We’ve asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.
Precious Metal Futures-- Precious metals this week settled slightly lower in a volatile trade with the U.S dollar continuing its bullish momentum putting some pressure on gold for the week finishing down around $11 at 1,594 an ounce in the June contract settling lower this Friday while settling last Friday at 1, 598 an ounce still trading right above its 20 day moving average for far away from its 100 day moving average stuck in a 6 week consolidation unable to break out above 1, 620 despite the fact that there’s nervousness in European banks with you would think investors will be flocking to gold at this point but it has not happened at least not yet. Silver futures for the May contract settled about $.30 lower for the week still trading far below its 20 and 100 day moving average also stuck in a 6 week consolidation as I’ve stated in previous blogs until silver breaks $28 which it came close to in yesterday’s trade before rallying I still remain bullish on this sector and I do believe that the worst is over in the commodity selloff and if you look at the CRB index its trading at a 4 week high which is a commodity index which is a basket of commodities so I think the trend is starting to change. Copper futures had a lot of headlines this week were basically unchanged at 3.44 in a very nonvolatile trading week with Goldman Sachs stating a bullish recommendation on copper prices thinking that the abundant supply will dwindle quickly due to demand picking up, however there are many large hedge funds who are placing a large short position in copper thinking that prices are too expensive at these levels but time will tell to see who is correct. Platinum futures are trading at 1,576 an ounce still trading below go gold by about $20 and I have stated in many previous blogs I do think you should take advantage of the fact that platinum prices have sold off $160 from the contract highs in the last month or so and I do believe that prices are headed higher. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Stock Futures--- The S&P 500 hit new all-time highs today continuing its bull market climbing another 5 points trading at 1562 in the June contract trading far above its 20 & 100 day moving average with the treasury yields dropping significantly this week helping propel equity prices once again in an extremely nonvolatile trading range over the last month or so which is concerning to some traders with the Vix hitting new lows which is the fear indicator telling traders that there’s not much to worry about at this point, but my opinion when the Vix gets down to 12 or 13 historically volatility starts to come back in the market but only time will tell. The NASDAQ futures are hitting a fresh 12 year high up another 7 points at 2808 stuck in a sideways channel in the last month with terrific chart structure looking to grind higher and as I’ve stated in many previous blogs I have been very bullish the stock market and I do believe we are headed higher all due to the fact of the Obama administration continuing its easy monetary policies. The Dow Jones is trading 1,000 points above its 100 day moving average which tells me that this is a very strong trend and should continue for a while to come and now has rallied 2200 points since 11/16/12 and in my opinion I do believe the S&P 500 and the Dow Jones will continue to hit all-time highs in the next couple of months due to the fact of terrific earnings with low interest rates and a Federal Reserve that wants to prop up the market. The chart structure in all 3 indices is excellent at this point and in my opinion the further a market trades above the 20 and 100 day moving average that tells you that the trend is extremely strong and in this case this has been the best & strongest bull market we’ve seen in the last several months and I believe it will continue to the upside. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
Sugar Futures--- Sugar futures are breaking contract lows again this week currently trading at 17.63 down 22 points while selling off another 63 points this shortened trading week retesting contract lows which were hit on 2/15/13 at 17.67 trading far below its 20 & 100 day moving average which stands at 18.82 hitting a mew 2 ½ year low all on the fact that the port strike was averted & the fact that Chinese imports were less than expected in February sending prices down in the last week and if that level is broken on a closing basis you could possibly retest the 2010 area between 14 – $.15 a pound. I have been bullish sugar prices when prices hit 4 week highs and I’m still recommending if you’re long to place a stop loss at 17.67 and now that level has been broken you have to think that prices are headed lower at this point in time. Sugar has ample supply at this time even with the fact that Brazil is adding ethanol to the blend which should take some of the supply out of the market but at this point in time the bear market seems to be continuing. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Cocoa Futures--- Cocoa futures are rallying for the 3rd consecutive trading session in New York up another 23 points at 2173 looking to break out to a 6 week high after settling last Friday at 2159 continuing its slow grind higher this week with excellent chart structure looking to continue its bullish momentum and in my opinion I do believe that a head and shoulders bottom has appeared on the daily chart while cocoa has broken above the 20 day moving average but is still far below the 100 day moving average which stands at 2271 while we are currently trading at 2173 with the seasonal rally possibly underway due to the fact that the harvest is over in West Africa. The 10 day low in cocoa is at 2075 so if you’re looking to take a shot on the upside that is where I would place my stop risking around $1,000 per contract with the contract lows developing earlier this month on 3 – 7 at 2034 if you’re looking to take more risk you can possibly place your stop below that level remembering to always play stop losses to try to minimize your risk because the trend can change very quickly and you never want to marry a trade that can develop huge monetary losses. In my opinion I believe that many of the commodity markets have acted very solidly in the last couple months despite the fact that the U.S dollar has entered a bull market while many of the commodity prices at this point seem to have stopped going lower so I’m still recommending buying cocoa at this price placing a stop reducing monetary losses. Cocoa sometimes mirrors the grain market during harvest season because once the seasonal harvest is done in the month of October in the grains prices start to climb while the same thing with cocoa with a large harvest in West Africa now finished that means there is less supply coming onto the market here in the next couple of months therefore the seasonal rally might be underway. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Coffee Futures--- Coffee futures in New York are higher by 40 points in the May contract at 136.80 this Thursday afternoon in New York trading basically unchanged for the trading week now is 4.5% from contract lows of 132.05 which happened on 3 – 20 – 13 which was just about a week ago but it is still trading below its 20 day moving average which stands at 139.50 which is an eyelash away with the 100 day moving average all the way at 149.00 which is still quite a distance from today’s prices. There are a lot of mixed signals in the coffee market as I’ve talked about in the past but if you’re a long-term investor with deep pockets I believe coffee prices down at these levels will reward you in the long run as Brazilian producers are holding back crops because they think prices are too low and we are having a rust problem in Central America as well as a drought in Vietnam, however the one negative is a huge crop coming out of Brazil and that is what is keeping a lid on prices as we enter the extremely volatile coffee season come May and June so I do not think this low volatility is going to continue much longer. The coffee chart has excellent structure allowing you to place tight stop losses minimizing your risk in case the trend does change but I still have a hard time being short coffee down at these prices because I do believe in the next couple of months we will be higher due to the fact that the harvest season will be over soon and if there is any weather scares such as cold temperatures you will see spikes in prices to the upside in my opinion. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Grain Futures— Corn stocks at 5.400 billion bushels were 370 mb above the average trade guess and really takes the pressure off the rationing process. Could imply ending stocks close to 1.0 billion.Bean stocks at 999 million bushels were 52 mb above the average trade guess and takes a lot of pressure off the rationing process. Could imply ending stocks close to 175 million.Wheat stocks at 1.230 billion bushels were 63 mb above the average trade guess and leaves wheat in a comfortable stock situation. Could imply ending stocks close to 780 million.
Corn acres at 97.3 million were right on the average trade guess and considered neutral.
Bean acres at 77.1 million were 1.3 million below the average trade guess and considered friendly.
Wheat acres at 56.4 million were nearly right on the average trade guess and considered neutral.
The stocks numbers are bearish and old crop prices may have to work even lower from here. Prices may bounce from time to time, but the general trend may still be lower for a while. There are some circumstances that I believe will result in more downside pressure before we see any kind of sustained recovery.
1. Prices had already seen a substantial bounce (corn 55 cents, beans 56 cents, wheat 55 cents).
2. Technical indicators were already over-bought in corn and wheat.
3. Funds have been recent buyers by adding new longs and also covering shorts. They will likely be in NO rush to be buyers.
4. End users likely had some decent coverage heading into the reports just in case the numbers were bullish. Therefore, end users likely have the ability to sit back and wait for at least a week or two; maybe even a month or two for some.
5. End users and traders alike will now ask “why should I buy when the new fundamentals are bearish and the trend is down?”.
6. These latest stocks numbers really take the pressure off of the rationing process. The higher stocks don’t eliminate the rationing process, but they do greatly reduce it. Brought To You By Heartland Partners
Natural Gas Futures-- Natural gas futures continued their bullish run this week after the Energy Information Administration announced a decline in U.S. inventories that was more than expected as supplies fell 95 billion cubic feet for the week ended March 22, the EIA said. Analysts polled by Platts forecast a decline between 83 billion cubic feet and 87 billion cubic feet. Total stocks now stand at 1.781 trillion cubic feet, down 642 billion cubic feet from the year-ago level and 61 billion cubic feet above the five-year average climbing another up another 10 points for the trading week hitting and a new 52-week high trading way above its 20 & 100 day moving average great structure and I still believe in my opinion that we are headed significantly higher from these depressed levels and as I’ve stated in many previous blogs I do believe the U.S government is going to start mandating usage for natural gas and there are several reports that came out today of companies trying to switch from coal to natural gas in the short term which is just going to fuel higher demand. If you look at my previous blogs I continue to be extremely bullish this market I do believe we could possibly double in natural gas in the next 1 or 2 because demand is going to increase significantly as people want a cleaner fuel and the United States has an abundance of natural gas as well .Natural gas prices in the last 6 weeks have rallied about 75 points but are still relatively low historically about 5 years ago we were trading at about 13 so we are substantially lower than those levels but that was during the commodity boom of 2008 when crude oil also hit $147 a barrel but I do not believe prices will head up to that level but I do believe prices could double in the next couple years and I’m advising all traders especially ones with deep pockets and long-term horizons to buy natural gas in the December 2015 contract even after this recent rally. TREND: HIGHER –CHART STRUCTURE: EXCELLENT
There are many different theories about how long does a meaningful consolidation have to last before you enter a trade on the breakout to the up or downside? In my opinion I always want to see a consolidation that lasts at least 8 or more weeks before I would consider entering. The reason that I want a longer consolidation is to try and avoid a bunch of false breakouts such as a 10 or 15 day consolidations which happen all the time, so I am trying to put the odds in my favor by trading the breakout of at least 8 weeks or more and the longer such as a 11 or 13 week consolidation the better. At this present time 2 commodities are in a major consolidation including wheat which is in a 14 week tight channel looking to breakout very soon and feeder cattle which is at a 13 week consolidation.
If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 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.
Michael Seery, President
Seery Futures
Twitter–@seeryfutures
Phone # (800) 615-7649
