Tag: risk management

The commodity markets were absolutely crushed Thursday afternoon, experiencing some extreme losses that I have not witnessed for quite some time. We saw -5% to -10% declines across the board. The Federal Reserve announced that they would start to raise interest rates next year as that sent the momentum to the downside as investors did not like to hear that information as higher rates are bearish commodity prices.

I have been trading these markets for around 30 years, and I have seen a sharp sell-off before as we may have gotten a little ahead of ourselves. However, I still believe you take advantage of massive sell-offs as the long-term secular bullish trends are still intact.

If you have been following my previous blogs, you understand that I try to risk around 2% of my account balance on any given trade, as this is an excellent theory. All you have to do is look at what happened over the last couple of days, especially in the metals and the grains, and if you do not follow that rule, you could lose a substantial amount quickly.

Sugar Futures

Sugar futures in the October contract settled last Friday in New York at 17.67 while currently trading at 16.76, down another 90 points continuing its bearish momentum as prices have now traded lower five out of the last six trading sessions. The commodity markets across the board are taking a beating this week because interest rates could rise in the coming year ahead. Continue reading "What Happened To The Commodity Markets?" →

Crude Oil Futures

Crude oil futures in the July contract settled last Friday in New York at 66.32 a barrel while currently trading at 69.64, up over $3 for the trading week as prices are right at a 3 year high.

Currently, I am not involved, but I think higher prices are ahead, and if you are long a futures contract, I would continue to place the stop loss under the 2 week low of 73.63 as the proper exit strategy. However, the chart structure will improve daily; therefore, the monetary risk will be reduced.

The main reason for the rally that we have experienced in 2021 is because the Biden administration is against fossil fuels. They have canceled the Keystone Pipeline, coupled with the fact that they are not allowing drilling in certain parts of Alaska as this situation will not end anytime soon. I think there's a chance we will be at $100 oil in the coming months ahead.

Crude oil is trading for above its 20 and 100-day moving average, telling you that the trend is to the upside. Gasoline and heating oil are experiencing long-term bullish secular trends, and I see absolutely no reason to be short as this situation will become dire as time goes by as now we rely on hostile foreign governments for much of our energy supply.

TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Cocoa Futures

Cocoa futures in the July contract settled last Friday in New York at 2468 while currently trading at 2451 down slightly still stuck in a 3 month consolidation pattern looking to break out soon, in my opinion. Continue reading "Weekly Futures Recap With Mike Seery" →

Silver Futures

Silver futures in the July contract settled last Friday in New York at 27.48 an ounce while currently trading at 27.88, up about $0.40 for the week as prices have been stuck in a 2 week consolidation pattern.

I have been recommending a bullish position from around the 25.85 level, and if you took that trade, continue to place the stop-loss under the 2 week low, which now stands at 27.26 on a closing basis only. The chart structure is outstanding as we are only an eyelash away from getting stopped out.

Silver prices are still trading above their 20 and 100-day moving average as the trend remains to the upside. I still think prices will crack the 30 level. I also have a bullish recommendation in the platinum market as I think that will join the party eventually.

I think the entire precious metal sector continues to move higher throughout 2021 as I will be looking at adding more contracts to the upside if prices break the 30 level, so keep a close eye on this market as we could be doubling up in next week's trade as I see no reason to be short.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

Orange Juice Futures

Orange juice futures in the July contract is trading higher for the 3rd consecutive session, up another 70 points at 119.25 after settling last Friday in New York at 117.95 as prices have now hit a 10-week high. Continue reading "Can Silver Futures Crack $30?" →

Silver Futures

Silver futures in the July contract settled last Friday in New York at 25.87 an ounce while currently trading at 27.48 up over $0.60 for the week, continuing its bullish momentum as prices are near a 2 1/2 month high.

I have been recommending a bullish position from around the 25.85 level, and if you took that trade, continue to place the stop loss under the two-week low standing at 25.74 on a closing basis only as the proper exit strategy. The next major level of resistance stands at the 28.00 / 28.25 level as that could be broken in next week's trade, and if that does occur, I think we will test the 30 level soon.

I also have a bullish platinum recommendation, and I think gold and copper will continue to move higher as I see no reason to be short this sector. The U.S dollar has hit a two-month low this week as that is a bullish factor towards silver coupled with the fact that the 10-year note has hit a two-month low in yield at 1.53% as this market fundamentally and technically speaking has everything going for it, so stay long.

TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Copper Futures

Copper futures in the July contract is trading higher for the 3rd consecutive session, up another 1260 points or 2.75% at 4.7285 a pound, hitting an all-time high this week as this gravy train continues its bullish momentum. Continue reading "Could Silver Futures Hit $30?" →

Natural Gas Futures

Natural Gas futures in the June contract is currently trading higher by 3 points at 2.94 as prices are right near a two-month high, continuing its bullish momentum in this week's trade.

I have been recommending a bullish position initially in the May contract at the 2.66 level. If you took that trade, the stop-loss has been raised to the 10-day low, which now stands at 2.73 as an exit strategy as to chart structure will also improve daily; therefore, the monetary risk will be reduced.

Fundamentally speaking, gas prices have underlying support from expectations for increased heating demand for nat-gas after Maxar said below-normal temperatures are expected for the central and eastern U.S. from May 4-8. Strength in foreign demand for U.S. nat-gas supplies is bullish for prices. Gas flows to U.S LNG export terminals on Thursday rose +64% y/y to 11.4 bcf. On Apr 18, gas flows to U.S LNG export terminals climbed to a record 11.921 bcf (data from 2014) according to BNEF.

Gas prices are trading above their 20 and 100-day moving average as this trend remains strong to the upside. I believe the 3.08 level, which was hit on Feb 18, will be breached in the coming days ahead as the entire energy sector remains in a longer-term bullish secular trend. In my opinion, there is room to run to the upside, so stay long as the volatility also should start to escalate in the coming weeks ahead.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Cotton Futures

Cotton futures in the July contract settled last Friday in New York at 88.80 while currently trading at 87.80, down about 100 points for the trading week. However, prices remain in a strong bullish trend to the upside. Continue reading "Futures Market Trending Higher" →