Natural gas futures in the June contract finished down 10 points this week to close around 4.65 as I’m recommending a long position in this contract placing my stop loss below the 10 day low which stands at 4.50 risking around 15 points or $1,500 per contract as the trend is still higher in my opinion as the risk reward situation is highly in your favor as we enter the demand season of summer. Natural gas prices have been in a bull market for quite some time and if you read some of my previous blogs several months back when prices were in the low $3 I was recommending if you have deep pockets and a longer term horizon to buy natural gas as prices were extremely cheap due to the fact of large supplies, however we had an extremely cold winter which reduced supplies dramatically and I do think natural gas prices will be sharply higher from today’s level in the next year as prices have bottomed out in my opinion. As a trader I focus on today and tomorrow only so when I can buy a natural gas contract and risk 1,500 I will take that trade even if I don’t believe the trade. Natural gas prices are trading above their 20 and 100 day moving average telling you that the trend is higher after we consolidated in the month March after the big run up in early winter as prices seem to be resuming back up to the upside so play this market to the upside using my stop loss and proper risk management.
CHART STRUCTURE: OUTSTANDING
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Gold futures in the June contract settled higher for the 2nd consecutive trading session cracking $1,300 an ounce after hitting new recent lows yesterday before the Ukrainian situation was stirred up once again this could be a problem for months to come as gold is held major support 1,280 currently I’m not recommending a position in this market as the trends choppy but keep an eye on this chart and wait for better chart structure to develop. Gold futures are trading above their 20 and 100 day moving average telling you that the trend is higher despite the fact that we are right near recent lows as the market remains choppy but with the stock market rallying recently investors sought no reasonable gold but the money flow came back into this market as political tensions are heating up. If your bullish the gold market my recommendation would be to buy a futures contract at today’s price of 1,300 while placing your stop below yesterday’s low of 1,264 risking around $3600 but the true breakout will not occur until prices break the April 14th high of 1331.
CHART STRUCTURE: POOR
Coffee futures in the July contract are ending the week on a sour note finishing down around 500 points to close around 209.70 while still trading above its 20 and 100 day moving average hitting new contract highs earlier in the week settling down about 500 points for the trading week in New York. I’ve been recommending a long position in coffee however the chart structure is very poor at this time and this trade is only for people with deep pockets and large trading accounts as its extremely volatile with high risk but I do believe that prices are headed higher and on any further weakness I would take advantage and get long the futures or a bull call option spread as the crop in central Brazil was absolutely devastated and I’m still hearing reports from some of my contacts down in Brazil that higher prices are coming as we will see an estimate on how many bags will actually be produced in the coming weeks and they are telling me that production is much lower than what currently is anticipated so only time will tell but I do believe prices are headed higher.
CHART STRUCTURE: TERRIBLE
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