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 today were lower across the board after rallying sharply higher in early trade only to reverse and sell off towards the closing bell finishing lower for the 1st time in 4 trading sessions finishing down $8 an ounce in the June contract at 1,454. There has been extreme volatility lately finishing higher by $60 dollars for the week bucking its bearish trend and as I've been stating in previous blogs I remain bearish the precious metals, however I do believe gold will remain choppy and try to consolidate the huge collapse that we saw last week. Gold futures are currently still at 1 1/2 year lows which is also pushing silver down $.30 in the July contract at 23.82 an ounce finishing up slightly for the trading week and is now trading over $4 from its 20 day moving average and over $8 from its 100 day moving average and as I've stated before the further away you trade for moving averages the stronger the trend and I do believe there could be a possible retest of $21 which was last week's low here in the next week or so as commodity prices continue to be weak as money continues to flow into the S&P 500 and U.S treasuries. Copper futures which I have been extremely bearish down another 600 points at 3.18 a pound and is now sharply lower than its 20 and 100 day moving average hitting a 1 1/2 half year low and if prices break 3.00 you are looking at fresh 3 year lows as record inventories are putting pressure on prices . In my opinion I believe copper prices are headed sharply lower from these levels and I'm advising traders to be short the entire precious metal sector with the strongest leader to the downside in copper. Copper futures also have a mini contract which is $125 a point which is better suited for some smaller accounts or traders want to take on less risk so I am still advising to stay short this sector as money is rotating out of the precious metals into the S&P 500 as earnings have been very strong once again.TREND: LOWER –CHART STRUCTURE: TERRIBLE
Grain Futures--- The grain market was mixed in the new crop grains today continuing their bearish momentum despite the fact that there has been a record freeze and the coldest start ever wheat growing areas of Kansas and the Great Plains which could damage some of the U.S crops as the U.S farmers are the largest exporter in the world and might abandon around 25% of their hard red winter wheat which is the most common variety grown and that would be the most since the drought of 2006 which could initiate a rally in the new crop wheat later in the spring. The grain market doesn't seem to be listening to this fundamental news with wheat down another $.13 continuing its bearish movement at 6.90 a bushel in the July contract also pushing December corn down to a new contract low at 5.23 a bushel down another $.8 as I've been stating in many previous blogs I am extremely bearish the grain market. I am a technical trader not a fundamental trader so prices look to me that they're going to head sharply lower from these levels and I'm still recommending short positions across the board. November soybeans were higher for the 2nd consecutive trading session trading up 5 cents and reversing earlier losses to settle at 12.10 heading towards major support at 11.80 and the contract low of 11.40 in my opinion I think we will be there in the next couple of weeks. The planting situation in corn is pretty poor at this point with many states not even planting anything yet while you think that would be bullish especially when the state of Illinois which is a huge corn grower is currently at 1% planted, however traders are expecting warm and dry weather and farmers back in the field and able to make up the difference quickly. With a 15.5 billion crop possibly coming in October prices still could head sharply lower from these levels. If you are a farmer I strongly recommend this year to be hedging your crops because there could be a significant price drop. Prices could even get much uglier and if you at least by put protection underneath to guarantee a certain price you will be able to sleep at night not worry about at collapsing price with many of the commodity markets sharply lower once again today as the trend continues to sell commodities and buy U.S treasuries and the S&P 500.TREND: LOWER –CHART STRUCTURE: EXCELLENT
Energy Futures--- The energy market continued their volatile trade this week with crude oil rallying over $8 dollars from last week’s lows finishing down 50 cents a barrel at 93.10 and as I’ve been recommending in many previous blogs I think the energy sector is outrageously overpriced especially in crude oil with 23 year high inventory levels & waning demand and deflation across the globe especially in China pushing prices sharply lower once again and I do believe that crude oil will be trading at $75 a barrel within the next couple of weeks in my opinion. Unleaded gasoline which finished higher for the 3rd straight trading session rallied slightly today by 150 points at 2.83 a gallon with the next major support at 2.50 which is still quite a distance away and I still believe we are headed to those levels. Heating oil finished higher by 30 points in the May contract at 2.89 a gallon and if anybody has been listening to me in previous blogs I am extremely bearish heating oil as we enter the summer months with huge supplies going into summer when heating oil demand is at its lowest with a general malaise in the commodity markets as investors are fearing prices could head much lower remembering the fact that these prices are still elevated over the 10 year average. In my opinion I’m still recommending short positions in every single commodity especially in crude oil because I believe there is significant downside to this sector.Remember you when you trade commodities you will be wrong sometimes so you must put a stop loss and not marry your position because never getting out causes exaggerated monetary losses so always risk between 1-2% of your account balance on any given trade trying to minimize risk. TREND: LOWER –CHART STRUCTURE: TERRIBLE
Coffee Futures--- Coffee futures in New York today are down 340 points currently trading at 133.65 a pound hitting a new 2 ½ year low on waning demand and increasing supplies trading below its 20 and 100 day moving average trading lower by nearly 800 points for the trading week . Coffee futures hit a 4 week high only to come right back down and break contract lows and it looks to me that prices are headed down to the 120 level in the next couple of weeks. As I've stated in many previous blogs I am bearish the commodity markets because I do believe that deflation is in the air and lower prices are ahead for the next 4 to 8 weeks. I'm advising traders to go short coffee placing a stop above the 10 day high in case the trend does change therefore minimizing your risk.TREND: LOWER –CHART STRUCTURE: EXCELLENT
Cocoa Futures--Cocoa futures are rallying despite a pessimistic commodity market this afternoon up another 6 points in the July contract currently trading at 2366 while finishing higher by nearly 40 points for the week trading above its 20 & 100 day moving average hitting a 4 month high with excellent chart structure looking to test major resistance at 2450 and is probably one of the only bull market's out of the entire commodity sector at this point. Cocoa prices bottomed about 6 weeks ago as the West African harvest has been completed so there could be a seasonal low as traders are expecting less production of cocoa next year pushing prices higher once again as I've been advising traders to be long cocoa placing a stop below the 10 day low therefore booking profits in case the trend does change. The one fact that makes me nervous about the cocoa market is that I'm very pessimistic about all of the commodities and if they continue to fall eventually that could put some pressure on cocoa but right now it is showing some real strength and the trend is your friend so I would still stay with long positions.TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Sugar Futures---Sugar futures are basically unchanged this afternoon currently trading at 17.40 breaking out to a new 2 ½ year low trading below its 20 & 100 day moving average and as I've stated in previous blogs I am bearish sugar prices and I am recommending a short position putting a stop above 18.02 in case the trend does break out to the upside but at this point in time I still believe that the trend in the commodity markets and in sugar prices are lower. With a record harvest coming out of Brazil and supply rising every single day that is keeping a lid on prices here in the short term even though the fact that Brazil has pushed up their mandate for ethanol production using sugar trying to reduce some of the supply surplus but that is still not having an impact on prices and I do believe we will head down to the 2010 lows of 14.50 a pound here in the next couple of months. The daily chart in sugar has outstanding chart structure allowing you to place very tight stops if you are bullish or bearish limiting your monetary loss due to the fact that your stop loss could literally be within 30/50 points away which is between $300 $500 a contract allowing you to speculate with limited risk. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Orange Juice Futures-- Orange juice prices this afternoon are also down 350 points in the July contract trading at 141.10 hitting a 3 week low finishing lower by 500 points for the trading week now trading below its 20 day moving average but still above its 100 day moving average as orange juice prices have been heading higher in recent weeks due to greening disease affecting the orange juice crop which has prompted prices higher ,however with a pessimistic commodity market again this morning traders are booking profits and not necessarily going short the market but they are taking profits in getting out of the market as open interest has been declining. Remember orange juice is a very thinly traded commodity and can move very violently at times due to weather conditions or crop reports so in this market I always suggest using a stop loss if you are planning on speculating in orange juice prices. At this point in time I'm advising traders to sit on the sideline because I don't really think there's much of a trend here and wait for something to develop with better chart structure as we’ve had big moves up and big moves down and those are the markets I try to avoid. TREND: NEUTRAL –CHART STRUCTURE: TERRIBLE
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
2 thoughts on “Weekly Futures Recap W/Mike Seery”
Can anyone direct me to insight regarding cattle and hog futures given an environment where grains are falling, but Elliot Wave projects lower prices for livestock regardless.
Thought this article might be of interest to you. Kind regards, Konrad
Why So Many People Have A Bear Market Mindset In A Bull Market
Apr 26 2013, 14:01 by: Jay Norris Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. (More...)
Market analysts and pundits, like politicians, have never been so polarized. And much like politicians and their more vocal followers, the different factions -- bulls versus bears-- are not always so nice to each other. Rather than "go there," let's look at the potential misconceptions as to why so many are so dissatisfied in the face of such a strong uptrend in U. S. blue chip stocks.
When we compare the potential for growth in the economy now to previous decades, it is clear that to expect 1980s growth now would be unreasonable. Credit cards alone makes this so. In the early 80s, the growth of consumer credit was just getting started. By the beginning of the new century, it was fair to say consumer credit had become saturated. The '80s and '90s saw explosive growth for many reasons, and what is obvious now is that it would be unreasonable to expect that type of economic growth to have continued.
"I need another warm body Jimmy... and make sure this one has most of her teeth." It was 1986, and I was waiting for the manager who had just hired me at a prestigious Wall Street brokerage firm to take me down to the trading floor, where I would start my new position. My manager had just shouted his request to the hiring manager while balancing an unlit cigar expertly between his teeth. "Come on kid," The Cigar nodded as I followed him out the large beveled glass doors, "We only have one rule around here," he continued. "If you want a bonus, ya gotta show up on time. I don't care if you're hung over or still drunk, just show up on time."
I was starting a job where I worked 6 hours per day and made more money than my father, who was an accountant, or any other father on the block where I had grown up. Life was good. When I look back at that experience compared to how kids have it today, there is obviously no comparing that economy to now. Back then, companies enjoyed the American mark-up. Goods were bought overseas in local currencies -- dimes on the dollar -- shipped to America -- energy prices were laughably low -- and marked up 200%, and this was even before the retail mark-up. American companies had a thick layer of middle managers, many of whom did little in the way of work, yet all had nice suburban houses with big backyards and two cars in the garage, and nobody worried about how they would put their kids through college.
The brokerage firm where I worked routinely charged clients $100 commission, per contract, plus consulting fees -- a far cry from today's $2.99 rates. And for as long as I worked there, I never figured out exactly what The Cigar did, other than walk around shaking people' s hands and slapping them on the back, but I knew he was paid well.
I understand why so many market observers don't buy into the current bull market in stocks on the grounds this economy is a far cry from decades past. This particularly makes sense if you think the 1980s and '90s were normal. If you believe economic growth under Reagan and Clinton was normal, then you would most definitely be disappointed with today's economy. In today's economy, profit margins are thinner, and overseas competition much tougher, and you darn well better have more going on than a pulse and most of your teeth to get a good job. If you think that the economy in the 1980s and 1990s was the norm, no wonder you are in the bear camp now. If you happened to work for a company in the right place at the right time back then and confused that with being good, you are more than likely out of sorts in today's economic climate.
"I actually thought I was a great salesperson when I was in my twenties," is how one old friend put it. "The sales skirt and high heels were inconsequential."
Premise #1: The "new normal" in economic growth is far different than the "old normal," i.e., you cannot compare now to then.
But Premise #1 still begs the question of how or why we are seeing comparable stock market growth today to earlier decades? Regardless of thinner profit margins and overseas competition, people still consume, and those people with jobs still save and invest, which means money going into the economy on a regular basis and money going into stocks on a regular basis. And let's not forget the cumulative amount of savings and investments from those previous decades that is now faced with the choice of no interest income because rates are so low. Regardless of age or risk tolerance, you either take zero interest or diversify a portion into growth or blue-chip stocks. And there is another sizable factor. Those executives and managers that still hold good jobs work a lot harder and a lot smarter than their predecessors. All this means a bid in the stock market.
Much of the divisiveness today among market analysts and pundits on a base level is aimed at central bankers. The Republican presidential nominee in 2012, Mitt Romney, who enjoyed great success as a businessman in previous decades, went so far as to say he would replace Ben Bernanke as Fed Chairman if elected, leaving the impression that he believed the country's economic doldrums were the fault of the Federal Reserve and other government policies. The logic of saying a Fed Chairman is not doing a good job in hard times only holds up if one believes that the Fed is/was responsible for fostering the good times. The former central banker and President of the Peterson Institute for International Economics Adam Posen, made an apropos observation in comparing previous good times to current not so good times: "…we ended up in a world where things went very well, and a large part of it was due to luck… and central bankers took credit for things going very well, and insisted that this was due to their marvelous monetary policy."
Posen's comment hint at what a lot of people do not realize, and the few that do are too polite to say. That the Fed chief before Bernanke, the legendary Alan Greenspan, for all his reputation, and measured, thoughtful cadence did us all a disservice by letting us believe that the incredible growth the U.S. saw throughout the 1990s and into the 2000s had a good bit to do with the Fed's tutelage. What if central bankers were no different than so many others during the previous expansions, just people in the right place at the right time? And if they were, and are not due so much of the credit for good times, then it stands to reason we should not hold them as responsible for tough times.
Posen's observation leads to premise #2: We cannot hold central bankers solely responsible for the performance of the economy.
At some point, private businesses must make money the old-fashioned way, which means borrowing money and taking the risk of investing it in viable businesses that can produce modest near-term returns. The Fed does not grow the economy -- business owners and managers taking risks grow the economy -- and not the type of risks that cost JPMorgan Chase (JPM) $8 billion dollars in trading losses.
We all might have been better off had we realized sooner that it's up to businesses to play more of a leadership role, and that central bankers had no choice but to buy their Treasury's debt to keep rates on lock down so that individuals and businesses could refinance debt to free up cash flow. Had that been the case, we may also have realized that there are companies out there, that even in hard times -- or should I say particularly during hard times -- are deserving of investment. Wait a second… maybe that's why the stock price of so many blue-chip companies has increased so much over the last couple of years?
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