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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 in the April contract are trading above their 20 day but below their 100 day moving average which is pretty close at 1,275 going out this Friday afternoon in New York at 1,267 up about $10 after closing last Friday at 1,240 having one of its best trading weeks in quite some time. The next major resistance in gold is at 1,280 and if that level is broken I believe a bull market is underway as the gold market looks like it's finally bottomed entering new 2 month highs as the trend line has now been broken as prices are starting to climb higher. I have not been particularly bullish gold for quite some time but things have changed and this is the most bullish I've been as I love the chart pattern on the daily chart and I think prices have bottomed so if you're looking to take a shot to the upside my suggestion would be to buy a mini contract at today's price placing a stop below the contract low of 1,180 risking around $$2,600 as today's monthly unemployment number was very disappointing once again sending investors into treasury bonds and gold and I do believe gold prices are headed higher. Last year gold was down 32% & was the 1st down year in 12 years and I do think prices may have gotten too low as volatility has now entered the stock market which is pushing money back in the gold sector and I do think prices will hit 1,300 the next couple of weeks as we are in the start of a bull market once again.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Silver Futures

Silver futures are trading above their 20 day but below their 100 day moving average which stands at 20.72 an ounce and that's a critical area because if prices break 20.67 that would be a 3 month high as prices have been in an extremely tight consolidation in the last 10 weeks which is very unusual for silver as prices look to bottom in my opinion. Silver prices settled last Friday at 19.20 settling today at $20 an ounce having one of its best weeks in quite some time and I do think that the precious metal sector has finally bottomed as silver prices look very cheap in my opinion. If you're looking to jump the gun on this market and buy at today's price I would place my stop below the contract low of 18.70 risking around $1,500 on a mini contract but make sure if prices do close above 20.67 to enter this market on the long side placing your stop at the 10 day low because I do believe silver could go into the mid-20s relatively quickly as investor demand is coming back into this market and coming back in many of the commodity sectors. Silver prices were unable to break $19 an ounce on 8 different occasions and that tells me that the market is in a bottoming phase as prices were in the mid-30s in 2013 at one point so prices could definitely rally back up to the summer lows of $25 in my opinion so keep a close eye on this market as a breakout from a 10 week consolidation can be very powerful.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Soybean Futures

Soybean futures in the November contract which is considered the new crop which will be harvested this fall is now trading above its 20 day but below its 100 day moving average as volatility is relatively low as the winter months in the grain market are generally quiet while volatility comes back in the Spring & Summer months as traders await Monday afternoon's crop report with a possible double bottom down at 10.88 which was hit last Friday. There is major resistance at 11.30 as prices in my opinion will chop around in the next several weeks but I still remain bearish this market due to the fact of worldwide supplies will be increasing tremendously and if we have another record crop in the United States prices will drop dramatically in my opinion; however that probably is not going to happen right now as it’s a long growing season. Brazil currently is experiencing hot dry weather and that is pushing up the March contract and that is also helping support the November contract but time will tell to see if there's really any crop production cuts in Brazil due to the hot & dry weather. The chart structure in the November soybeans is outstanding and if you're looking to get short my recommendation would be to sell a futures contract placing a stop above 11.30 risking around $500 per contract or if you're bullish the soybeans you can buy contract at today's price while placing your stop below 10.88 risking around $1,600 per contract. Remember the fact that there is a tremendous difference between trading and investing as I generally write for traders and when prices hit 2 week highs it's time to move on, but if you're a long-term investor & you believe in my theory that prices will head lower come summertime I would recommend that you don't place any stops just trade small so you can withstand some of these false rallies.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT

Corn Futures

Corn futures in the December contract which is considered the new crop which will be planted this spring and harvested this fall is now trading above its 20 day but below its 100 day moving average which stands pretty close at 4.65 with major resistance at this level of 4.60 right near 2 month highs. Corn futures settled at 4.50 last Friday finishing higher by about $.09 as traders await the highly anticipated USDA crop report which will show supply/demand figures as well as the carryover figure which was reduced by 200 million bushels in the last report so we will see what that the new carry over comes out to be and expect high volatility Monday afternoon. I have been bearish corn prices for 6 months at least and right now I'm neutral this market as again when prices hit a 2 week high I get neutral on any short position that I might have so I'm sitting on the sidelines waiting for another trend to develop as many of the commodity markets looked to have bottomed as soybeans in the March contract are right near recent highs and that is also pushing up other grain prices. The oat market in the March contract has seen some extreme volatility with the limit up move of $.20 in Thursday's trade and a limit down moving this Friday at 4.36 and I'm recommending if your long this market to start taking profits because volatility and prices may have gotten too high in my opinion as this has been a terrific bull market, but the chart structure at this time is awful so there's nothing wrong with taking some of the contracts off & letting some of the other contracts run or get stopped out at the 10 day low.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT

Wheat Futures

Wheat futures in the March contract closed last Friday at 5.56 which was a new contract low but rallied this week to settle at 5.77 a bushel up about $.20 as I was recommending a short position for several months and it was a terrific trade, however I was stopped out in Monday’s trade at 5.78 which was the 10 day high & now I remain neutral wheat prices at the current time. Traders are awaiting Mondays USDA crop report as prices are now trading above their 20 but below their 100 day moving average telling you that the trend is sideways, but remember the fact that worldwide supplies of wheat are still very large and I'm not convinced that the bottom is in however when prices hit a 10 day high it's time to move on as you must have an exit strategy in place.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in the March contract are up another 100 points this Friday afternoon currently trading at 87.50 after settling last Friday at 85.83 up about 175 points continuing its bullish trend. Cotton futures are trading above their 20 and 100 day moving average right near 6 month highs and if your long this market my suggestion would be to place your stop below the 10 day low which is at 84.00 as traders await Monday’s USDA crop report which will state carryover levels and supply/demand figures. The interesting thing about cotton at this point is the front month is higher by about 1000 points than the new crop December contract which is only trading at 77.60 & if you look at many commodities the front months are higher than the back months and that tells you there is strong demand for cotton at this time as I remain bullish this market and the stop will be moved higher in a couple of days minimizing your risk but it looks to me that many the commodity markets have bottomed.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures have been the big story in recent weeks due to the fact of a huge rally in the last 2 weeks caused by hot & dry conditions in central Brazil which is causing prices to move much higher as we have not seen a drought since 1989 and there are no rains forecast in the next 7 days which could push prices up even higher. Coffee is trading above its 20 and 100 day moving average settling at 137.85 a pound in the May contract up about 1000 points this week with extreme volatility as Brazil's crop is estimated between 54 – 55 million bags and that could be lowered if this drought continues in the month of February and as I talked about in previous blogs the volatility is extremely high so I would look at bull call option spreads for the month of July limiting your risk to what the premium costs also allowing you to stay in the market without getting stopped out because there are days like Thursday when prices were down 700 points which is around $3,000 a futures contract as the volatility is here to stay and I do think higher prices are coming. The 50% retracement from the recent high to the low is right around 130 so if you’re looking to get into a futures contract I would look to buy that level placing my stop at the 10 day low which currently is at 115 risking around $5,500 per contract. Coffee is a very large contract and if you're right it will pay you off tremendously as I've gone through similar events in this market especially in 1994 when prices went from $.75 to 2.70 in a matter of months due to a frost and if this drought does continue expect coffee possibly getting up to the $2 a pound level as prices could really explode just like what happened in the grain market in 2012
TREND: HIGHER
CHART STRUCTURE: TERRIBLE

Sugar Futures

Sugar futures recently have become very volatile due to the fact of hot & dry weather in central Brazil settling last Friday at 15.55 up slightly for the trading week going out this afternoon at 15.73 and hitting a high price of 16.38 earlier in the week as I was short this market for quite some time getting stopped out at the 10 day high last Friday at 15.51 so I’m on the sidelines waiting for a trend to develop. There is major support in the March contract at 15.50 it’s also the 50% retracement from the recent lows to the highs but I still think you sit on the sidelines and wait for a trend to develop as the fundamentals still are bearish as worldwide supplies are very large but the commodity markets in general look like they have bottomed so I would like to see a couple more weeks with sideways action before entering into sugar so be patient in my opinion
TREND: NEUTRAL
CHART STRUCTURE: POOR

Live Cattle Futures

Live cattle futures in the April contract are trading above their 20 and 100 day moving average however prices hit a 2 week low so I am neutral this market and I've been recommending a long cattle position but when prices hit a 10 day low it's time to move on and sit on the sidelines as prices were basically unchanged for the trading week. Traders are awaiting Mondays USDA crop report which could affect cattle prices here in the short term as prices are still right near all-time highs and is developing better chart structure but at this time wait for another trend to develop before reentering. Feeder cattle prices were up 95 points in the March contract at 168 a pound basically consolidating in the last month as the lowest herds in 60 years have propped prices up right near all-time highs but this market has very low volatility which is very unusual in my opinion especially when prices are this high so I'm also sitting on the sidelines as prices finished down about 150 points for the week as I remain neutral. I have been bullish the feeder cattle and live cattle for a long time and in my previous blogs I thought prices could possibly even hit 150 in live cattle & 190 in feeder cattle & that still might happen but at this time prices have been moving sideways so it's time to look for another trending market.
TREND: NEUTRAL - HIGHER
CHART STRUCTURE: EXCELLENT

Lean Hog Futures

Lean hog futures in the April contract are trading above their 20 and 100 day moving average basically settling unchanged for the week right near 3 month highs at 94.50 a pound and I been recommending a long position in hogs for about a month now as I do think prices will hit contract highs at 96 and possibly go over 100 as there is strong demand. If you entered this market on my recommendation I would place my stop at 92.75 which is about 175 points away or $700 as I want to let winners run and the stop also will rise in the next couple of days as the bull market continues in my opinion. The hog chart had outstanding chart structure and that is why I bought at the 4 week high as I like trading markets with tight consolidations allowing you to place tight stop loss minimizing your risk as I am a trend follower & the trend in the hogs is higher so be a buyer even at today's level making sure you do use the proper risk management of 2% of your trading account balance on any given trade
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Orange Juice Futures

Orange juice futures in the March contract are trading higher by 150 points this Friday afternoon and traded higher by over 500 points for the week as a possible cut in orange juice production in Brazil is pushing prices higher with heat stressing the trees currently. Orange juice prices have not broken out above their channel, however it looks to me that prices are going higher but there is no trend at this point despite the fact that orange juice futures are trading above their 20 and 100 day moving average as prices look to go higher in my opinion. Everything grown in Brazil currently starting to rally due to the fact of the 3rd lowest amount of rain in the month of January which has pushed up coffee prices tremendously while Florida has not had a very good crop due to greening disease so there is a lot of bullish fundamentals which could push orange juice prices higher.
TREND: HIGHER
CHART STRUCTURE: POOR

Cocoa Futures

Cocoa futures in the March contract are higher by another 36 points this Friday afternoon trading at 2922 hitting another 2½ year high as strong demand continues to propel prices higher with outstanding chart structure as prices have consolidated very tightly in the last 2 weeks and if you're looking to get long this market I would buy a futures contract at today's price of 2922 placing my stop below the 10 day low of 2869 risking around $600 per contract as I do think prices are headed higher. I like to trade markets with outstanding chart structure and cocoa in the last couple of weeks has allowed you to get into this market so if you can risk $600 in the cocoa market my suggestion and recommendation would be to get into that market because the risk/reward situation is definitely in your favor as cocoa can have extremely volatile trading sessions just like coffee.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

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. Wolfenheimer says:

    Mr. Seery
    Thanks, you are doing for us a great job !!
    I Always like your opinion.
    Wolf

  2. Kurt T. Bachmann says:

    Thank you for the weekly recap. You only mention crude oil occasionally. Is it possible to cover crude oil more?

    Kurt

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