728x90 AdSpace

Latest News
June 8, 2015

Futures Market Recap Week Ending June 5

INO.com  

Crude Oil Futures


Crude oil futures in the July contract are currently trading at 58.50 after settling last Friday in New York at 60.30 as I’ve been recommending a bearish position when prices broke the $58 dollar level and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 61.60 risking $3 or $1,500 per mini contract plus slippage and commission. Crude oil futures are trading below their 20 day moving average as prices have remained very choppy in recent weeks as the chart structure will not improve until later next week so you will have to be patient and stick to the rules. OPEC announced today that they will not cut production but that was basically factored into the price as oil has dropped $3 dollars from Monday’s close with the next major support at 56.50 which I think will be penetrated in the next week’s trade so remain short in my opinion. The U.S dollar is up 100 points this afternoon as yields on the U.S treasuries are also hitting multi-month highs which are pessimistic commodity prices despite the fact that the U.S unemployment was positive showings an improving economy which is generally supportive energy products but I believe prices have topped out.

TREND: LOWER

CHART STRUCTURE: POOR

Gold Futures

Gold futures in the August contract finished lower for the 3rd consecutive trading session in New York currently at 1,168 an ounce as I’m now recommending a short position while placing your stop loss above Monday’s spike top at 1,205 risking around $35 or $1,200 per mini contract plus slippage and commission as the chart structure will start to improve later next week. Gold futures are trading below their 20 and 100 day moving average and as I’ve talked about in yesterday’s blog I wanted investors to keep a close eye on the 1,170 level as I think that the bear market is underway once again as gold has very little bullish fundamental reasons to move higher as the U.S dollar remains in a secular bull market coupled with the fact that U.S treasuries continue to move higher as the 10 year note now is approaching 2.4% which is negative all commodity prices as a whole. The U.S stock market reacted somewhat negatively to the U.S monthly employment number which added 280,000 jobs which was a strong number, however investors are sensing an increase in bond yields and that’s spooking the market and is definitely taking money out of the precious metals at the current time. The last breakout to the upside was around 1,230 as I was not recommending any trade as the chart structure was poor but now I am recommending a short position in this market so take advantage of price rally while maintaining the proper risk management.

TREND: LOWER

CHART STRUCTURE: SOLID

Soybean Oil Futures

Soybean oil futures in the July contract settled at 33.33 last Friday while currently trading around 34.78 up around 150 points for the trading week as I’m sitting on the sidelines in this market as the chart structure is awful at the current time due to the fact that prices have rallied around 300 points in the last week due to the fact that the EPA has mandated higher biodiesel levels and a frost in Canada causing canola oil damage having to replant around 10% of the crop pushing prices sharply higher in the last week but the risk is too high at the current time but I’m certainly not recommending any type of short position as the trend is to the upside. Large managed funds are short the entire grain market except soybean oil as they trade with the trend and the trend is higher as I’m still currently recommending a short position in corn and soybeans but soybean oil has caught fire in recent days hitting a 7 month high and now trading far above its 20 &100 day moving average telling you that the trend is to the upside so wait for better chart structure to develop therefore lowering monetary risk in my opinion as the grain market looks like its bottomed in the short-term due to weather concerns as volatility will increase on a daily basis as traders await 2 major crop reports next week.

TREND: HIGHER

CHART STRUCTURE:TERRIBLE

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

Sugar Futures

Sugar futures in the July contract are currently trading at 12.01 a pound basically unchanged for the trading week still trading below their 20 and 100 day moving average as I was sitting on the sidelines when the breakout occurred around the 12.40 level as the chart structure was very poor, however at the current time I think prices are headed lower so I’m recommending selling a futures contract while placing the stop loss at the 10 day high of 12.50 risking 50 points or $550 per contract plus slippage and commission. Volatility in sugar has been relatively low in recent days and that’s why the chart structure has improved which lowers monetary risk because you’re placing a tighter stop loss as the next major support is around the 11.90 level and if that’s broken the bear market is underway in my opinion. The U.S dollar remains strong against the foreign currencies which is keeping a lid on many commodities prices plus the fact that U.S treasury yields are starting to climb higher which is also negative towards commodity prices as the risk/reward is your favor in my opinion.

TREND: LOWER

CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in July contract are trading below their 20 but barely above their 100 day moving average telling you that the trend is mixed as I’ve been sitting on the sidelines in this market for the last several months as the chart pattern is extremely choppy after settling last Friday in New York at 64.35 while currently trading at 64.10 slightly lower the trading week. If you take a look at the daily chart there is a possible head and shoulders top being created, however as a technical trader this market currently has no trend as the fundamentals are starting to become more bullish as there are less acres planted in the United States this year while China is also a planting less trying to lower some of their inventory as they hold around 50% of the world supplies but this market remains choppy so look at other markets that are starting to trend. The weather has been poor in many parts of the southern United States with Oklahoma and Texas receiving heavy rains causing massive flooding which should lower planting in many parts which then could be switched to soybeans as we enter the extremely volatile summer season.

TREND: MIXED

CHART STRUCTURE: TERRIBLE - AVOID

Coffee Futures

Coffee futures in the July contract are trading above their 20 day but still below their 100 day moving average telling you that the trend is mixed as I’ve been sitting on the sidelines as the chart structure was very poor when the breakout occurred to the downside after settling last Friday in New York at 126.15 currently trading at 135.00 a pound trading higher 4 out of the last 5 trading sessions. The reason I did not take a short position was because the chart structure was very poor as the monetary risk was too high to enter into the trade as I like to risk 2% of your account balance on any given trade so sit on the sidelines and look at other markets that are beginning to trend as prices will continue to go sideways in my opinion. I still think that there’s a possibility that prices can retest the 2013 lows around 105 but at the current time I’m neutral this market as large production out of Brazil has kept a lid on prices this year. The Brazilian Real is still historically very weak against the U.S dollar and that’s very bearish anything that’s grown in Brazil as I still think the U.S dollar will continue its bullish momentum for the rest of 2015.

TREND: MIXED

CHART STRUCTURE: POOR - AVOID

Corn Futures

Corn futures in the December contract settled last Friday in Chicago at 3.68 right near contract lows and then rallied 4 out of the last 5 trading sessions and traded as high as 3.84 ½ earlier in the trading session settling at 3.78 blamed on profit taking as I’m still short this market and if you took this trade over six weeks ago continue to place your stop loss above the double top & the 10 day high at 3.85 a bushel. Corn prices have rallied in recent days due to the fact of unusually wet and cold weather throughout many parts of the Midwestern part of the United States, however temperatures are starting to rise as 96% of the corn crop was planted as of last Monday as traders await Monday’s planting report and then on Wednesday the USDA crop report will be released sending high volatility into this market as the summer volatility season has begun. There are estimated 3 million acres that are not planted but this Monday’s report will give us more light on that situation as that’s pushed up prices as I wonder where those acres would be shifted to as grain market rallied this week especially wheat prices but remain short as the risk/reward is in your favor in my opinion.

TREND: LOWER

CHART STRUCTURE: OUTSTANDING

Lean Hog Futures

Lean hog futures in the December contract settled last Friday in Chicago at 69.22 while currently trading at 66.95 as I’ve been recommending a short position from just below the 69 level and if you took that trade place your stop loss above the 10 day high which currently stands at 70.30 risking around 330 points or $1,350 plus slippage and commission from today’s price levels. Hog prices hit 8 weeks lows in today’s trade as the reason I recommended this trade was because of excellent chart structure as prices look to have topped out around the 70 level as prices are trading below their 20 and 100 day moving average telling you that the trend is to the downside and if you did not take the original recommendation I would sell on any type of price rally as the chart structure will start to improve later next week. Many of the commodity markets have turned negative once again as the U.S dollar & U.S treasury yields are higher spooking the commodity markets to the downside as prices are still expensive in my opinion as I think oversupply problems will continue to hamper this market throughout 2015 so continue to place your stop loss at the 10 day high and manage risk correctly.

TREND: LOWER

CHART STRUCTURE: EXCELLENT

Wheat Futures

Wheat futures in the July contract exploded this week in Chicago settling last Friday at 4.77 while currently trading at 5.30 a bushel up 53 cents for the trading week as concerns about pockets of dryness in Russia are sending prices to an 8 week high. At the current time I’m not recommending any position in this market as the chart structure is terrible as the 10 day low is over $.50 away but I’m certainly not recommending any type of short position either so sit on the sidelines and wait for a tighten chart pattern to develop. Wheat prices are trading above their 20 and 100 day moving average telling you that the short-term trend is to the upside as prices are bumping up against major resistance which was hit two months ago around 5.43 and if that level is broken a bull market is underway in my opinion. If you have followed any of my previous blogs you understand that I always look for chart structure to be solid with the maximum risk of 2% on any given trade and at this time that does not meet any of my criteria so be patient and can keep an eye on this market as volatility certainly has exploded in recent weeks and should continue throughout the summer months as corn prices have rallied $.20 this week riding the coattails of the wheat market.

TREND: HIGHER

CHART STRUCTURE: POOR

Trading Theory

This rule is extremely important and I witness it being abused constantly creating tremendous loses that are sometimes difficult to come back from. Never add to a losing position because if the position continues to go against you and now you have added even more contracts which are all losing money your account will suffer loses much more than 2% and in some case adding positions and never getting out of a losing trade has wiped peoples trading accounts down to zero because of 1 or 2 bad trades. Remember always play for another day you will have losing trades and the good traders manage losses and move on to the next possible trade.

Courtesy Michael Seery at www.seeryfutures.com via INO.com  


The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters. © EconMatters All Rights Reserved | Facebook | Twitter | Free Email | Kindle
  • Blogger Comments
  • Facebook Comments
Item Reviewed: Futures Market Recap Week Ending June 5 Rating: 5 Reviewed By: EconMatters