Silver futures in the March contract settled last Friday in New York at 24.09 an ounce while currently trading at 26.10 up over $2 for the trading week as prices have now hit a 3 month high and will look to test the $30 level in the coming weeks ahead.
If you have been following my previous blogs, you understand that I have been keeping a close eye on silver as I think sharply higher prices are ahead as I have now been recommending a bullish position from around the 26.05 level. If you took that trade, continue to place the stop loss under the 10-day low standing around the 24.30 level as an exit strategy as the volatility will increase tremendously in the coming weeks ahead.
The entire precious metals sector looks to move higher as the U.S. dollar has now hit a fresh two-year low. That trend is getting stronger to the downside weekly because the United States government continues to print money at an unprecedented rate. That is an extremely bullish fundamental factor towards silver and the entire commodity market as a whole.
I believe the $30 level will be breached in the coming weeks ahead. I still believe the $50 level, which is the all-time high, will be tested as extremely low-interest rates coupled with the fact that the U.S government wants asset classes to rise, which means you trade with the path of least resistance and that currently is to the upside as I see no reason to be short.
CHART STRUCTURE: IMPROVING
Natural Gas Futures
Natural gas futures in the January contract settled last Friday in New York at 2.59 while currently trading at 2.70, up slightly for the trading week. It looks to me that a bottom finally has been formed as we enter the highly volatile winter months.
I'm sitting on the sidelines as I'm waiting for a counter-trend trade to develop. I think the downside is very limited as I will not take a short position, so play this to the upside as the fireworks are ahead of us, in my opinion. Gas prices are trading right at their 20-day but still below their 100-day moving average as the price decline has been about 30% since mid-November. Historically speaking, prices look very cheap.
Fundamentally speaking, the longer-term outlook for warmer-than-normal U.S. winter temperatures is bearish for nat-gas prices as Maxar predicts this winter will be the 13th warmest winter for energy demand going back to 1950. Also, the Climate Prediction Center said that this year's La Nina weather pattern would lead to warmer-than-normal winter temperatures from California to Florida that will reach up the East Coast. If you have been following my previous blogs, you understand that I am a trend trader as that is the way to trade over time, but I think a unique situation could be upon us, so keep a close eye on this as we could be involved soon.
CHART STRUCTURE: POOR
Copper futures in the March contract settled last Friday in New York at 3.5280 a pound while currently trading at 3.6320, continuing its bullish momentum up about 1000 points as prices continually hit a five-year high.
My only precious metal recommendation is a bullish silver trade. However, suppose you have been following my previous blogs. In that case, you understand that I am very bullish copper prices, and I think the 4.00 level will be touched in the coming weeks. I see absolutely no reason to be short this market as this is the strongest trend to the upside and has even further legs to run.
Copper prices are trading far above their 20 and 100-day moving average as this trend is strong to the upside riding the coattails of the U.S. stock market, which continues to hit all-time highs. Despite today's sell-off as strong demand continues to propel prices higher as picking a top can be very dangerous, in my opinion.
If you look at the yearly chart, the next major level of resistance stands at the 4.00 area and then the 4.50 area. Who knows how high prices can go as trading with the path of least resistance is the way to go over time, and clearly, this path is strong to the upside, so stay long and continue to place the proper stop loss under the 10-day low.
CHART STRUCTURE: IMPROVING
Sugar futures in the March contract settled last Friday in New York at 14.43 a pound while currently trading at 14.44, basically unchanged looking for some fresh news to dictate short-term price action as it looks to me that the 14.00 level will hold.
I'm not involved as I'm looking at a possible bullish position. I will not go short as the commodity markets look to move higher across the board as sugar prices are now trading slightly below their 20-day but above their 100-day moving average, waiting for a consolidation breakout.
If you look at corn and crude oil prices, they are hitting new highs as the agriculture markets have caught fire. That trend is going to continue with all the U.S. stimulus packages as you have to remember the amount of money we were spending against the virus is astonishing, and that is going to push asset prices higher as that is the goal.
Suppose you take a look at the daily chart. In that case, the downtrend line remains intact, however, if the 14.65 level is broken, that also breaches that critical area. I think we are just biding time until a bullish trend develops as I see no reason to be short sugar, so look to be a buyer in the coming days ahead; therefore, the risk-reward will be more in your favor.
CHART STRUCTURE: IMPROVING
Wheat futures in the March contract settled last Friday in Chicago at 6.14 a bushel while currently trading at 6.07 down slightly for the trading week as prices have remained in a choppy trend since October, looking for some fresh fundamental news to push prices higher.
Fundamentally speaking, the United States will be planting fewer acres, and historically speaking, that should be a fundamental bullish factor in the future. However, I'm sitting on the sidelines as there is no trend, and I'm advising clients to keep an eye on this market for a possible bullish position in the coming weeks ahead.
Wheat prices are trading above their 20 and 100-day moving average as the trend has turned higher. However, the trend remains mixed as the true breakout will not occur until the 6.00 level is breached. The chart structure is terrible at the current time as the risk/reward is not in your favor to take a bearish or bullish position.
Corn and soybean prices look like they will continue to move higher, and I do believe wheat prices will join the party eventually. Keep a close eye on this market as we could possibly be involved in next week's trade.
TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING
Soybean futures in the March contract is currently trading higher by 11 cents at 12.17 a bushel, hitting a 6-year high after settling last Friday in Chicago at 11.66, up about $0.50 for the trading week as this market remains strong.
I'm not involved, but it looks like higher prices are ahead as there are some serious concerns about a drought developing in Brazil, which is the 2nd largest producer globally. I see no reason to short soybeans or any of the grain members at this time.
Soybean prices are trading far above their 20 and 100-day moving average, and if you are long a futures contract, I would continue to place the stop loss under the 2 week low standing around the 11.50 level as I still think there is room to run. If you look at the yearly chart, the next major level of resistance stands at the 13.00 area, and the longer this drought continues, the higher soybean prices will go. Volatility could explode to the upside as I have witnessed droughts in the past, and it can push prices higher exponentially.
The U.S. dollar has hit a two-year low this week as that is a fundamental bullish factor towards all commodity prices. That trend looks to head even lower as I'm looking to play the commodity markets to the upside as that is the path of least resistance at this time.
CHART STRUCTURE: SOLID
Corn futures in the March contract settled last Friday in Chicago at 4.23 a bushel while currently trading at 4.32 up about $0.09 for the week as prices are right near a 1 1/2 year high continuing it's slow grinding bullish momentum to the upside.
I do not have any grain recommendations as corn prices have gone sideways over the last month, looking to break out, in my opinion. However, for the bullish momentum to continue, prices have to break the November 30th high of 4.39 as that could happen in next week's trade as I see no reason to be short the grains or any commodities at this time. If you are long a futures contract, I would place the stop loss around the 4.15 level as an exit strategy as the chart structure is solid because prices have been going sideways.
Corn prices are trading above their 20 and 100-day moving average as this trend is higher. Soybean prices have now broken the $12 level as the commodities across-the-board look to move higher. U.S. stimulus packages will start to push up all asset classes as we are already witnessing it and some other sectors. I think 2021 will experience tremendous bullish secular trends.
CHART STRUCTURE: SOLID
The amount of money currently sloshing around in the United States is unbelievable. We are spending trillions of dollars on an economy that's already very solid despite the hotel and restaurant business's decimation. There is absolutely no reason not to take advantage of this while buying everything. I think stock prices will surge in 2021 while commodity prices are ridiculously cheap. You should take advantage of this situation as most asset classes will benefit due to quantitative easing, which is on steroids at this time. If you take a politically-speaking look, if the Republicans hold the Senate, that means the Trump administration basically has all of their plan remaining for at least another 2 years, and that is another fundamental bullish factor towards higher prices ahead. I see no reason to be short any asset classes. If you have a higher risk tolerance, it is time to be involved to the upside as this situation will not come around again in our lifetime, in my opinion.
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
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.