Silver Futures Remain Extremely Choppy

Silver Futures

Silver futures in the December contract is currently trading at 23.61 an ounce after settling last Friday in New York at 24.67 down over $1 for the week as prices are right near a 5 week low.

At the current time, I'm not involved. Suppose you have been following any of my previous blogs. In that case, you understand that I was looking at a possible bullish position if prices broke the 25.71 level, which never occurred, so I'm sitting on the sidelines being patient as this market remains extremely choppy. Remember, when you trade the commodity markets, trading with the path of least resistance is the way to go over time while also avoiding choppy markets like silver. We await the highly-anticipated U.S election next Tuesday, which certainly will dictate short term price action going forward.

Silver prices are now trading below their 20 and 100-day moving average as the trend has turned to the downside with major support at the 22 level. If that is broken, you would have to think that prices will go down to the 20 area; however, longer-term, I still like silver as I'm just waiting for a buying opportunity.

TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Gold Futures

Gold futures in the December contract settled last Friday in New York at 1,905 an ounce while currently trading at 1,887 down about $20 for the trading week as prices are hovering right near a 3 month low.

I do not have any precious metal trades as I was looking at a possible bullish position if prices closed above the 1,939 level, which never occurred. This market is under pressure because a stimulus agreement will not be reached before the U.S. election next Tuesday as that is disappointing, therefore, pushing the U.S. dollar higher.

Gold prices are now trading below their 20 and 100-day moving average as this trend has turned. However, if you look at the daily chart, there is major support at the 1,850 level, and if that is broken, you have to think that prices could go down to the 1,800 area, but we will have to see if that situation will develop. The volatility in gold at the current time is high, and that will not end anytime soon. I still believe higher prices are ahead as I do believe after the election, the stimulus package will be confirmed, but be patient as there is no reason to be involved at the current time.

TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Orange Juice Futures

Orange juice futures in the January contract is currently trading at 114.30 while settling last Friday in New York at 113.50, up slightly for the trading week still stuck in a 5-week consolidation pattern.

I will be recommending a bullish position if prices break the October 13th high of 118.75 while then placing the stop loss under the spike bottom, which occurred on October 21st at 107.35 as the risk would be around $1,700 per contract plus slippage and commission. In my opinion, it looks to me that orange juice prices are bottoming as we enter the highly volatile winter season for the State of Florida. I believe the risk/reward would be in your favor to the upside, as I think the downside is very limited at these multi-year lows.

Juice prices are trading below their 20 and 100-day moving average as the trend remains mixed to lower, but that situation could change soon, so keep a close eye on this market as we could be involved in next week's trade as I will not go short. At the current time, my only soft commodity recommendation is a bullish coffee trade. However, I believe that cotton and sugar prices will continue their bullish momentum as well.

TREND: LOWER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Coffee Futures

Coffee futures in the December contract settled last Friday in New York at 105.60 a pound while currently trading at 104.90, down slightly for the week as prices are right near a 4 month low.

One bearish factor for arabica was the statement on Wednesday from researcher Cepea, who said that arabica-coffee trees in Minas Gerais experienced "significant" coffee flowering after rain earlier this month, which may boost Brazil's 2020/21 coffee production and eased earlier concerns about dry conditions in Brazil. I have been recommending a bullish position over the last several weeks from around the 109.55 level, and if you took that trade, continue to place the stop-loss under the contract low standing at 96.90, which is just an eyelash away as this market has been very stubborn unable to join the bullish trends of other agricultural sectors.

Coffee prices are trading below their 20 and 100-day moving average as the trend is to the downside and as I have discussed in many previous blogs, this was a counter-trend trade, which I do not recommend very often. Still, I believe the risk/reward is in your favor to take a bullish position at these incredibly depressed prices.

TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE

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Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 6.32 a bushel while currently trading at 5.98 as prices have now hit a 3 week low.

I had been recommending a bullish position over the last month from the 5.40 level getting stopped out today at the 5.96 area as it is time to move on and become neutral and wait for another trend to develop. At the present time, my only grain trade is a bullish soy meal recommendation as I was also stopped out of soybeans today as the grain market may have gotten a little ahead of itself, but that's okay as I still believe we are in long-term secular bullish trend which is a great thing to see for U.S. farmers.

Wheat prices are trading below their 20-day moving average but still above their 100-day as the trend is mixed as we await the highly-anticipated U.S presidential election next Tuesday as that will certainly send clarity back into stocks and commodities. The Coronavirus situation spreading worldwide certainly has put pressure on wheat prices here in the short-term, so sit on the sidelines and look at other markets that are beginning to trend.

TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Soybean Futures

Soybean futures in the November contract settled last Friday in Chicago at 10.83 a bushel while currently trading at 10.51 down about $0.30 for the trading week.

I had been recommending a bullish position over the last couple of months from around the 9.14 level while getting stopped out in today's action at 10.47. It is time to move on and look at other markets that are beginning to trend as the grain market may have gotten a little ahead of itself. The Coronavirus is starting to spread once again, and there is massive panic about governments forcing more economic lockdowns. That is the main reason you've seen this sell-off across the board over the last couple of days. There is a lot of uncertainty as we await the U.S Presidential election next Tuesday, which will send big-time volatility into all sectors.

My only grain recommendation at the current time is a bullish soymeal trade as I was also stopped out of wheat as the grain market has experienced a tremendous rally over the last couple of months, and I think this is a pause. Traders will keep a close eye on Brazil's weather conditions, but I still believe the long-term bottom in soybeans and the rest of the grain market is at hand as we should see bullish trends continue in 2021, in my opinion.

TREND: MIXED - HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Lean Hog Futures

Hog futures in the December contract settled last Friday in Chicago at 67.02 while currently trading at 66.55, down slightly for the trading week as it looks to me that prices may have topped out in the short-term.

If you look at the daily chart, it looks like a possible spike top was created at 72.80, which was hit on October 19th. I think hog prices are headed lower; however, I am sitting on the sidelines, waiting for the chart structure to improve. There is absolute panic concerning the Coronavirus spreading worldwide; therefore, curbing demand for many commodities. This was a rough week across the board, including the stock market, which was sharply lower as we await the highly-anticipated U.S. Presidential election next Tuesday. That certainly will send some clarity back into the livestock sector as well.

Hog prices are trading slightly below their 20-day but still above their 100-day moving average as the trend is mixed. The volatility isn't going to change anytime soon as seasonably speaking, the winter months for livestock can experience tremendous price swings, so keep a close eye on this market as I have a bearish bias.

TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

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.

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
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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.