stronger and stronger and I have been recommending a short position for a long time and continue to be bearish as prices could break $5.00 soon on supply issues and great crop conditions around the world which should continue to push prices even lower. Wheat is trading below its 20 and 100 day moving average as the chart structure remains excellent allowing you to place your stop loss at the 10 day high booking profits. If you are looking to add more contracts to the downside just make sure you have a proper risk management system on the additional contracts.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING
Copper Futures
Copper prices continue their sideways to higher trend on the strengthening of economies around the world increasing demand for copper but I am recommending sitting on the sidelines and waiting for a better chart pattern to develop as this is a weak trend.
TREND: MIXED
CHART STRUCTURE: POOR
Coffee Futures
Coffee Futures--- Coffee futures were lower by 350 points in New York this week currently trading at 117.15 pound consolidating the recent run-up in prices and still hovering around 4 month highs. The chart structure in coffee is excellent at this current time and if you’re looking at trading with the trend and buying the futures contract my recommendation would be to buy at today’s price placing a stop loss below the 10 day low or if you’re looking to get short this market and think prices have topped out and the bear market will come back I would sell a futures contract and place my stop loss above the 10 day high risking around $1,100 per contract.Many of the commodities have started to rally as all bear markets do come to an end but I’m not convinced at this time that coffee is just going to continue to move higher while I think we will see choppiness ahead but the trend currently is higher and I like to trade with the trend.
TREND: HIGER
CHART STRUCTURE: EXCELLENT
Sugar Futures
The sugar market sold off another 35 points this week to close around 15.22 a pound as prices may have gotten into oversold territory but I still think that prices are headed lower as this trend is strong to the downside. Sugar prices are trading below their 20 day and trading way below their 100 day moving average by 200 points which tells me that this bear market is powerful to the downside so continue to sell rallies and place your stop loss at the 10 day high in case the trend changes.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
U.S. Dollar Index
The U.S dollar rallied this Friday afternoon in the March contract by 35 points trading at a 7 week high and still above its 20 & 100 moving average with excellent chart structure on the daily chart showing bullish strength in my opinion despite last week’s price action trading at 81.40 up around 60 points for the week. I remain bullish the U.S dollar because I believe higher interest rates are coming soon in the United States while low rates overseas might continue much longer putting downward pressure on the Euro currency. I have been recommending traders to take a long position buying a futures contract placing a stop below the 10 day low which was just hit on January 14th at 80.54 risking around $800 per contract as I do think the momentum will continue to the upside here in the short term. I also remain bullish the U.S dollar versus the Japanese Yen as the Japanese government has fallen in love with printing money so look for the Yen to head back into the mid-80s in the next 6 months so look at either futures contracts or look at bear put option spreads which limit your risk to what the premium costs.
TREND: HIGHER
CHART STRUCTURE: OUTSTANDING
S&P500 Futures
nvestors came back into the S&P 500 reversing sharp losses earlier in the week pushing up S&P 500 in the March contract to 1837 after hitting a 3 week low in Mondays trade as investors were getting concerned about higher interest rates and a sluggish U.S economy spurred on by the jobs number which was construed as very poor last Friday. The S&P 500 has been going sideways in the last 3 weeks as I do believe we will continue to trade sideways digesting the recent run-up in prices as the S&P finished the year up around 30% which is remarkable so it doesn’t surprise me that will chop around for a while but I still remain bullish this market as it’s the only game in town despite the fact that interest rates are rising they are still relatively low historically as the only returns lately have been coming from the stock market. We're in the midst of earnings season so it will be interesting to see if companies beat expectations as holiday sales were rather disappointing sending many retailers lower but I still think after this consolidation and a possible 3% to 5% decline which is very small that this market will continue to move higher and have another solid return come Christmas time. The S&P 500 is trading above its 20 and 100 day moving average with outstanding chart structure and if you’re looking to get involved in this market I would probably buy a futures contract and place a stop under yesterday’s low risking around $1,200 if your trading the mini which is $50 a point or if you’re looking to get short this market I would sell at today’s price of 1837 place a stop above the contract high at around 1850 risking around $650 as I think those are 2 solid trading thoughts with limited risk remembering the fact that must always have an exit strategy in case you are wrong.
TREND: SIDEWAYS -HIGHER
CHART STRUCTURE: EXCELLENT
Live Cattle Futures
Lean hog futures for the April contract are trading above their 20 and 100 day moving average despite the quiet day in Chicago today. Prices in my opinion look to break out to 4 week highs and my recommendation would be to buy a futures contract at today’s price of 92.00 a pound while placing my stop below Tuesday’s low 89.80 risking around $900 per contract as this chart has outstanding chart structure and it looks to me that hog prices are looking to catch up to the crazy cattle prices as the bull markets in the meats continue in my opinion. This market has been coming down in recent months but I’m a technician and I look at the charts and my risk reward situation and I like the fact that we had triple bottomed in hog prices and I do think they will start to rally with cattle prices, so take a shot at the upside on this while making sure that you have the exit strategy in place.
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
Feeder Cattle
Feeder cattle prices continue to trade right near all-time highs as the August contract was basically unchanged for the week settling at 171 following the coattails of the live cattle market and the funny thing is most of the traders I know at this current time are short the cattle markets not believing prices can go higher and that tells me that prices can go higher as the blow off top has not been created yet but I think is starting to form in the live cattle market. Feeder cattle futures prices are still trading above their 20 and 100 day moving average with very little volatility in the market that historically is very volatile but at this time the market is at the same price it was 4 weeks ago. The live cattle really exploded this week and remember when you trade commodities you want to trade with the trend so I would continue to be long the cattle market at this time.
TREND: HIGHER
CHART STRUCTURE: OUTSTANDING
Rounding Top & Bottom Formations---LOOK AT THE MARCH OAT CHART----Rounding bottom chart patterns in the commodity markets are considered as a bullish signal which indicates a possible reversal of the current downtrend to a new uptrend and generally takes at least 1 month or longer to form so patient is a virtue when you are looking for rounding bottoms, however these indicators can be profitable because in my opinion they are 1 of the best trading indicators out there. These rounding bottom chart patterns in the commodity markets are a long-term reversal patterns that signals a shift from a downtrend to an uptrend. This pattern can also be used as a rounding top signaling that prices have peaked and look vulnerable to the downside. They are elongated and U-shaped, and are sometimes referred to as rounding turns, bowls or saucers. The pattern is confirmed when the price breaks out above its moving average which also is considered a bullish trading indicator especially if the chart pattern breaks the 20 & 100 moving averages.
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
[email protected]
CONGRATULATION VERY INTERESTING COMMENT ! MANY THANKS JDEF