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 continued its bearish momentum this week pushing corn near 3 year lows trading far below its 20 and 100 day moving average settling this week at 4.52 of bushel right at session lows this Friday afternoon and down about $.10 for the trading week as U.S crop conditions are excellent at this point in time. Traders are waiting Monday afternoon’s USDA report which could surprise the market in either direction but as I’ve been stating in many previous blogs I continue to remain bearish this entire complex and I’m still advising traders to be short across the board. Soybean futures for the November contract are still trading below their 20 and 100 day moving average basically settling unchanged for the trading week and are much stronger than corn or wheat but it hit contract lows in Wednesday’s trade before rallying $.20 yesterday as traders are awaiting the supply/ demand and production numbers Monday afternoon. Wheat futures which I’ve been recommending a short position for quite some time is still trading below its 20 and 100 day moving average settling last Friday at 6.73 a bushel and going out ending the week at 6.47 down about $.26 hitting new 13 month lows as ample supply is starting enter the market and I still believe that grain prices could head substantially lower here in the next couple of months with the possibility of wheat breaking $6 if the USDA report turns out bearish. The grain market has excellent chart structure developing allowing you to place a stop loss if you trading the futures market at the 10 day high or low minimizing your risk in case the trend does change & if you’re a longer-term trader look at bear put spreads limiting your risk to what the premium costs and allowing you to have a longer-term perspective on this market which is clearly bearish in my opinion. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Precious Metal Futures--- The precious metals were relatively quiet this week with gold basically trading unchanged with excellent chart structure developing and major resistance at 1,350 an ounce with very low volatility recently due to the summer doldrums basically when the month of August comes volume lightens up across the board in the commodity and stock markets with activity picking up after Labor Day. Silver futures are trading above their 20 day but below their 100 day moving average which stands at 22.60 up for the 2nd consecutive day at 20.40 an ounce after settling last Friday at 19.91 hitting 6 week highs as demand seems to be coming back into the silver market. I’m advising traders to be long silver at this point placing a stop below the 10 day low which was at 19.20 which was hit in early trade on Wednesday with excellent chart structure allowing you to minimize your risk to a $1.20 which is around $1200 if you trading the mini contract. Copper futures have broken out to 9 week highs in the September contract up for the 3rd consecutive day as Chinese demand is starting to come back in this market pushing prices higher once again finishing this Friday up 400 more points at 3.31 a pound with the next major resistance around the 3.50 level. The U.S dollar has been going down against the foreign currencies which are starting to prop up precious metal prices as the bear markets might be over at least here in the short term. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Energy Futures— The energy market saw extreme volatility this week with crude oil hitting 5 week lows in early trade yesterday only to rally sharply off of those levels finishing this Friday up $2.75 a barrel right around $107 settling unchanged for the week with a possible double top being hit at 109. If you’re looking to get short this market thinking that the double top will hold my suggestion would be to sell the futures contract and place a stop above 109 risking around $1,000 per contract if you trading the mini crude oil. If you believe that prices are headed higher place a stop below the 10 day low which is right around yesterday’s low of 102.25 risking around $2,500 in case you are wrong & the price does continue to decline. Unleaded gasoline futures were up 400 points at 2.90 a gallon trading below their 20 day but above their 100 day moving average settling down about 900 points for the week as there is absolutely no trend with extremely poor chart structure so I’m advising traders to sit on the sideline as demand season is starting to wind down and children around the country are starting to get back to school. TREND: CHOPPY –CHART STRUCTURE: TERRIBLE
Coffee Futures--- Coffee futures rallied for the 3rd consecutive trading session trading above their 20 day moving average but below their 100 day settling last Friday at 121 and going out in today’s session at 125.60 a pound in the December contract up nearly 500 points for the trading week after having a false breakout to new contract lows last Friday and is now rallied back into the recent channel. At this point in time I’m not advising traders to be involved in coffee because its having many false breakouts to the up and downside ,however I do believe it will be an excellent opportunity in the next couple of months as we might chop around sideways continuing this long grinding consolidation. Many of the soft commodities have bottomed including sugar, cocoa, and cotton so there’s a possibility that coffee which is right at 3 year lows might be bottoming but wait for a true breakout to occur before entering a position at this time. TREND: NEUTRAL –CHART STRUCTURE: EXCELLENT
Sugar Futures--- Sugar futures rallied once again this Friday afternoon continuing their bullish momentum now trading above their 20 day moving average but still below their 100 day average which stands at 17.25 settling this week at 16.98 a pound up around 20 points for the trading week hitting a new 6 week high. Sugar has outstanding chart structure developing so if you’re looking at possibly picking a bottom and wanting to buy this market I would advise just buying the futures contract placing a stop under 16.50 risking around $500 per contract which in my opinion is very reasonable because sugar can become a volatile market and if it does become volatile it should do it to the upside. Many of the soft commodities have started to rally while sugar prices hit 3 year lows just a couple weeks back but everything comes to an end and at this point in time I’m advising traders to take a shot sugar to the upside making sure you do put a stop loss and risking a maximum of 2% of your account balance on any given trade. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Orange Juice Futures--- Orange juice futures were sharply lower this Friday afternoon down around 400 points settling last Friday at 142 and going out around 135 trading below their 20 and 100 day moving average as hurricane season has begun but with little activity so far as traders are on the defensive. Orange juice futures settled down for the 4th consecutive trading day and I do believe prices are headed lower despite the fact that many of the soft commodities look to have bottomed here in short term so I think orange juice looks vulnerable at these levels and might retest the 125 level here in the next couple of weeks remembering the fact that we rallied over 2000 points on concerns of hurricanes and at this point in time there is no hurricane in sight so prices remain bearish in my opinion. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Cotton Futures-- Cotton futures exploded this week retesting their highs from June 14th going out around 89.00 after settling last Friday around 85 up about 400 points for the trading week as traders await Monday’s USDA crop report. There are some weather concerns down in Oklahoma and Texas causing traders to fear that the harvest will be smaller than anticipated pushing prices right near recent highs forming a possible triple top on the daily chart and at this point in time as a trend follower my suggestion would be to be long the futures contract or bull call spreads if you’re an option trader placing your stop loss below the 10 day low which is around 84.50 which is around $2,000 risk on a futures contract. Mondays USDA report should dictate where short-term prices will head if supplies are higher than anticipated or the production is more than what was previously thought it could send prices right back down but the trend is your friend in the commodity markets and if prices are moving higher that’s the way you generally want to trade the market in my opinion. Many of the commodities have been rallying in recent weeks except for the grain market so it will be interesting to see what this crop report states on Monday at 11 AM central time. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
TRADING RULE--- If you follow this rule you will have a chance of being successful over the course of time, if you don’t follow this rule you will be sure to lose your money quickly. This rule is simple Do Not OVERTRADE EVER for this is an easy way to lose all your capital quickly. My definition of over trading is risking too much money on any given trade, for example if you are trading a $100,000 dollar account and you place a gold trade today you should limit your loses to 2% of the account value which in this case is $2,000 which allows you to be wrong on many trades and still be around to play another day. In futures and option trading you will have losing trades that is for certain so make sure you manage those losses and move on to another trade.
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