Michael Seery. We've asked him to give our readers a recap of the this weeks futures markets and give us some insight on where he sees these markets headed. Mike has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Crude oil in the March contract settled last Friday in New York at 53.17 a barrel while currently trading at 53.60 up slightly for the trading week as prices have been stuck in a $2 range for the last 3 trading weeks as I've been sitting on the sidelines waiting for the trend to develop which I think might be to the upside. Oil prices are right at their 20 day but above their 100 day moving average as the chart structure is excellent at the current time as the United States released the monthly unemployment report which stated 227,000 new jobs were added which is a bullish indicator towards crude oil as there could be more demand with more people employed. The U.S dollar is still hovering around 100 which is still a longer term bearish fundamental indicator, but it seems to me that many of the commodities have already reflected that in their price so keep a close eye on this market to the upside as a 4 week high could be at hand next week. OPEC is hinting that they could possibly cut production once again in 2017 as it seems to me that they want prices back up into the $65/$75 level as that will take time, but I do think with growth coming back into the United States that is bullish stocks and commodities longer term.
Chart Structure: Excellent
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Natural gas futures in the March contract settled last Friday in New York at 3.35 while currently trading at 3.06 down about 30 points for the trading week as I have been sitting on the sidelines in this market as it has remained choppy over the last several months. If you take a look at the daily chart there is a price gap which occurred on November 18th between 3.02/3.06 and I do think that will be filled with the possibility of retesting the contract low around 2.80, but at that level, you have to start thinking prices are getting cheap. Warmer weather in the Midwestern part of the United States is the main culprit for lower prices as the city of Chicago did not receive any snow in the month of January which is remarkable in my opinion coupled with above average temperatures, therefore, increasing supplies. Natural gas prices are still trading below their 20 and 100 day moving average telling you that the short-term trend is lower. However, I'm advising clients to avoid this market at present and look at other markets that are beginning to trend with a better risk/reward scenario.
Chart Structure: Improving
Gold futures in the April contract settled last Friday in New York at 1,191 an ounce while currently trading at 1,213 up over $20 for the trading week right near a 10 week high as I've been sitting on the sidelines in this commodity recommending bullish positions in silver and copper. Gold prices are still trading above their 20 day but below their 100 day moving average as the trend is mixed to higher in my opinion as the U.S dollar is still hovering right around the 100 level as I'm also recommending a short position in that currency at present. The monthly unemployment number was released this morning adding about 227,000 new jobs having very little impact on gold prices in today's trade. The next major level of resistance is yesterday's high around 1,227 and if that is broken, I think we could go back to around the 1,300 level right where we were before the Trump election as there is still room to run to the upside. I want to wait for better chart structure as the 10 day low is too far away at present coupled with the fact that I am already recommending two other precious metals as they all follow one another up or down, so you don't want to be too top-heavy.
Chart Structure: Improving
Silver futures in the March contract settled last Friday in New York at 17.14 an ounce while currently trading at 17.50 up about $0.35 for the trading week as I have been recommending a bullish position originally from around 16.76 and now have added on 2 separate occasions as I remain bullish the precious metals and especially silver prices. If you took the original trade continue to place your stop loss under the 10 day low which stands at 16.63 as the chart structure is not very solid at present due to the run up in prices, however, it will improve but it will take 4 more trading sessions. Silver prices are now trading above their 20 and 100 day moving average telling you that the short term trend is higher as I'm also recommending a bullish position in copper which is down 500 points today & has been stuck in the mud over the last 3 weeks. At the current time I'm also recommending a bearish U.S dollar position and if that trade works out, you would have to think that would benefit silver prices as I still think historically speaking silver is very cheap and still has exceptional demand.
Chart Structure: Improving - Poor
The U.S dollar in the March contract settled last Friday at 100.52 while currently trading at 99.85 down about 75 points for the trading week as I am now recommending a bearish position from around 99.85 & if you took that trade continue to place your stop loss above the 10 day high which stands at 101.01 risking around $1,200 per contract plus slippage and commission. The chart structure will not improve for another 6 days, so you're going to have to accept the monetary risk as prices are still trading below their 20 day but right at their 100 day moving average right near major support in my opinion. The United States released its monthly unemployment number adding 227,000 new jobs having very little impact on the currency market this afternoon as prices are still right near a 6 week low, so I will continue to place the proper stop loss while risking 2% of the account balance on any given trade. Volatility in the dollar is relatively high as we are having large price swings on a daily basis so make sure place the proper amount of contracts, therefore, managing risk properly.
Trend: Lower - Mixed
Chart Structure: Excellent
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