Gold Futures
Gold futures in the August contract settled last Friday in New York at 1,780 while currently trading at 1,788 an ounce in a holiday-shortened trading week continuing it's bullish momentum as prices did crack the critical 1,800 level earlier in the week.
Currently, I am not involved as my only precious metal recommendation is a bullish silver trade. However, I do have a bullish bias as I do think gold prices will crack the 2,000 level, and if you are long a futures contract, I would place the stop-loss at the 10-day low standing at 1,753 as an exit strategy as the chart structure is outstanding at the current time. Gold prices are trading above their 20 and 100-day moving average as the trend remains to the upside as prices still finished about $9 higher today even though the jobs number came out, adding 4.8 million jobs, which is remarkable in my opinion as that is generally a fundamental bearish factor. Still, there is a lot of demand for gold at present. The Federal Reserve continues to promise that they will add more liquidity to the system with another possible 1 or 2 trillion-dollar stimulus package on the way that should continue to push gold higher, so stay long as I see no reason to be short.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH
S&P 500 Futures
The S&P 500 in the September contract is trading higher for the 4th consecutive session reacting very positively to the unemployment number, which was released today, stating that the United States added 4.8 million jobs sending prices up 41 points currently trading at 3,144 or 1.33% higher. If you've been following my previous blogs, you understand that I am not involved. Still, I do have a bullish bias as I think the equity markets will continue to move higher as I see no reason to be short as the Nasdaq-100, which has hit another all-time high in today's trade.
The S&P 500 is trading above its 20 and 100-day moving average as the trend has turned to the upside as the US economy will not shut down again. The market is reacting to that fundamental news as the worst most likely is over with as I do believe the 3,400 level will be tested, which was the all-time high hit on February 20th in the coming months ahead. If you are long a futures contract stay long as another fundamental bullish factor is that the Federal Reserve might add another stimulus package as they have certainly helped propel this market to the upside. As the old saying goes, you don't fight the FED as this market looks to move even higher.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE
Silver Futures
Silver futures in the September contract settled last Friday in New York at 18.16 while currently trading at 18.37 while experiencing a wild trading week. I have been recommending a bullish position from around the 18.61 level, so continue to place the stop loss at the 17.17 area. However, that will be raised in next week's trade; therefore, the monetary risk will also be reduced.
The monthly unemployment number was released today, showing that America added 4.8 million jobs as that is a positive fundamental factor towards silver prices. This commodity is used as an industrial metal, and the stronger the economy that means more demand for silver as I remain bullish. Silver prices are above their 20 and 100-day moving average as the trend continues to the upside as the entire precious metals sector across-the-board, I believe, will move higher as I'm keeping a close eye on platinum.
Volatility in silver is becoming higher and higher every week, so if you are involved, make sure that you only risk 2% of your account balance on any given trade as the proper money management technique as silver can experience huge price swings daily causing high risk.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH
Platinum Futures
Platinum futures in the October contract settled last Friday in New York at 819 while currently trading at 829 an ounce up slightly for the trading week holding major support around the 800 level as this market looks to move higher in my opinion. Fundamentally speaking, platinum is used as an industrial metal. The stronger the US economy becomes, the more demand for platinum, which generally pushes prices higher, and I think that situation is going to come about soon as I do believe a bottoming out pattern has formed.
I will be recommending a bullish position if prices break the 876 level, which could happen in next week's trade. However, if you are already long a futures contract, I would place the stop loss under major support around the 798 level as an exit strategy. Platinum prices are now trading right at their 20 and 100-day moving average. The trend remains mixed as we have gone sideways over the last 4 weeks as my only precious metal recommendation is in the silver market at the current time. Still, I think the whole sector is going to move higher as I see no reason to be short platinum, so keep a close eye on this market as we could be involved soon.
TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE
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Coffee Futures
Coffee futures in the September contract settled last Friday in New York at 96.65 while currently trading at 103.00, having one of its best weeks since March as prices have hit a 4 week high. Coffee prices are trading above their 20-day but still below their 100-day moving average as I'm currently sitting on the sidelines as I'm not convinced the bottom is at hand. However, many commodity sectors have started to rally as there is the possibility that coffee has finally bottomed at a 14-year low.
At the current time, the risk/reward is not in your favor to take a bullish position as I believe it is time to be neutral, but keep a close eye on this sleeping giant as a long-term bottom may have been formed finally. Fundamentally speaking, prices moved higher with arabica coffee at a 1-month high and robusta coffee at a 2-week high on signs of smaller global coffee supplies as the International Coffee Organization (ICO) on Wednesday reported that global Oct-Jun coffee exports fell -4.7% y/y to 83.8 mln bags.
My only soft commodity recommendation is a bullish cotton trade, which is right near a 4 month high. Still, it looks to me with all the stimulus packages that the Federal Reserve has put in place to push commodity prices higher going forward.
TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING
Cotton Futures
Cotton futures in the December contract settled last Friday in New York at 59.50 while currently trading at 62.60 down slightly this Thursday afternoon breaking a 3-day winning streak, however prices are still hovering right near a 4 month high. I have been recommending a bullish position from the 62.20 level while placing the stop-loss under the June 23rd low of 58.55. The risk was around $1,700 per contract plus slippage, and commission as a breakout to the upside has occurred, in my opinion.
The USDA crop report, which was released earlier in the week, stated that the United States only planted 12.19 million acres as estimates were 13.15 as we should not produce a record crop in 2020. The fundamental and technical picture for this commodity has turned to the upside, coupled with the demand for coming back from China. Mexico also announced that its production of cotton would be the lowest since 2017. It added more fuel to the fire as the 7/10 weather forecast has higher than normal temperatures coupled with below-average rainfall, so stay long as there is room to run.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING
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.
