Copper futures in the March contract settled last Friday in New York at 3.4380 a pound while currently trading at 3.5250, up about 900 points for the trading week as prices have now hit a 5 year high.
If you have been following my previous blogs, you understand that I'm not involved, but I am very bullish copper. We could go to the 400 in the coming weeks ahead as strong demand for housing continues to push copper prices to a multi-year high. If you are long a futures contract, I would place the stop loss under the 10-day low, which now stands at 322 as an exit strategy. However, the chart structure will improve daily; therefore, the monetary risk will be reduced tremendously.
At the current time, this by far is the strongest precious metal as we have now traded higher for the last 8 consecutive sessions with the next major level of resistance around the 360 level. That could be touched next week as I see no reason to be short copper or any commodities as I am bullish across the board, including stocks.
CHART STRUCTURE: IMPROVING
Silver futures in the March contract settled last Friday in New York at 22.63 an ounce while currently trading at 24.20 up about $1.60 for the week, still stuck in a 10-week consolidation.
If you look at the daily chart, silver prices may have created a double bottom earlier in the week at the 22 level. I will be looking at a bullish position if prices close above the 25.71 area in the coming days ahead as I still believe silver prices look cheap. The U.S. dollar hit a 2 year low this week as that is a fundamental bullish factor towards the precious metals as the vaccine virus sent gold and silver lower over the last month, but now things have stabilized.
If you have been following my previous blogs, you understand that my consolidation rule states that the longer the consolidation, the stronger the breakout which is occurring at this time. If prices break the 25.71 level I think we could go back up to the 30 area, which I still do not believe will be the top.
Silver prices are trading below their 20-day but still above their 100-day moving average as this trend is mixed. It has been very difficult to be successful over the last couple of months as that's why you must be a trend follower while avoiding choppy markets.
CHART STRUCTURE: EXCELLENT
Natural Gas Futures
Natural gas futures in the January contract settled last Friday in New York at 2.84 while currently trading at 2.52, absolutely collapsing in yesterday's trading session as prices hit a fresh contract low.
At the current time, I'm not involved, but I do believe prices are getting cheap as I'll be looking at a possible bullish position in the coming days ahead. One of the main reasons for the sudden drop was the fact that forecasts for warmer-than-normal U.S. temperatures fueled fund selling of nat-gas futures on Thursday.
The National Oceanic Atmospheric Administration (NOAA) on Thursday forecast above-normal temperatures for the Midwest, Northeast, and West from Dec 8-12. Maxar on Wednesday said that much warmer temperatures are expected for the Northeast and northern Midwest from Dec 12-16. The 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.
If you follow my blogs, you understand that I am a trend follower. Still, a special situation can come about once in a while, as I think the downside in natural gas is limited, especially if the weather forecast is not correct.
CHART STRUCTURE: POOR
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Orange Juice Futures
Orange juice futures in the January contract settled last Friday in New York at 128.70 while currently trading at 126.50, down a couple hundred points for the week as prices have been stuck in the mud over the last 3 weeks.
I've been recommending a bullish position from around the 119 level, and if you took that trade, continue to place the stop loss on a closing basis only under the 10-day low, which stands at 123.35 as an exit strategy. The chart structure is outstanding at the current time because the stop loss remains very tight.
Juice prices are trading above their 20 and 100-day moving average as the trend remains higher. We are awaiting some fresh fundamental news to dictate short-term price action with the next major level of resistance at last week's low around the 130 area as that has to be broken for the bullish momentum to continue.
Volatility is starting to accelerate as we enter the winter months for the State of Florida. That situation will not change anytime soon, so you must understand the seasonal effect on this commodity if you do get involved.
CHART STRUCTURE: EXCELLENT
S&P 500 Futures
The S&P 500 in the March contract settled last Friday in Chicago at 3636 while currently trading at 3675 up nearly 40 points, continuing its bullish momentum hitting an all-time high once again.
Today, the monthly unemployment number was released, showing that we added 100,000 jobs with an unemployment rate of 6.8%. The situation certainly is improving, coupled with the fact that a vaccine is on the horizon in a couple of weeks as that is terrific news for equity prices.
If you have been following any of my previous blogs, you understand that I think stock prices will continue to rally as the monetary policy is very accommodating for equity prices. There is tons of money still on the sidelines, and all asset classes look to move higher, in my opinion. The S&P 500 is trading far above its 20 and 100-Day moving average as this trend is strong to the upside. The Nasdaq-100 continues to hit all-time highs and the tech sector is on fire; I see no reason to be short.
Earnings season has been very solid once again, as there is just a lot of optimism out there even though we are going through another problematic wave of the virus. Still, the stock market is a forward-looking mechanism, and it's telling you the United States economy in 2021 could be outstanding.
CHART STRUCTURE: IMPROVING
Coffee futures in the March contract settled last Friday in New York at 124.20 while currently trading at 119.20, down about 500 points. Traders are keeping a close eye on Brazil's weather conditions as the weather forecast in the next 10 days, which has kept the lid on prices.
I have been recommending a bullish position from around the 109.55 level. If you took that trade, continue to place the stop loss under the 10-day low standing at 115.60 as an exit strategy. However, the chart structure will not improve for another 4 trading sessions, so you will have to accept the monetary risk at this time.
Coffee prices are still trading above their 20 and 100-day moving average as the trend remains to the upside coupled with the fact that the uptrend line remains intact. However, if the two-week low is broken, that situation would also be breached, and then it would be time to become neutral.
For the bullish momentum to continue, prices have to break the 124 level, in my opinion, which was touched on multiple occasions only to fail every single time, so stay long as the risk/reward is still in your favor.
CHART STRUCTURE: EXCELLENT
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
Phone #: 630-408-3325
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