Saturday, April 15, 2017
Mike Seery's Weekly Futures Recap - Silver, Copper, Coffee, Sugar and More
So no better time than right now to get the a heads up from our trading partner 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.
Silver futures in the May contract are up 27 cents at 18.55 an ounce trading higher for the 3rd consecutive trading session breaking major resistance as I will be recommending a bullish position if prices close above 18.50 while then placing the stop loss under the 10-day low which was also Monday's low around 17.73 risking around $800 per mini contract plus slippage and commission. The chart structure is relatively solid at present as the next major level of resistance is last November's high around $19 an ounce as gold and silver prices have broken out to the upside. The 10 year note is significantly higher once again hitting a 6 month high as interest rates have been heading lower in recent weeks, and that is bullish the precious metals and commodities in general as there seems to be what they call a flight to quality which affects the bond and precious metals market as investors park their money as a so called safe haven. Silver prices are trading above their 20 and 100 day moving average telling you that the short term trend is higher so let's look at playing this to the upside as the risk/reward are in your favor in my opinion.
Chart Structure: Solid
Get Chris Vermeulen's Short & Long Term Gold Projections
Copper futures in the May contract are higher by 250 points this Thursday in New York currently trading at 2.5700 a pound after hitting a 3 month low in yesterday's trade as I'm looking at a short position, however the chart structure is poor as the 10 day high stands around 2.71 as the risk/reward is not in your favor at present. However, I am certainly not recommending any type of bullish trade as the trend clearly is to the downside. I will wait for the chart structure to improve which could take a couple more days as prices are now trading under their 20 and 100 day moving average telling you that the trend has turned negative in the short term with the next major level of support down to 2.50 which was tested back in December 2016 on multiple occasions only to rally every single time. This is a unique situation in the precious metals as bullish trends continue in gold and silver, however we have a bearish trend in copper and that can happen at certain times due to the fact that gold and silver are used as a flight to quality where copper is an industrial metal so keep a close eye on this market for a short position.
Chart Structure: Poor
Coffee futures in the July contract are trading higher by 100 points at 141.25 in the July contract up in a slow manner with low volatility over the last several months as it looks to me that coffee prices are bottoming out in the short term. I have written about coffee many times in the past as I'm currently not involved in this market and haven't been for several months as I think prices are limited to the downside as it looks to me that the 138 level has held as prices are now at a 3 week high. Coffee prices are now trading above their 20 day but still below their 100 day moving average which stands at 148 as that is the critical level for the bullish momentum to continue in my opinion so keep a close eye on this market to the upside. At present, I am recommending a short position in orange juice and in cotton and I am also bearish sugar. However, coffee prices are starting enter to enter the month of May with the chance of a frost occurring in Brazil, so there could be a price premium put into this market to the upside and if a frost does occur prices move substantially higher & extremely quickly like they did in 1994.
Chart Structure: Excellent
Sugar futures in the May contract settled last Friday in New York at 16.77 a pound while currently trading at 16.83 in a lackluster holiday trading week as tomorrow is Good Friday as the markets will be closed. I have not been involved in the sugar market, but I have remained bearish over quite some time. I have clients that are short and if you are in this market to the downside place your stop loss above the 10 day high standing at 17.18 which is just an eyelash away as prices actually traded as high as 17.16 earlier in the trading session. Many of the commodity markets have reacted to the positive side over the last several days due to the fact that bond interest rates in the United States have been going lower and that is supporting prices, however if you're short, continue to place the proper stop and don't 2nd guess as I think that's the kiss of death over the course of time. Sugar futures are still trading under their 20 and 100 day moving average telling you the trend is lower, but for this market to resume its bearish trend the 16 level has to be breached in my opinion.
Chart Structure: Excellent
For more calls on this week's commodity trades like Soybean, Wheat, Lean Hogs, Cotton and more....Just Click Here!