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 in the June contract are trading below their 20 day but above their 100 day moving average telling you that trend is mixed after settling last Friday at 1,294 going out today at 1,303 up slightly for the week and basically has retraced about 50% from contract lows to recent highs so if you are bullish this could be a great opportunity to finally get long once again. I am neutral in the gold market currently so I’m not recommending any position as the trend is not strong and if there is a trend in my opinion it’s to the downside as the stock market continues to make all-time highs so the demand for gold is weakening. The chart structure in gold is poor as well which does not allow you to place tight stops minimizing your risk so wait for better chart pattern to develop before entering a new position. Gold has sold off $100 in the past couple of weeks as the Ukrainian crisis has finished but this market is very volatile so you can also look at the option market limiting your risk to what the premium costs so if your bullish look at bull call spreads possibly for the month of June or if you’re bearish look at a bear puts spreads for the month of June.
TREND: LOWER
CHART STRUCTURE: POOR
Silver Futures
Silver futures in the May contract are trading right at their 20 and 100 day moving average with very little volatility in the last several weeks settling last Friday at 19.79 and going out this week on a strong note finishing up $.25 this afternoon in New York closing around 20.06 as I do think silver prices are bottoming. If you read any of my previous blogs I continue to harp on the fact that if you’re a long-term investor I think silver prices are very cheap and if you look at the daily chart prices are unable to break $19 an ounce as this is been an excellent buying opportunity in the past so I’m recommending to get long the silver market as the commodity markets in general have been moving higher & silver will start to follow in my opinion. The chart structure in silver is outstanding allowing you to place a stop below $19 if that make you feel better but I would buy this market without placing any stops as I do think the longer-term horizon in silver prices is higher and will be back up to $30 range eventually.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Crude Oil Futures
Crude oil futures are trading above their 20 and 100 day moving average settling up a $1.75 in the last 2 trading sessions closing out this Friday afternoon in the May contract at 101.05 a barrel right near 4 week highs as the chart looks bullish in my opinion, however at this point in time I am not involved in this market but if prices do break 102 a barrel I would be looking at purchasing a futures contract while placing my stop below the 10 day low which is around 99.00 risking around 300 points or $1,500 per contract if your trading the crude oil mini. The chart structure in crude oil is starting to improve as prices fell earlier in the month due to the fact that the Ukrainian crisis ended only to rally back as we enter the strong demand season as crude oil & unleaded gasoline are both headed higher in my opinion, however make sure that you do have a proper risk management system in place minimizing your risk in case the trend does change and you could even put that stop at 97.00 you want to be a little safer & give yourself a little more room therefore risking around $2,500 from today’s price level. Crude oil prices have been rather choppy in recent months as a strong trend has not developed & as a trader I must find markets that have a strong trend and that is the reason why I have avoided crude oil for quite some time but eventually this market will have the proper risk reward situation.
TREND: MIXED
CHART STRUCTURE: IMPROVING
Coffee Futures
Coffee futures in the May contract are trading below their 20 day but above the 100 day moving average settling slightly higher for the week and up sharply this Friday afternoon in New York climbing over 1000 points breaking out of a 2 week consolidation trading at 185.00 and I do think there’s a high probability that coffee prices will retest 210 a pound here in the next couple of weeks as there is major support at 166 so continue to look at this market to the upside. Coffee prices sold off 4500 points in 2 weeks only to start to rally once again as the crop in central Brazil has been devastated due to a tremendous drought & my contacts out of Brazil continue to think higher prices are ahead as the estimates of this year’s crop will be lowered in my opinion so continue to play this to the upside placing your stop loss below 166.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Sugar Futures
Sugar futures finished down about 75 points for the trading week right at major support around 17.20 and this market has been choppy and I’ve been recommending to sit on the sidelines in the sugar market as there really is no trend at this point and wait for better chart structure to develop before entering. Sugar futures are still digesting the sharp run-up in prices in the month of February coming from 15.00 to 18.50 and now we’re consolidating looking for some fresh fundamental news as the fact of the drought in central Brazil have sent prices up about 20% from contract lows but at this point I’m not sure where prices are headed so I’m going to wait for a trend to develop but if you want to get in this market on the long side my suggestion would be to buy at today’s price put your stop below the 10 day low risking around 40 points or $450 per contract.
TREND: MIXED
CHART STRUCTURE: IMPROVING
Soybean Futures
Soybean futures in the November contract finished up about 17 cents for the trading week closing around 12.08 a bushel rallying towards the closing bell this Friday afternoon as this market still remains bullish and I continue to recommend a long position placing your stop below the 10 day low as I do think the next price level that will be retested once again is 12.19 which was hit in Wednesdays trade before the sell off occurred as weather problems are already happening with a very late winter and an extremely cold Spring with heavy rains across the Midwest and snow in parts of Wisconsin so planting season could be delayed if this weather continues. Soybean futures are trading above their 20 and 100 day moving average with excellent chart structure as this market has been grinding higher despite the fact that of a 6% increase in planting this year versus 2013 which could produce a record crop of around 3.5 billion bushels which would send prices sharply lower come harvest time in October but it is a long growing season and I am a short-term trader who follows the trend which currently is higher. If you’re longer-term investor & like trading the options market my recommendation would be a 2 by 3 call ratio spread buying the 12.60 November soybeans calls: selling 3 of the 14.00 November soybeans calls as a spread as I believe this trade has a high probability of success with the risk reward situation in your favor tremendously so if you have any questions about option trade feel free to give me a call.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Cotton Futures
Cotton futures are trading above their 20 & 100 day moving average settling last Friday at 93.74 going out today around 92.40 up about 140 points this Friday afternoon as the trend has become neutral as prices have consolidated in the last several weeks and if you do have a long futures position in this market I would place my stop at 90.00 which is 200 points away or $1,000 per contract. I’ve been recommending a long position in cotton for quite some time as I do think prices are headed higher, however make sure you do place your stop at that level because prices can turn on a dime as I always want to keep my risk management system in place. The grain market has surged in price the last several weeks and I think that will start to affect cotton prices to the upside as well remembering the fact that there is solid demand for this commodity, so I do believe higher prices are ahead. The chart structure in cotton is outstanding at this time allowing you to place tight stop losses so if you are looking at buying this market for the 1st time my recommendation would be to buy at today’s price placing your stop at 90.00 risking $1,000 per contract.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
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
Orange Juice Futures
Orange juice futures are trading above their 20 and 100 day moving average currently trading at 154.50 as I am sitting on the sidelines waiting for a trend to develop but I do think prices are going higher I as I’m looking for a break out above 156 to enter on the long side so keep a close eye on this as I do think prices will break out of this consolidation in the next several trading sessions.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Corn Futures
Corn futures in the December contract rallied $.19 this week to close at 5.07 bushel right at recent highs as prices have rallied due to the fact that the USDA came out stating that there will be 4% less acreage down to about 91.4 million acres which could produce crop of about 13.5 billion bushels which is about 500 million bushels smaller than last year sending prices to 6 month highs and I’ve been recommending a long position in corn since prices broke 4.60 and I still think prices are headed higher, however if you have not participated in this market I would sit on the sidelines currently and wait for some type of pullback. The long winter and wet spring will affect corn planting more than soybean planting as corn is planted earlier as the South has already begun planting with such states as Mississippi & Georgia about 25% completed already. Here in the Midwest planting doesn’t begin until around the 3rd week of April so we will see what type of weather pattern develops in the next 3 weeks and how it will impact prices.
TREND: HIGHER
CHART STRUCTURE: AWFUL
Bond Futures
The 5 year note rallied sharply this afternoon in Chicago after the monthly unemployment report showed that we added about 190,000 new jobs which was in line and in my opinion should have been bearish the bond market but prices rallied sharply finishing at 119-01 after hitting 10 week lows earlier in the trading session as interest rates are on the rise despite today & if you’ve been following any my previous blogs I have been extremely bearish the bond market as I do think interest rates are moving higher and I’m recommending a short position in futures contract as the federal government is starting to taper bond program and with higher commodity prices. The bond market certainly place to go higher my opinion. The five-year note is trading below its 20 and 100 day moving average and if you have deep pockets I have stated many times before continue to sell the futures contract and wholeness trade as I think a bottle has been created in this market ever since the 2008 financial collapse the government has been purchasing bonds and on the fact that they are going to slow down and stop by September tells me trouble is on the way to get short this market my opinion.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Cocoa Futures
Cocoa futures remained in a 9 week tight consolidation between 2900 – 3050 as I have been recommending a long position in cocoa for quite some time as the trade fizzled out stopping us out in Wednesday's trade for a slight loss and is now I’m sitting on the sidelines waiting for another trend to develop. If you're looking to get short this market I would wait for a break underneath 2890 then place your stop above the 10 day high or if you’re looking to get long this market I would buy at today’s price placing your stop at 2900 as the chart structure remains outstanding allowing you to place very tight stop losses minimizing monetary risk. Cocoa futures traded higher by 45 points this Friday afternoon in New York to close at 2962 and has tested the 2900 level in the last couple of months on 6 different occasions and unable to break that level so there is major support developing, however the trend is sideways and as a trader I must look for trends because that is where you make your money as sideways markets are choppy and choppiness is not what you’re looking for.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Live Cattle Futures
Live cattle futures in the June contract hit 4 week lows today closing on a sour note finishing down 220 points settling at 135 as traders took profits and I’ve been recommending a long position in cattle for quite some time but today we were stopped out so now you should sit on the sidelines and wait for a better trend to develop as this was a successful trade it just ran out of steam in the last month. Cattle futures are now trading below their 20 day but still above their 100 day moving average which tells you the trend is mixed so move on to another market and just keep an eye on this as choppiness is probably ahead.
TREND: MIXED
CHART STRUCTURE: POOR
Feeder Cattle Futures
Feeder cattle futures were sharply lower this Friday afternoon in Chicago finishing down 160 points to close around 178.50 in the May contract I’m still recommending a long position in this market while placing your stop at the 10 day low at 175.80 risking about 130 points or $650 from today’s price level per contract. Cattle prices were down about 200 points for the trading week as prices hit all-time highs last week as this market continues to defy gravity as the fundamentals support prices and I do think could support prices even at higher levels as the herds are the smallest in over 6 decades which is a staggering number considering the fact that the population much higher than it was 60 years ago. We are entering the strong demand season for beef which could also propel prices higher but eventually everything comes to an end that is why I keep my stop at the 10 day low and if stopped out I will reevaluate the situation and wait for another trend to develop.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Mexican Peso Futures
The Mexican Peso was up 40 points this week closing at 7635 trading higher 9 out of the last 11 trading sessions hitting 3 month highs breaking out to the upside in my opinion as I have been recommending a long position from 7550 but if you still want to get long the Mexican Peso buy at today’s price of 7635 placing your stop below the 10 day low which currently stands at 7450 risking 185 points or $900 per contract. As a technical trader the only reason I want to buy this market is because the risk /reward is in your favor and whenever that situation occurs I believe you have to take the trade even if you have doubts. The Mexican Peso is a very trendy currency just like many of the commodities as it will start a trend and go in that direction for quite some time as I’ve had experience with this in the past, so take a chance on this currency making sure that you place a tight stop.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
Rough Rice Futures
Rough Rice futures for the May contract are up $.06 at 15.76 trading above its 20 & 100 day moving average telling you that the trend is higher hitting a 4 week high and I’ve been recommending this trade buying the futures contract at today’s price while placing your stop loss below 15.20 risking around $1,000 per contract as every cent equals $20 profit or loss as the agricultural markets certainly have turned bullish so I would take advantage of the situation as it has excellent chart structure & make sure you place your stop loss minimizing your risk in case the trend reverses.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
What type of trading indicators do you Use? There are dozens of trading indicators which include short term and long term scenarios and too many to mention in this article but there have been some basic indicators that are been around for many years such as the basic moving average, stochastic , RSI, and Bollinger bands which have become more popular in recent years. However there are dozens more that people can use as well and it depends on your type of trading system if you are a short term day trader you then might use different indicators that a person who's holding positions overnight and doesn't need all the sort short term data. People also look at volume and open interest which I think is important especially open interest showing you how many people are trading that specific commodity. There are many overbought indicators such as RSI and stochastic which are overbought/oversold indicators if things have had 10 or 12 straight up days there could be overbought conditions and the price might tend to decline or vice versa on the downside if you had many down days a row it could be in an oversold condition causing the prices to move higher. In my opinion in the last 20 years there have been so many new indicators that it's impossible to possibly follow 50 or 75 at once so my advice is to come up with a trading system that use indicators that you are familiar with and paper trade.
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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