Crude oil futures in the September contract settled last Friday in New York at 48.14 a barrel while currently trading at 47.90 down slightly for the trading week still trading below its 20 and 100 day moving average as I’ve been recommending a short position over the last several months and if you took that trade place your stop above the 10 day high which now stands at 51.41 as that will improve on a daily basis starting next week. Crude oil futures are trading below their 20 and 100 day moving average telling you that the trend is to the downside as there is very little bullish fundamental news to push prices higher in the short term and I think that will continue for quite some time as the U.S dollar still remains relatively strong despite today’s steep decline.
Many of the commodity markets continue to go lower as deflation is a worldwide problem and has been over the last several years especially when the United States stopped there quantitative easing program which propped up all asset prices including most commodities. With the possibility of China slowing down the perception is that demand will also slow down so continue to place the proper stop loss which is just a little over $3 away as this trade as fallen out of bed over the last two months, but if you have missed this recommendation sit on the sidelines and look for another market that’s beginning to trend as you have missed the boat.
Trend: Lower
Chart Structure: Excellent
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Gold futures in the December contract settled last Friday at 1,086 while currently trading at 1,194 experiencing a wild trading session this Friday afternoon with the U.S dollar trading sharply lower as I’ve been recommending a short position in the August contract as we rolled over into the December contract today so continue to place your stop loss above the 10 day high which stands at 1,110 an ounce. Gold futures have traded sideways for the last two weeks and looks to be forming some type of short term bottom, but I will stick to my trading rules and keep the proper stop loss as I still see no reason to own gold but if we are stopped out move on and look at other markets that are beginning to trend as we have been short from around the 1,170 level as prices have stalled out in recent weeks. The problem with the precious metals and gold in particular is the fact that all of the interest lies in the S&P 500 which is still hovering around all time highs as money flows continue to come out of the precious metals and into the equity markets as I think that trend is to continue throughout 2015 and at this point I would rather own stocks than own gold so continue to play this to the downside in my opinion while risking 2% of your account balance on any given trade.
Trend: Lower
Chart Structure: Outstanding
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Silver futures in the September contract settled last Friday at 14.49 an ounce while currently trading at 14.80 up about $.30 for the trading week still trading below their 20 & 100 day moving average as I’ve been short from 15.80 and if you took that trade place your stop loss at 14.99 which is the 10 day high as the chart structure is outstanding at the current time. Silver prices continue to bounce off of 14.50 as it looks to be forming a bottoming pattern but I will stick to my rules as we are just an eyelash away from getting stopped out as silver had a 40 cent trading range this Friday afternoon as the U.S dollar is down 100 points, however the trend is still lower and if we are stopped out move on and let’s find another market that’s beginning to trend as volatility is relatively low at the current time.
The Federal Reserve continues to want the inflation rate to hit 2% so they can start to raise interest rates but at this point there is very little worldwide demand for any commodity especially due to the fact that China looks to be falling off a cliff as they are the largest importer of commodities in the world and if you have not sold silver at this time the risk/reward is highly in your favor risking $.20 or $200 per mini contract plus slippage and commission as we will see what Monday’s trade brings.
Trend: Lower
Chart Structure: Outstanding
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Coffee futures settled higher for the 3rd consecutive trading session settling last Friday at 122.25 a pound while currently trading at 125.30 still trading below its 20 and 100 day moving average as I’ve been recommending a short position from the 128 level and if you took that trade place your stop loss above the 10 day high which currently stands at 128.20 as the chart structure is outstanding at the current time. The next major level of support is the contract low around 120 but I still think we can retest the January 2014 lows of 105 and if you did not take the original trade I would still sell at today’s price as the risk is around 300 points or 1,200 risk per contract plus slippage and commission. I am currently recommending short positions in cocoa, sugar, coffee as volatility is relatively low but as a trend follower I will stick to my guns on this and continue to place the proper stop loss while maintaining the proper risk management strategy of 2% of your account balance on any given trade.
Trend: Lower
Chart Structure: Outstanding
Sugar futures in the October contract settled last Friday in New York at 11.24 a pound while currently trading at 11.16 basically unchanged for the trading week as I’ve been recommending a short position from around 11.50 and if you took that recommendation the chart structure is outstanding at the current time so place your stop above the 10 day high at 11.72 risking around 50 points or $550 per contract plus slippage and commission. Sugar futures are trading far below their 20 and over 150 points below their 100 day moving average telling you that the trend is getting stronger to the downside as oversupply and over production should continue to put pressure on prices despite the fact that the U.S dollar is down over 100 points but that’s still not supporting sugar prices at this time. The reason I decided to take this trade was the fact of extremely tight chart structure which lowers monetary risk as that met my criteria to enter into a trade as I still think that there’s a possibility that prices could break 10.00 a pound in the next several weeks so continue to play this to the downside as the risk/reward is highly in your favor in my opinion.
Trend: Lower
Chart Structure: Excellent
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