Weekly Futures Recap With Mike Seery

Gold Futures

Gold futures in the June contract settled last Friday in New York at 1,287 an ounce while currently trading at 1,279 down about $8 for the week ending on a sour note. I had been recommending a bullish position from around the 1,301 level as it is time to exit and move on as prices hit a two week low experiencing another false breakout. Gold prices hit a five-week high earlier in the week looking to break out, however, then the stock market stabilized as it generally does throughout history sending money flows back into equities and out of the metals. The U.S dollar is hovering near a two year high as I have a bullish position in that currency as that also has put pressure on gold prices which now look to test the major support around the 1,267 area so sit on the sidelines and let's wait for another trend to develop. Silver prices are hitting a five-month low today, and that is also putting pressure on gold as I also have a bearish copper recommendation which continues to drip lower weekly as the commodity markets, in general, remain weak. Gold prices are now trading under their 20 and 100-day moving average as the trend has turned south, however for the real breakout to occur we have to break the May 2nd low of 1,267 and if that does happen, expect lower prices ahead.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: AVERAGE

Copper Futures

Copper futures in the July contract are currently trading at 2.7715 after settling last Friday in New York at 2.7375 a pound continuing its bearish momentum as the whole precious metal sector looks weak in my opinion. I have been recommending a bearish position from around the 2.8240 level, and if you took that trade the stop loss has now been lowered to 2.8410 and then in Tuesday's trade will drop all the way down to 2.8100 as the chart structure will improve daily. Copper prices are trading far below their 20 and 100-day moving average as the trend is lower, however for the bearish momentum to continue we have to break the May 13th low of 2.7090 in my opinion as I will possibly be looking at adding more contracts to the downside. The U.S dollar is right near a two year high as I also have a bullish recommendation in that currency as that is also putting pressure on copper and most of the commodity sectors. The volatility is high as that should remain that way throughout the summer months as historically speaking copper can have crazy daily price swings with high risk so stay short.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

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Facebook - Privacy Scandal Amnesia

Facebook Inc. (FB) crushed its Q1 2019 earnings estimates on both top line revenue and bottom line profit. Revenue grew 26% year-over-year, giving rise to investor amnesia as it relates to its string of privacy scandals. Facebook is now testing its all-time highs with a reasonable price-to-earnings multiple when compared to its tech cohort. As the company attempts to move past its privacy issues while restoring trust with its user base, negative sentiment has abated. Facebook continues to post unparalleled growth for a company of its size while its platforms are the go-to properties for advertisers and influencers. Will Facebook be able to march forward without being plagued by the slew of issues ranging from international regulatory scrutiny, user privacy issues, high-level employee mass exodus, and a questionably toxic company culture? Some analysts argue that the negative confluence of the aforementioned issues will drive up costs, narrow revenue streams, and weaken the user base. The privacy scandal has already resulted in increased costs surrounding compliance, monitoring, censorship, and scrubbing the platform from deceptive marketing. If the company continues its path forward on the privacy front while posting best-in-class revenue growth, the stock will likely continue to elevate higher.

Q1 Blowout Quarter

Facebook continues to deliver phenomenal growth across the company while its cash hoard swells to $45 billion. The company posted EPS and revenue of $1.89 and $15.08 billion, respectively. These numbers beat on EPS by $0.27 and beat on revenue by $104.3 million.

"We had a good quarter, and our business and community continue to grow," said Mark Zuckerberg, Facebook founder, and CEO. "We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the internet."

The stock exploded higher on the earnings news, shooting from $182 to $195 or 7% in a single session. Facebook’s properties continue to grow and continue to expand its revenue moat in advertising spend. Instagram and Whatsapp will likely serve as major growth catalysts as these assets still have a lot of room for its monetization efforts. Continue reading "Facebook - Privacy Scandal Amnesia"

Bitcoin Suffers It's Biggest Loss Of The Year

Hello traders everywhere. Shortly after Bitcoin broke thru the $8,000 level it suffered it's biggest loss of the year trading as low as $6,178 on the day. Bitcoin has recovered more than 50% since the low hit earlier today. However, it is still down around -5% on the day at $7,071. Much like the recent massive move higher there doesn't seem to be a reason for the sell-off other than profit taking, so I'll just chalk it up to that. Look for the 30-day MA to provide support sitting right above the $6,000 level at $6,009.52.

Bitcoin

As for stocks, the market is ending the volatile week with a thud siting relatively unchanged as we enter afternoon trading. The DOW traded 10 points higher, erasing a 200-point drop, while the S&P 500 and NASDAQ traded below the flatline but also were off earlier lows.

Key Levels To Watch Next Week:

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The Second Marijuana ETF Is Now Open For Business

The AdvisorShares Pure Cannabis ETF (YOLO), the second pure play Marijuana Exchange Traded Fund began trading on Thursday, April 18th, (it would have been fun if the market had been open on April 20th). The fund is a direct competitor to the ETFMG Alternative Harvest ETF (MJ), the only other US traded marijuana ETF.

(It should be noted that the AdvisorShares Vice ETF (ACT) also is heavily invested in marijuana and cannabis stocks, but it also has a large percentage of its portfolio in tobacco and alcohol-related business, which have no connection to the marijuana industry).

The two funds will be direct competitors, but not because they are investing in the same companies due to the differences in each fund’s principal investing strategy based on their ‘Fund Prospectus,’ but solely because they are the only two ETF’s primarily focusing on cannabis-related businesses.

YOLO’s fund prospectus states the following; Continue reading "The Second Marijuana ETF Is Now Open For Business"

Auto Tariff Delay Lifts Market

Hello traders everywhere. The stock market opened in negative territory this morning with the DOW falling as much as 190 points in early trading before turning around to head into positive territory on news that President Trump is expected to delay a decision on tariffs on imported cars and parts by up to six months, according to multiple sources.

The early morning drop came after the release of weaker-than-expected economic data stoked fears that the U.S. - China trade war is dragging down global economic growth. U.S. retail sales fell 0.2% in April, the Commerce Department said Wednesday.

tariffs

Overnight, data released in China showed industrial production rose by 5.4% in April on a year-over-year basis, notching the slowest pace of growth since May 2003. Economists polled by Refinitiv expected an expansion of 6.5%. Chinese retail sales also disappointed economists. Continue reading "Auto Tariff Delay Lifts Market"