Weekly Futures Recap With Mike Seery - Crude Oil, Natural Gas, Gold, Silver and More


The Dow, SP500 and Nasdaq all closed higher on Friday yet again setting new record highs which is especially bullish in our opinion considering the long weekend is upon us. The financial stocks were the biggest gainers along with energy companies enjoying a rally in oil prices to a 3 year high. One of the few downers on this market was the sharp decline in Facebook shares.

So how do you trade markets when the upside targets are virtually impossible to predict?  As always that means it's time to ask our trading partner Michael Seery to give us a recap of this weeks [ending Friday January 12th] futures markets and give us some insight on where he sees the markets headed this week.

Crude oil futures in the February contract settled last Friday in New York at 61.44 a barrel while currently trading at 63.69 up over $2 for the trading week continuing its bullish momentum right near a three year high. If your long a futures contract I would continue to place the stop loss at the 10 day low which now stands at 60.10 as that will start to improve next week, therefore, lowering the monetary risk as the chart structure will start to turn outstanding. Strong demand for crude oil and the energy sector as a whole has continued to push prices higher as we continue to have a draw down on supplies on a weekly basis coupled with the fact that the U.S. Dollar has now hit a four month low which is supportive commodity markets and especially the energy sector.

The next major level of resistance is around the 65/66 level & if that is broken, I still think we could trade into the low 70s. I don't think this market has peaked just yet as there is more room to run especially as the U.S. stock market is hitting another all time high today. That will also increase demand for unleaded gasoline as economies around the world are improving. Oil prices are trade far above their 20 and 100 day moving average telling you that the trend is to the upside as traders await the next supply report which will be released later next week & should send some high volatility back into this market as volatility remains relatively low.
Trend: Higher
Chart Structure: Solid
Volatility: Low

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Natural gas futures in the February contract are trading higher for the 2nd consecutive session hitting a six week high after settling last Friday in New York at 2.79 while currently trading at 3.12 up about 32 points for the trading week all based on a cold weather forecast ahead. I have been recommending a bullish position from around the 2.78 level and if you took the trade place the stop loss which now has been raised to 2.74 and will remain at that level for another five trading sessions so you will have to accept the monetary risk. Natural gas prices are now trading above their 20, and 100 day moving average as the trend has turned positive as the volatility indeed has come to life as well, and that is expected especially in January and February. This market will move on weather forecasts as we sold off last week on the warm weather & now have rallied this week due to a polar vortex possibly entering the Midwestern part of the United States so stay long & place the proper stop loss as the next major level of resistance is 3.20. If that is broken, I think we could retest the contract highs around 3.50 in the coming weeks ahead.
Trend: Higher
Chart Structure: Solid
Volatility: High

Gold futures in the February contract settled last Friday in New York at 1,322 an ounce while currently trading at 1,333 up about $11 for the trading week right near a four month high. I'm currently not involved in any of the precious metals as they have rebounded sharply over the last month. The U.S. dollar has now hit a four month low in today's trade continuing its bearish trend which has supported gold and the precious metals recently, but the chart structure is poor coupled with the fact that we are in overbought territory. I will be patient & wait for a better chart pattern to develop before entering into a trade. Gold prices are trading above their 20 and 100-day moving average as the trend is higher as we now look to retest the September 8th high around 1,365 in my opinion. This market has rallied substantially from the recent low, that was hit on December 12th at 1,238 as we have now rallied nearly $100 in a blink of an eye despite the fact that U.S. stock market hits all time highs every day, but this rally is based on a weak U.S. Dollar. Gold is also riding the coattails of the energy market which is right at a three year high in crude oil as both of these are considered inflationary commodities as the U.S. economy and worldwide economies are improving significantly as that should bolster commodity prices across the board in 2018.
Trend: Higher
Chart Structure: Solid
Volatility: Increasing

Silver futures in the March contract is trading at 17.17 an ounce after settling last Friday in New York at 17.28 down slightly for the trading week still consolidating the recent run up in prices over the last couple of weeks as volatility remains surprisingly low. If you take a look at the daily chart, it's mirroring the gold chart to the upside as the U.S. Dollar is hitting a four month low in today's trade as that is supporting silver prices over the last month. Silver is trading above its 20, and 100 day moving average as the trend is to the upside, and I will be looking at a possible bullish position if prices breakout above major resistance at the 17.50 level. The risk/reward will start to become in your favor as the chart structure improves in next week's trade. As I've talked about in many previous blogs, I thought 2018 would be bullish for the commodity markets as so far only the energies and the precious metals have rallied, but the agricultural markets remain on the defensive as oversupply issues continue to keep a lid on those sectors. I do think prices will start to rally across the board eventually. If the U.S. Dollar continues its bearish trend and that's a real possibility that could push silver prices into the low $20 range as I'm looking at a bullish position possibly next week.
Trend: Higher
Chart Structure: Solid
Volatility: Low

For more calls on this week's commodity trades like the 10 Year Note, Corn, Coffee and more....Just Click Here!

Mike Seery has been a senior analyst for over 15 years and has extensive knowledge of all of the commodity and option markets.

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