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.
Grain Futures--- The grain market continues their bearish trend with soybeans higher by $.15 in early trade only to selloff & make new contract lows at 11.81 finishing right near session lows and as I’ve been instructing traders or investors for quite some time I do believe prices are headed substantially lower in the next 2 weeks due to the fact that the weather is outstanding especially if we can get some warmer weather which should really propel the crop even more. Corn futures continue to move lower once again finishing down $.03 in the December contract at 4.63 a bushel also at new contract lows as I’m hearing from many farmers around the country & they are expecting over 200 bushels an acre which could produce a record crop this fall. Wheat futures which have been going sideways finished up $.02 at 6.72 still stuck in a sideways to lower trend and I still believe wheat prices are headed lower and I’m placing my stop above the 10 day high which is 6.80 risking around $.08 which is only $400 at this point. The trend is your friend when it comes to commodity trading and the trend in the grains is lower especially in soybeans and corn and I continue to stress to be short this market as these prices historically are way too high in my opinion as the carryover in corn is going to balloon to over 2 billion bushels. Monday will be an interesting day in the grains as I think we possibly could move sharply lower especially if the weather continues to remain excellent over the weekend so look for corn possibly trading down to 4.25 here in the short term while soybeans I believe can hit $11 here in the next week or 2. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Livestock Futures--- Live cattle in the October contract finished up about 10 points at 121.60 selling off from earlier session highs and I been recommending selling the cattle market as it broke down to 5 week lows yesterday & the great thing about the live cattle chart it has excellent chart structure allowing you to place a stop above the 10 day high which is 127 risking around $800 per contract if you are right on this play I would expect the reward would be substantially higher than the initial risk in my opinion. Lean hog futures are trading below their 20 but above their 100 day moving average with a possible double top created last week and actually hit an 8 week low earlier this week with poor chart structure right now so if you’re looking to get short this market I would sell a futures contract and place a stop above the recent high at 87 risking around $1200 per contract. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Cotton Futures--- Cotton futures in New York settled down 50 points for the week right at their 20 and 100 day moving average with excellent chart structure developing and if you look at cotton on the daily chart in my opinion it looks like there is a wedge or triangle developing which means there could be a breakout to the up or downside soon and in my opinion & I think prices are headed lower but I’m not recommending any short positions at this time. If prices break down next week I would be looking at selling this market as the grain market continues to go down with many other agricultural products so I think cotton at this point is a little too expensive but wait for prices to break 83 on the downside before entering as traders await the next USDA crop report which is about a week away. TREND: SIDEWAYS –CHART STRUCTURE: EXCELLENT
Orange Juice Futures--- Orange juice prices are trading above their 20 and 100 day moving average as we enter hurricane season with prices rallying about 2000 points from last month’s low as traders are worried about damage to the trees as well as crop production. Last week prices settled at 144.20 basically finishing the week unchanged & if you’re looking to get short this market my advice would be to put a stop above 148 which was hit on July 22nd limiting your risk to about $600 loss if you are wrong or if you’re looking to get long this market place a stop at 142 risking around $400 if you are wrong and the trend continues to head lower. In my opinion I like low risk trades and when you develop chart structure you’re allowed to risk small amounts of money which also depends on your account size & those trades in my opinion are the ones you want to take a look at with low risk and high reward. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Coffee Futures--- Coffee futures rallied this Friday afternoon in New York finishing higher by about 250 points at 121 a pound settling last Friday at 124.25 a pound and I been recommending a long position in this market due to the fact of excellent chart structure allowing you to risk relatively small amounts if you are wrong and in this case I was wrong as prices hit contract lows breaking 117 in yesterday’s trade hitting a new 3 ½ year low with extremely low volatility at this time. The next major support in coffee is at 105 which was hit over 4 years ago and it looks to me that prices might grind to that level but at this point in time I’m advising traders to sit on the sidelines and wait for real trend to develop once again. One of the best things about the coffee contract is its one of the largest contracts in the commodity markets with 100 points equaling $375 dollars and if you are right on this market the reward can be substantial so if the market has excellent chart structure allowing you to minimize your risk with tremendous reward I always recommend taking the trade. TREND: LOWER –CHART STRUCTURE:EXCELLENT
Sugar Futures--- Sugar futures are trading above their 20 but below their 100 day moving average settling last Friday at 16.47 going out today at 16.88 right at a 4 week high with excellent chart structure developing and if you are interested in getting long this market my suggestion would be to buy a futures contract and place your stop below the 10 day low which is 16.14 risking around $800 per contract as prices have bounced off 3 year lows. Crude oil prices have jumped this week going right back to their old highs and I think that is starting to put a floor under sugar prices because sugar is used as bio diesel as well and eventually bear markets come to an end but I’m not convinced that sugar prices are still not headed lower so I would wait and sit on the sideline at this time and see if a longer consolidation will develop. Sugar has done this many times in the last couple years when it rallies a couple hundred points you then think the bottom is in and all that happens is it makes new lows once again so I would look for at least a 10 week high before entering this market and that could happen soon because of the low volatility. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Stock Futures--- The S&P 500 rallied slightly today as traders reacted to the monthly unemployment report which showed 160,000 new jobs were added last month which was below the 200,000 estimate but this market is resilient and should close right at all-time highs. Investors continue to feel confident about the U.S economy with excellent quarterly earning coming out continuing its bull market climbing another 16 points this week trading at 1702 in the September contract trading far above its 20 & 100 day moving average. The Vix is near new recent lows which are the fear indicator telling traders that there’s not much to worry about at this point, but my opinion when the Vix gets down to 12 or 13 historically volatility starts to come back in the market but only time will tell. The NASDAQ futures continue to surge up another 60 points this week at 3128 trading higher for the 3rd consecutive trading session hitting contracts highs once again with terrific chart structure looking to grind higher and as I’ve stated in many previous blogs I have been very bullish the stock market and I do believe we are headed higher all due to the fact of the Obama administration continuing its easy monetary policies despite the fact that the U.S dollar continues to rally. The Dow Jones is trading 800 points above its 100 day moving average which tells me that this is a very strong trend and should continue for a while to come and in my opinion I do believe the S&P 500 and the Dow Jones will continue to hit all-time highs in the next couple of months due to the fact of terrific earnings with low interest rates and a Federal Reserve that wants to prop up the market. The chart structure in all 3 indices is excellent at this point and in my opinion the further a market trades above the 20 and 100 day moving average that tells you that the trend is extremely strong and in this case this has been the best & strongest bull market we’ve seen in the last several months and I believe it will continue to the upside. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
How Can You Use Moving Averages To Your Advantage?
A simple moving average is calculated by adding the closing price of a commodity such as crude oil for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying commodity, while long-term averages are slower to react. I generally follow the 20 and 100 day moving averages when commodity prices break below or above in my opinion that establishes a trend which in my opinion should always be followed as the saying goes the trend is your friend. If the 20 and 100 day have crossed to the downside and you have a long position that is telling you that you are trading against the trend which can be dangerous over the course of time. I generally like to buy a commodity or sell a commodity when the price has hit a 20 day high or low and the simple moving average also should have crossed at that point confirming or establishing that the trend is starting.
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