Mike Seery is back this week to give our readers a weekly recap of the futures market. He has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Crude oil futures in the August contract settled last Friday at 52.74 a barrel while currently trading at 50.78 down about $2 for the trading week hitting a four month low while still trading far below its 20 and 100 day moving average telling you that the trend is to the downside as I’ve been recommending a short position for six weeks and if you took that trade the 10 day stop has been lowered to 53.90 as the chart structure has improved tremendously.
Oil prices retreated this week due to the fact that of the Iranian deal which should put more oil onto the market down the road as 49 is major support and if that is broken you could have sharply lower prices ahead as oversupply issues still remain as the commodity markets still look weak due to the fact of a very strong U.S dollar which hit a six week high in this week’s trade.
The precious metals continue to make new lows as well as generally speaking metal prices and energy prices go hand in hand in the same direction and that direction is to the downside so continue to place the proper stop loss as this has been an outstanding trade over the course of time as are patience were tested but the path of least resistance is the successful way to trade in my opinion.
Chart Structure: Excellent
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Gold futures in the August contract settled last Friday in New York at 1,158 an ounce while currently trading at 1,137 down about $20 for the week hitting a five year low as I’ve been recommending a short position when prices broke 1,170 and if you took the original recommendation place your stop loss at the 10 day high which was lowered to 1,170 as the chart structure will start to improve on a daily basis.
Gold prices are trading far below their 20 and 100 day moving average as prices look to head lower as I’ve talked about in many previous blogs I see absolutely no reason to own the precious metals at the current time as deflation is a worldwide problem as the U.S dollar hit a six week high in this week’s trade.
Crude oil prices are also continuing their bearish trend which is also pressuring the precious metals and silver is also right near recent lows so continue to play by the rules while taking advantage of any rallies as I would like to add to this trade as I think we will break 1,100 possibly in the next couple of weeks as the trend is getting stronger on a weekly basis as the risk/reward still meets criteria.
The stock market is hitting all time highs once again today as I talked about many times all the interest lays in the equity market and not the precious metals as money flows continue to come out of the metals & into equities as that should continue in 2015 so remain short.
Chart Structure: Excellent
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Silver futures in the September contract continued their bearish momentum settling last Friday in New York at 15.48 an ounce while currently trading at 14.80 down about $.70 for the trading week as I’ve been recommending a short position from 15.80 and if you took that trade place your stop loss above the 10 day high which currently stands at 15.90 as the chart structure will not improve for several more trading days as silver prices have hit a five year low.
Silver futures are trading far below their 20 and 100 day moving average with a possible retest of last week’s low around 14.62 in the cards and if that level is broken I think there could be a washout to the downside as there’s no reason to own the precious metals at the current time as the U.S dollar hit a six week high.
Platinum prices have cracked $1,000 which has not happened in over five years as the dollar continues to put pressure on gold and silver prices here in the short term as deflation is a worldwide problem not inflation so continue to take advantage of any rallies will placing the proper stop loss as I think lower prices are still ahead despite this weeks 70 cent decline.
Chart Structure: Improving
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Coffee futures in the September contract settled last Friday in New York at 126.25 a pound while currently trading at 128.30 as I’ve been recommending a short position from around this level as the chart structure is outstanding at the current time as the 10 day high stands at 132.50 risking around 400 points or $1,600 from today’s price levels plus slippage and commission.
Coffee prices continue to move lower on a weekly basis as the downtrend line remains intact, however if you have not taken this recommendation I am still promoting a sell order at today’s levels as the risk/reward is highly in your favor as coffee is an extremely large contract as I do think the retest of the contract low around 125 could be in the cards next week.
The problem with coffee prices and many of the agricultural markets is that we have too much supply coupled with the fact of an extremely weak Brazilian Real versus the U.S dollar which is pressuring anything that’s grown in the country of Brazil so take a shot at the downside as the risk and the chart structure both meet my criteria to enter into a trade, however if we are stopped out which there is that possibility since the stop is so close look at other markets that are trending and don’t be stubborn.
Chart Structure: Outstanding
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Sugar futures in the October contract settled last Friday in New York at 12.41 a pound while trading at 11.98 down around 40 points for the trading week as I’ve been sitting on the sidelines in this market as the trend remains choppy as prices are trading lower for the 3rd consecutive down day still trading below its 20 and 100 day moving average, as the down trend line is still intact but I’m waiting for a breakout to occur which would be the contract low of 11.52 to the downside.
Many of the commodity markets have been going lower including crude oil which is also putting pressure on sugar prices as sugar is used as a biodiesel but the real problem is the U.S dollar which continues to move higher as I’m not bullish any commodity at this time as oversupply issues and deflation worldwide continues to put pressure on prices.
Sometimes the best thing to do is not trade and avoid markets at certain times and that’s what I’m stressing right now as choppiness is difficult and frustrating as there are many other markets that are trending significantly to the downside such as gold, silver, hogs, and several others.
Chart Structure: Solid
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