So let's get ready for this weeks trading with 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.
Crude oil futures settled last Friday in New York at 47.66 a barrel while currently trading at 45.55 down about $2 for the trading week, but still trading under their 20 and 100 day moving average as prices are looking to retest the May 5th low of 44.13 in my opinion. The longer term and short term trend is to the downside as large supplies continue to keep a lid on prices. Gasoline and heating oil also continue to move lower, and my only recommendation in the energy sector is short the natural gas market at this time. The chart structure in oil is poor as the 10 day high is around $52 which is over $6 away. I'm currently waiting for the monetary risk to be lowered and I am looking at a short position possibly in next week's trade. There are concerns about gasoline demand which has also pushed oil lower over the last several weeks, but this market has been very choppy in 2017 as the volatility in the commodity markets are starting to rise once again as the summer months are upon us and historically speaking this is when you see large price swings up or down.
Trend: Lower
Chart Structure: Poor
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Natural gas futures settled last Friday in New York at 2.99 while currently trading at 3.04 up 5 points in an extremely low volatile trading week. I've been recommending a short position from the 3.17 level, and if you took the trade place the stop loss in Monday's trade at 3.26. Tuesday it will be lowered to 3.17 as the chart structure is becoming outstanding. For the bearish momentum to continue prices have to break the February 28th low of 2.88 which is still quite a distance away so stay short and continue to place the proper stop loss as the trend is still lower in my opinion. Prices are still underneath their 20 and 100 day moving average looking for some fresh fundamental moves to put some volatility back into this market. The energy sector, in general, continues its bearish momentum this week as oversupply issues continue to hamper this market as production levels in natural gas are increasing in 2017 and 2018. Higher temperatures in the Midwestern part of the United States are expected this weekend and that has helped prop up prices here in the short term, but the 7/10 day forecast still has average temperatures, so let's see what develops next week. I'm still looking at adding more contracts to the downside.
Trend: Lower
Chart Structure: Solid - Improving
Silver futures in the July contract settled last Friday at 17.52 an ounce while currently trading at 17.28 trading lower for the 3rd consecutive trading session after topping out at 6 week highs earlier in the week around 17.74. I'm currently sitting on the sidelines as this market remains choppy in my opinion. Silver prices are trading right at their 20 day but still below their 100 day moving average as the U.S dollar has rallied somewhat over the last couple days putting pressure on gold and silver prices. The chart structure is poor therefore the monetary risk is too high for me to enter into this market at this time. The next major level of support is right at the 17 level, and for this market to continue its bullish momentum, we would have to break 17.75. Volatility has come upon us once again which is excellent to see in my opinion. Many of the commodity markets remain mixed as they are not trading in unison and that's what I'd like to see occur once again like we experienced in years past.
Trend: Mixed
Chart Structure: Poor - Improving
Coffee futures in the July contract is currently trading at 128.25 a pound after settling last Friday in New York at 125.25 up about 300 points for the trading week. I'm currently not involved in this market. However, I will not initiate a short position as I think coffee prices are cheap and I'm looking at a bullish position once a true breakout occurs. Coffee futures are still trading under their 20 day and 100 day moving average which stands at 139 which is quite a distance away. However, the chart structure is rather solid at the present time, and the volatility is really low as prices have been grinding lower. At the present time, we are in the frost season in the country of Brazil which is the largest producer in the world as colder temperatures are expected this weekend, but no frost as the agricultural markets are starting to stabilize despite the fact of the Brazilian Real remaining very weak against the U.S dollar. If you take a look at the daily chart, there is major support around the 125 level which was hit in the last 5 trading sessions and unable to break. I do believe we are finding support as prices are bottoming out in my opinion.
Trend: Lower
Chart Structure: Solid - Improving
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