Weekly Futures Recap With Mike Seery

Gold Futures

Gold futures in the August contract settled last Friday in New York at 1,311 an ounce while currently trading at 1,347 up over $35 for the trading week looking to retest the contract high that was hit on February 20th at 1,361 in my opinion.

Currently, I'm not involved in gold, but I do believe higher prices are ahead as the 10-year note is now yielding 2.05% which is a 21-month low as that is a fundamental bullish factor for gold and commodity prices in general as prices held major support around the 1,275 level & now look to move higher.

Gold prices are right at a 3 1/2 month high, and if the contract high is broken, you're looking at a possibility that prices will trade into the $1,400 range as strong demand continues to push prices higher.

The U.S. dollar has hit a 4 week low this week, and that also is a bullish towards gold prices as it doesn't look like the trade war with China is going to end anytime soon. Money flows continue to go into the markets that are known as a flight to quality which includes gold and the bond market as I see no reason to be short gold at this time as I will be looking at buying on a price dip.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Copper Futures

Copper futures in the July contract settled last Friday in New York at 2.6500 a pound while currently trading at 2.6100 down 400 points for the trading week as prices are at a 5 month low.

I have been recommending a bearish position from around the 2.8240 level & if you took that trade, the stop loss stands at 2.7180 as an exit strategy, however in 2 trading sessions that will be lowered to 2.6980 as the chart structure will improve therefore reducing the monetary risk as this trend is very strong to the downside.

If you have followed any of my previous blogs, you understand that I sound like a broken record as I think prices will break the January 3rd contract low of 2.56 possibly in next week's trade as the downtrend line remains intact as well stay so short and continue to play this to the downside.

Copper prices are trading far below their 20 and 100-day moving average as this probably is the strongest bearish trend out of the commodity sectors as industrial metals still have weak demand because there is no agreement on trade between China and the United States.

The 10-year note has hit a 21-month low, and you think that would help copper prices because lower interest rates certainly help the housing market, but this is how bearish this commodity is as I see no reason to be a buyer.

TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

10-Year Futures

The 10-year note in the September contract settled last Friday in Chicago at 126 /24 while currently trading at 127/16 as the yield on the 10-year note stands at 2.05% which is a 21-month low and looks to head even lower in my opinion.

Initially, I had been recommending two bullish positions in the June contract from around the 124 /25 level while rolling over into the September. If you're still in this trade, continue to place the stop loss under the 2 week low which stands at 125 /04 as an exit strategy as this by far as is the strongest bullish trend out of all commodity sectors at this time.

The 10 year note is trading far above its 20 &100 day moving average as the trend clearly is higher as the unemployment number was released this morning showing that we added only 75,000 jobs which was construed as negative pushing bond yields even lower as it looks like the Federal Reserve is going to cut interest rates in 2019.

The next level of resistance is around the 128 area, and if you have been following any of my previous blogs, you understand that I thought prices could go to 2.00%. I believe we could even break that and go down to about the 1.80% level as there is so much uncertainty due to the trade war so continue to play this to the upside as I'll be looking at adding more contracts soon.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? I define chart structure as a slow grinding up or down trend with low volatility and no chart gaps. Many of the great trends that develop have very good chart structure with many low percentage daily moves over a course of at least 4 weeks thus allowing you to enter a market allowing you to place a stop loss relatively close due to small moves thus reducing risk. Charts that have violent up and down swings are not considered to have solid chart structure as I like to place my stops at 10-day highs or 10-day lows and if the charts have a tight pattern that will allow the trader to minimize risk which is what trading is all about and if the chart has big swings your stop will be further away allowing the possibility of larger monetary loss.

Cotton Futures

Cotton futures in the December contract which is considered the new crop and is currently being grown in the southern part of the United States settled last Friday in New York at 67.07 while currently trading at 66.00 looking to retest the contract low which was hit on May 14th at 65.25 in my opinion.

I am not involved in cotton as my only soft commodity recommendation is a bullish coffee trade as the chart structure is starting to improve in this commodity as we could be involved once again. Cotton prices are trading under their 20 and 100 moving average as the trend is to the downside as we have consolidated over the last month as I had been recommending a short position in April when prices collapsed.

Weather conditions are ideal at the current time as planting is in full swing as the situation in cotton is very different from the situation in the grain market as the trade war with China and possibly with Mexico certainly is negative towards cotton prices in the short-term.

Traders are awaiting next week's crop report, which should send volatility back into this market. Volatility at the current time is relatively low as that will not remain as we enter the summer months which generally expands volatility to the upside so keep a close eye on this market as we could be involved in next week's trade.

TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Soybean Futures

Soybean futures in the July contract is trading lower for the 3rd consecutive session down another $0.07 at 8.61 bushel after settling last Friday in Chicago at 8.77 as dryer weather has entered the Midwestern part of the United States as planting is in full swing once again.

Traders are awaiting next week's crop report as estimates are around 4.123 billion bushels which is shocking in my opinion as the average is about 49 bushels per acre as I don't see those numbers due to the extreme wet weather as that would still be an outstanding crop.

This week the price gap was filled in yesterday's trade which I think is a bullish technical factor as I will be looking at buying soybeans on any price retracement as I do believe the lows have formed.

Volatility remains high as prices are still trading above their 20 and 100-day moving average. However, for the bullish momentum to continue, we have to break the June 4th high of 8.94 in my opinion as we need a bullish crop report for that to occur.

The soybean situation is not near as dire as corn as you can plant soybeans up to about the 3rd week of June whereas corn planting should be finished in May. They are way behind schedule as I think the grain market, in general, has turned into a bullish secular trend so look to be a buyer on weakness.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Natural Gas Futures

Natural gas futures in the July contract are trading at 2.34 right near a contract low as weather conditions in the Midwestern part of the United States are very mild as demand has weakened substantially. Natural gas prices sold off to a fresh 3 year low today on a larger than expected build in the U.S. natural gas supplies.

The EIA reported today that U.S. gas inventories rose 119 bcf above expectations of 109 bcf and higher than the 5 year average of 102 bcf while also Thursday's increase was the 10th consecutive week that gas supplies have risen by more than the 5 year average.

I'm not involved in the energy market, but I'm certainly not recommending a bullish position as prices look very weak in my opinion and probably head down to the 2.00 level in the coming weeks ahead as this trend is strong to the downside.

Traders are keeping a close eye on the 7/10 day weather forecast as there still is extremely mild temperatures as I write this article in the state of Illinois as we are consistently 70 degrees and wet as it doesn't seem like this is ever going to end.

I've talked about this in many previous blogs as this is the worst spring I've ever experienced as I've lived in this state for nearly 50 years as I see no reason to be a buyer at this time.

TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: AVERAGE

Trading Theory

What's the difference between old crop & new crop in the agricultural commodities? When analysts and traders talk about agricultural commodities such as soybeans and corn, the one thing they generally mention is old crop versus new crop, and that might confuse some beginners on what exactly is the difference.

I will keep it simple because the only difference between old crop and the new crop is that old crop in soybeans is any month other than November. As an example is March or May and all months that were grown last year while the new crop is the November soybeans and will be harvested this October of 2019 and will be grown this summer.

That's why sometimes there is a price difference between the old crop and the new crop because this year's harvest in soybeans could be as high as 4.1 billion bushels pushing prices lower in the November contract as old crop and the new crop can also have different carryover levels or supply levels.

Old crop corn is any month other than the December contract while the new crop is only the December contract which will be grown this summer and harvested in October. Sometimes there's a price difference between the old crop and the new crop as well because as we will be harvesting around 14 billion bushels in October which is the reason why the December corn can be lower than the May corn because that was old crop which was harvested last October also having a different supply situation.

Many of the agricultural commodities are affected by old crop & new crop including the grains, meats, coffee, and cotton so if you need help understanding which month you should be trading feel free to give me a call at any time & I will be more than happy to make sure that you are trading the correct month.

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: 630-408-3325
mseery@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. 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.

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