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 December contract had one of the most volatile and crazy trading weeks that I can remember finishing this Friday afternoon down $35 at 1,333 an ounce after settling last Friday at 1,308 rallying on the concept that the Federal Reserve will not taper bond purchases which sent many of the commodity markets sharply higher including gold on Wednesday afternoon, however reality has set in as Goldman Sachs came out stating that they believe the Federal Reserve will start tapering in December which put a lot of pressure on many commodities including the stock market today. I have been advising traders to sit on the sidelines in the gold market & I still think gold looks relatively weak closing right on session lows today as the bond purchasing in my opinion is overrated. The trend in gold is lower at this point but wait for better chart structure to develop before looking to enter into this market as volatility is too high. The U.S dollar hit an 8 month low which also propelled gold prices higher on Wednesday as the Federal government continues to try & support asset prices and it also continues to try to devalue the U.S dollar which is generally bullish commodity prices, however money seems to the flowing back into the S&P 500 as prices are hitting all-time highs while taking money out of gold market. TREND: LOWER –CHART STRUCTURE: POOR
Silver Futures-- Silver futures settled down $1.50 this Friday afternoon settling around 21.81 an ounce in an extremely volatile trading week with silver now trading right at its 100 day moving average but below its 20 day moving average basically in a sideways & very volatile choppy trend. Last Friday prices settled at 21.72 basically unchanged for the week with a $1.50 move to the upside on Wednesday and a $1.50 move to the downside on Friday having traders shake their head where prices are going. I’m still advising traders to take advantage of big down days in the silver market as there is a possibility that prices could go as low as $20 an ounce in my opinion but I am a long-term investor when it comes to the silver market because I do think prices are cheap and if you have deep enough pockets enough to weather the storm like today my advice is to get long this market because I do think with demand around the world for electronics and stock markets hitting highs across the globe that eventually will prop up silver prices as gold is used as a hedge which is a completely different situation in my opinion. TREND: SIDEWAYS–CHART STRUCTURE: POOR
Soybean Futures--- The soybean market had one of its worst down weeks in quite some time finishing last Friday at 13.81 coming off a very bullish report which stated that carryover levels are at 150 million bushels propping up prices to contract highs, but this week was a different story as heavy rains came across the Midwest and a general malaise in commodity prices pushing soybeans down $.25 this Friday afternoon at 13.16 finishing down $.65 for the week closing right at 4 week low. I have been talking about the soybeans filling their gap on the daily chart and they finally did fill in yesterday’s trade, however I do think prices could go all way down 12.80 and at that price level I would start to get bullish as the fundamentals in soybeans are much better than the rest of the grain market. The problem with soybeans is the fact that corn and wheat continue to move lower and they are starting to put some pressure on the soybean complex, however I do think losses are limited but I do see prices heading 30- $.50 lower here in the short term as harvest is beginning which could keep a lid on prices as a 3.23 billion crop is at hand. TREND: LOWER –CHART STRUCTURE: POOR
Informa Economics Estimates:
Bean Yield: 42.4 bpa vs. September 5th estimate of 42.7 bpa.
Bean Production: 3.224 billion bushels vs. 3.266 on September 5th.
Bean Planted Area: 76.8 million acres vs. USDA at 77.2 million.
Corn Futures--- Corn futures in the December contract finished down $.08 at 4.51 a bushel hitting a fresh 4 week low as I’ve advising in previous blogs to continue to be short the corn market as a 14 billion crop is on the horizon as harvest is starting to accelerate which will start to put a huge supply of corn onto the market as I do believe the contract low of 4.45 will be broken in next week’s trade with the possibility of $4 rather quickly in my opinion. You must realize how big of a crop is coming in the market in the next 60 days it’s also the largest crop in the history of the United States which in my opinion is going to continue to push prices lower on a daily basis especially if the soybean market starts to turn to the downside. The United States federal government stated that they will continue stimulus which propped up corn prices the other night, however the fundamentals are so bearish at this time I don’t think it really matters what the government does & I do believe corn prices are headed lower and I think you should be short the futures contract placing a stop loss above the 10 day high which is 4.73 risking around $1,000 per contract or get into some type of option spread limiting your risk to what the premium costs. The chart structure in corn is starting to improve on a daily basis and I think this is a good market for small or large trading accounts. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Informa Economics Estimates:
Corn Yield: 157.6 bpa vs. September 5th estimate of 157.2 bpa.
Corn Production: 13.889 billion bushels vs. 14.010 on September 5th.
Corn Planted Area: 95.8 million acres vs. USDA at 97.38 million.
Wheat Futures--Wheat futures in the December contract continued their seesaw pattern down $.11 after being up $.08 in yesterday’s trade to settle at 6.46 a bushel starting to create major support at 6.40 where it has been trading for the last 5 weeks. If prices break 6.34 I would be recommending a short position as I think the bear markets will continue in the grain market. The wheat market generally becomes more volatile as we enter the winter season and volatility right now is very low so in my opinion whatever direction the breakout occurs could be a substantial rally or a substantial fall from today’s prices so keep an eye on this market. In my opinion wheat could head to the downside so if the 6.34 level is breached I think we could head into the mid-$5 range. Wheat prices are still trading below their 20 and 100 day moving average which is a bearish technical indicator in my opinion & I do believe wheat will start to follow corn to the downside. TREND: SIDEWAYS –CHART STRUCTURE: EXCELLENT
Sugar Futures-- Sugar futures continued their bullish run this week finishing higher by 7 points in the March contract finishing up 17.74 a pound trading above its 20 and 100 day moving average hitting an 11 week high with the next major resistance at 18.19 which was hit on June 25th as the Brazilian currency had a substantial rally against the U.S dollar in the last 3 weeks stabilizing prices. I have been recommending long positions in sugar and I still do that sugar prices have the capability of moving higher but make sure you place your stop loss below the 10 day low in case the trend does change and the volatility in a lot of these markets is very high right now, however sugars volatility is very low and I don’t expect that to continue for much longer. The chart structure on the daily chart is outstanding and looks to me that a major bottom has been formed in sugar prices which were continuing to hit 4 year lows until just recently and remember everything comes to an end including bear markets. The fundamentals in sugar are bearish at this time with large supplies globally but many of these bearish factors are already priced in the market. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Coffee Futures-- The coffee market continues to go absolutely nowhere but slightly lower on the weekly charts as prices hit a new 4 year low trading below their 20 and 100 day moving average with extremely low volatility closing this Friday in the March contract at 117.75 and I had been recommending to be buying coffee last week with a very tight stop and that trade did not work, however it was a relatively small loss. Volatility in coffee in my opinion is almost at all-time lows as prices really are very quiet for such a volatile commodity. The problem in coffee is the fact that global supplies are huge with excellent crop conditions around the world with the possibility of prices getting down to the 100 – 110 level and I do think if you’re lucky enough to get those prices & you’re a long term investor I would be buying at major yearly support. When prices hit this low people stop growing and that’s what causes higher prices and when higher prices come in farmers grow more and that’s what causes lower prices but sometimes it pays to be patient. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Cocoa Futures--Cocoa futures in the March contract finished down 20 points to settle at 2614 trading above its 20 and is trading above its 100 day average by 300 points which tells me this is a big-time bull market as demand going into the holiday season is picking up with extremely dry weather in West Africa which is causing concerns of a smaller crop as we enter demand season. The chart structure in cocoa is relatively solid at this point so if you’re looking to get into this market I would place my stop loss below the 10 day low if you’re looking at getting into an outright call option which will limit your risk to what the premium costs or a bull call spread which also limit your risk. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
S&P 500 Futures---The S&P 500 sold off for the 2nd straight trading session as the market is still digesting the Federal Reserve’s decision to continue to print money sending the S&P 500 to all-time highs once again as the gravy train continues to rock & roll and looks to go higher in my opinion. This is a demand market in my opinion as companies continue to buy back shares lowering the stock float while pushing up the earning per share as well also with the government on their side with easy money policies which is the PERFECT situation if you are bullish the market. The S&P 500 has rallied 80 points in the month of September and is now 70 points above its 100 day moving average and in my opinion the further away prices are from their 100 day the stronger the trend. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Nasdaq Futures---The Nasdaq 100 lower for the first time in 4 trading sessions day continuing its bullish momentum this week finishing higher by 50 points in the December contract at 3223 hitting a 13 year high and in my opinion I do believe that 4000 in the cash index will be tested very soon as bullish momentum is accelerating. The Nasdaq is trading above its 100 day moving average by 210 points which tells you that this trend is strong and I’m still recommending buying the futures market and placing the stop loss at the 10 day low minimizing your risk in case the trend changes or some type of bull call option spread limiting your risk to what the premium costs. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Cotton Futures--- Cotton futures were very quiet this Friday afternoon in New York trading right around 84.50 in a directionless trend basically trading sideways for the last several weeks trading below its 20 & 100 day moving average as the USDA lowered U.S production slightly but increased worldwide supplies in last week’s report. The chart structure in cotton is improving dramatically as volatility has really slowed down in the last couple of weeks but I’m advising traders to sit on the sidelines right now because there is no trend but there could be a breakout relatively quick due to the fact that we have been going sideways for several weeks as the fundamental news was mixed. TREND: MIXED –CHART STRUCTURE: EXCELLENT
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