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.
Gold Futures
Gold futures had a wild trading week with a $30 up day and $30 down day finishing up about $5 for the trading week in the February contract going out this Friday in New York at 1,235 an ounce finishing up $11 this Friday afternoon as the trend still remains bearish in my opinion & I still believe that there’s a high probability that prices will retest the summer lows of 1,180 here in the next couple of weeks. Next week will be very interesting to see if the Fed does taper bond purchases and how these markets will react so expect extreme volatility in the precious metals especially if tapering is announced. I would definitely expect prices to drop rather significantly quickly but the opposite could happen as well as if there is no tapering you could get a big knee-jerk reaction to the upside so I’m advising just to sit on the sidelines and see what the statement says and go from there because it’s like flipping a coin at this time but the trend is to the downside so at least in the short-term prices still look vulnerable. Gold is still trading below its 20 and 100 day moving average we really have gone nowhere in the last month but we had extreme volatility as there is major support down at those levels. Gold is down about 35% from its all-time high of about 1,900 just a couple years ago and eventually there will be a bottom in this market I just don’t think quite yet.
TREND: LOWER
CHART STRUCTURE: OK
Silver Futures
Silver futures had a very wild trading week trading as high as 20.43 before selling off nearly $.90 in Thursday’s trade but reversing today finishing higher by $.18 Friday afternoon in New York closing at 19.64 an ounce in the March contract as traders are waiting next week’s Federal Reserve statement on possible tapering and if tapering occurs I would suspect that silver prices could head back down to the summer lows of around 18.00 an ounce but it will be interesting to see how the markets react as you never know it could be a relief rally that when the uncertainty is over the market actually goes higher so I am suggesting to sit on the sidelines and wait to see what the statement says but the trend in silver currently is lower it’s just a matter of how much lower can prices go. As I’ve talked about in many previous blogs I’m bullish silver and the lower prices go the more attractive it becomes in my opinion & if you’re lucky enough to scoop up prices at $17 – $18 I think you will do very well if you have a long term horizon as demand for silver is increasing as the electronic technologies continue to be the way of the future.
TREND: LOWER
CHART STRUCTURE: OK
Japanese Yen
How much lower can the Japanese Yen go against the U.S Dollar? I keep talking about the Yen on several different occasions and I remain very bearish while its trading far below its 20 and 100 day moving average down over 30 points last week creating another 4 ½ year low and this Friday afternoon continuing the best down trend in the commodity markets in the last couple of months. The Yen is down for the 2nd consecutive trading session trading at 97.00 in the March contract as massive money printing in Japan is helping continue its steep decline in recent weeks and months & in my opinion I believe the Yen is headed down to the 85 level in the next couple of months due to the fact that the Japanese government is forcing the Yen lower against the U.S dollar trying to spur their exports and improve their economy by lowering the value of their currency hitting a fresh yearly low once again today and I am still advising traders to be short the Japanese Yen. Remember when you trade commodities you will be wrong sometimes so you must put a stop loss and not marry your position because never getting out causes exaggerated monetary losses so always risk between 1-2% of your account balance on any given trade trying to minimize risk.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Natural Gas
Natural gas futures were up another 24 points this week in the January contract trading at 4.35 still above its 20 & 100 day moving average now hitting a 6 month high continuing its bullish momentum with extreme cold weather throughout much of the country stirring up demand as temperatures are far above average causing natural gas prices to continue its bullish run. Many of the other commodities are starting to move higher with natural gas and in my opinion a triple bottom has occurred around 3.50 and as I’ve written in many previous blogs I am just outright bullish the natural gas sector due to the fact that I do believe the United States government is going to mandate natural gas usage here in the next 3 to 5 years which could double or triple prices just on demand without factoring any weather premium and in my opinion I’m advising all investors who have a long-term horizon to be buying natural gas in the December contract of 2015 and holding because prices could skyrocket from these ridiculously low levels. Remember natural gas prices traded as high as 13 – 14 just in the year 2008 that’s how far we’ve come and with the green energy policies and the trend getting away from fossil fuels continuing I believe natural gas demand will soar in the next decade as traders will shake their heads wondering why they were not in natural gas at 4.00.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures for the January contract finished the week slightly higher going out today in Chicago at 13.26 bushel still stuck in a 2 week consolidation trading near the upper end of its trading range still in a mildly bullish trend trading above its 20 and 100 day moving average just barely as I think prices may have peaked earlier in the week as corn and wheat prices continue to move lower. I am remaining neutral in the soybean complex as soybean oil continues to move lower while soybean meal has huge demand & is right near contract highs so I’m sitting on the sidelines and waiting for some type of solid trend to develop as I do think it will be another interesting spring and summer but I think choppiness still lies ahead as I want to find a market that is moving in one direction or the other as choppy trends are difficult to make money. South America crops look very good at this time and should produce another record harvest come March which could put a lid on U.S soybean prices as supplies are increasing and if you look at next year’s crop which is the November contract prices already are down around 11.50 so investors already realize that supplies are on the rise especially with a possible record crop coming here in the States next year.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Corn Futures
Corn futures in the March contract finished down $.09 this Friday afternoon as well as for the trading week closing around 4.25 a bushel still in a sideways pattern with a possible double bottom at 4.20 and stiff resistance at the recent high of 4.40 as there is very little fundamental news to dictate a new trend. I have been bearish corn forever it seems like but right now I’m neutral this market but I do think prices are headed lower especially with wheat hitting a new 1 ½ year low I think that will also push down corn prices as supplies are just going higher and if we have a record crop next year you could see really depressed prices in the sector as too many acres will be planted once again. The weather down in Brazil and South America is outstanding and should produce another great corn crop while volatility has increased recently I do think you will see the slow grind lower going into spring and then the weather market starts and the real volatility starts to kick up. If you’re looking to get short the corn market I would simply sell a futures contract here placing your stop above the 10 day high at 4.41 risking around $650 per contract as I think there is a big-time possibility that corn trades in the $3 area in the next 2 to 3 months in my opinion.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Wheat Futures
Wheat futures continued their bearish trend finishing down around $.23 for the trading week finishing lower for the 2nd day in the March contract going out this Friday afternoon in Chicago at 6.29 & I’m still recommending a short position placing your stop above the 10 day high which is around 6.73 risking around $2,400 per contract if you’re looking to enter at today’s price, however that stop will be lowered every single day as this trade looks to crack the $6 level in the next couple of weeks in my opinion. Wheat futures are trading far below their 20 & 100 day moving average which tells you the trend is to the downside as worldwide wheat supplies are huge with excellent growing conditions here in the Great Plains which should produce another record crop as the grain market is starting to balloon with supplies and I do believe these markets are headed lower especially wheat as it would not surprise me in the next 3 to 6 months if wheat was trading in the $4 range. If you agree with my analysis I would look at the March wheat puts limiting your risk to what the premium cost because I do believe with wheat hitting 1 ½ year lows we could retest levels from June of 2010 at around 4.50 as corn and wheat both remain bearish with oversupply issues.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Cotton Futures
Cotton futures continued their bullish momentum finishing higher for the 4th consecutive trading day rallying over 300 points for the trading week trading above its 20 & 100 day moving averages with a nice rounding bottom on the daily charts prices look to retest early October lows of 87 here in the next couple of weeks possibly as the tide has turned in many of the soft commodities including orange juice, coffee, and now cotton to the upside despite the fact of a possible tapering announcement next week. I talked about picking a bottom in cotton in last week’s commentary placing your stop below the 10 day low when the breakout was at 80.00 and I’m still recommending to stay long and remember just to continue to raise your stop to the 10 day low therefore protecting profits as the trend still could move higher despite bearish fundamentals at this time
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee futures have broken out to a 7 week high trading nearly up 900 points this week currently at 115.20 in the March contract as a possible bottom has finally been formed after hovering around 5 year lows as the bulls have come back in this market with the next major resistance at 120. If you think coffee prices have bottomed my recommendation would be to buy a futures contract place a stop below the contract low of about 104 risking around $4,000 per contract as coffee is one of the largest commodities contracts with as every 100 points equaling $375 profit or loss. The fundamentals have not changed in coffee with large world supplies and low demand at this time but eventually prices come to a bottom but I’m not 100% convinced that the selloff is over but I certainly would not be short this market as the short term trend is higher and I always try to trade with the short term trend. Coffee futures are trading above their 20 day moving average but still below their 100 day moving average which stands at 119 and I suspect that there will be some buy stops up at that level so prices could still have more room to run to the upside in the next several days.currently.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Rounding Top & Bottom Formations---LOOK AT THE COTTON CHART---Rounding bottom chart patterns in the commodity markets are considered as a bullish signal which indicates a possible reversal of the current downtrend to a new uptrend and generally takes at least 1 month or longer to form so patient is a virtue when you are looking for rounding bottoms, however these indicators can be profitable because in my opinion they are 1 of the best trading indicators out there. These rounding bottom chart patterns in the commodity markets are a long-term reversal patterns that signals a shift from a downtrend to an uptrend. This pattern can also be used as a rounding top signaling that prices have peaked and look vulnerable to the downside. They are elongated and U-shaped, and are sometimes referred to as rounding turns, bowls or saucers. The pattern is confirmed when the price breaks out above its moving average which also is considered a bullish trading indicator especially if the chart pattern breaks the 20 & 100 moving averages.
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
SEERY FUTURES ACCEPTS CANADIAN COMMODITY ACCOUNTS
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.
Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: (800) 615-7649
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