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Weekly Futures Recap With Mike Seery - Gold, Silver, Copper, SP500 and More

The three major indexes all closed higher on Friday yet again including the NASDAQ 100 closing into record territory. Investors are looking to the earnings season, which will pick up steam over the coming weeks, to provide clarity on whether corporate fundamentals are strong enough to offset the uncertainty surrounding trade policy and other potential headwinds.

What will this mean for energy and commodity traders? Let's see what our trading partner Michael Seery is saying as he gives us a recap of this week's [ending Friday July13th, 2018] commodities futures markets and give us some insight on where he sees the markets headed in the coming week.

Gold futures in the August contract is currently trading at 1,242 an ounce after settling last Friday in New York at 1,255 down about $13 for the trading week hitting a fresh contract low as I remain bearish gold and as I have talked about in many previous blogs I think we're headed towards the 1,200 area relatively soon. The precious metals across the board continue their bearish momentum on a daily, and weekly basis as the U.S dollar remains strong, and the U.S equity market also is in a significant bullish trend as the NASDAQ 100, and the Russell 2000 hit all time highs in yesterday's trade.

Money flows continue to come out of the precious metal sector and into the equity market, and I don't see that ending anytime soon. I see no reason to own gold at this time and if you are short, stay short and place the stop loss above the 10 day high standing at 1,267 as the chart structure will also improve in next week's trade, therefore, the risk will also be lowered. Gold prices are trading far under their 20 and 100 day moving average as the trend is to the downside as volatility is average at the current time, but investors presently don't want to own anything except for stocks and possibly the crude oil market.

I'm not recommending any bullish position in gold as a bottoming pattern has not been formed yet in my opinion as prices still look expensive.
Trend: Lower
Chart Structure: Improving
Volatility: Solid

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Silver futures in the September contract settled last Friday in New York at 16.06 an ounce while currently trading at 15.78 down nearly $0.30 for the week hitting a fresh contract low as the entire precious metal sector is right near yearly lows as well as I still think lower prices are ahead. The next major level of support is around 15.55 which was hit on December 11th, 2017 & if that level is broken, I think we could test the July 10th 2017 low of 15.15 as the longer term downtrend line remains intact as this market remains very bearish in my opinion.

The U.S. dollar remains strong up another 35 points this Friday afternoon putting pressure on silver prices. However, the problem is the Trump tariff situation as investors are taking a risk off approach and until some clarity comes about the entire commodity sectors except for oil could continue to go lower on a daily and weekly basis as I don't see that ending anytime soon. Silver prices are trading far under their 20 and 100 day moving average as clearly this trend is to the downside as I'm certainly not recommending any bullish position.

Volatility in silver has started to increase, but all of the interest still lies in the U.S equity market which is higher once again today as the Nasdaq 100 is hitting another all-time high as weak demand and a lack of risk taking at this time continue to put pressure on silver prices.
Trend: Lower
Chart Structure: Poor
Volatility: Solid

Copper futures in the September contract settled last Friday in New York at 2.8240 a pound while currently trading at 2.7700 down over 500 points for the trading week hitting a fresh contract low as this market remains extremely bearish in my opinion as I still think lower prices are ahead. Copper prices are trading far below their 20 and 100 day moving average looking to retest the July 11th low of 2.7170 in my opinion as weak demand and the Trump tariffs are a terrible situation for this commodity as I don't think the selloff is complete just yet.

Prices have entirely fallen out of bed as they topped out on June 7th at 3.3345 and have now dropped about 6000 points in a little over a month. I still think we're headed down to the 2.50 level in the coming weeks ahead and if you are short, my recommendation is to stay short as I am not recommending any bullish position.

The commodity markets, in general, remain weak across the board as I don't think the trend is quite over with yet. However, we're getting close in my opinion, but I still think there's one more leg down as the precious metals are probably the most bearish sector at this time as the volatility is relatively high and should stay high for the rest of 2018.
Trend: Lower
Chart Structure: Poor
Volatility: High

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The S&P 500 in the September contract is trading higher for the 2nd consecutive trading session up 5 points at 2803 breaking the critical 2800 level hitting a four month high as this is the strongest market at the current time. I'm recommending a bullish position from today's price level while placing the stop loss under the 10 day low standing at 2700 as the risk is around $5,100 per contract plus slippage & commission at this trade should only be taken with a large trading account as the risk is high.

The chart structure will start to improve in next week's trade, therefore, the risk will be lowered as the NASDAQ 100 and the Russell 2000 are at all time highs once again today as I think the S&P will catch up as its all time high was touched on January 29th at 2889 as there is more room to run to the upside in my opinion. This is probably the only market that has not been affected by the Trump tariffs as the commodity markets have been utterly decimated, however strong earnings and sizeable corporate stock buybacks continue to support prices in the short term as the fundamental and technical picture remains very strong in my opinion.

The S&P 500 is trading above its 20 and 100 day moving average telling you the trend is to the upside as we are in the midst of earnings season and volatility should start to increase as it remains relatively low. So, play this to the upside and if the risk is too high wait for some price retracement before entering into a bullish position.
Trend: Higher
Chart Structure: Poor-Improving
Volatility: Low

For more calls on this week's commodity trades like the Corn, Soybean, 10 Year Notes, Wheat 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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