Silver Futures
Silver futures in the September contract settled last Friday in New York at 19.05 an ounce while currently trading at 19.75 up $0.70 for the trading week as prices have now hit a 10-month high. The US dollar is lower by 35 points today, breaking the 96 level as that is a fundamental bullish factor towards the precious metals, including silver, as I think prices will break the $20 level come next week.
I have been recommending a bullish position over the last month from around the 18.61 level. If you took that trade continue to place the stop loss under the 10-day low standing at 18.23, however, in next week’s trade, the stop loss will be tightened significantly, therefore lowering the monetary risk.
Silver prices are trading far above their 20 and 100-day moving average as the trend is strong to the upside as gold prices are right at a 9-year high. I also have a bullish recommendation in platinum, as the entire sector is in the midst of a solid trend to the upside. If prices crack the $20 level, look for the volatility to expand tremendously as the price swings will have a large percentage move daily. I still think we can head up to the $25/$30 level.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH
Natural Gas Futures
Natural gas futures in the September contract settled last Friday in New York at 1.85 while currently trading at 1.78 down slightly for the trading week as prices are still near a multi-decade low. Prices topped out recently on June 7th around the 1.99 level while bottoming out on June 26th at 1.58 basically right in the middle part of that range looking for a fresh trend to the upside to develop, in my opinion.
If you have been following my previous blogs, you understand that all of my recommendations are on the bullish side. I think the commodity markets look cheap as I will not take a short position on this commodity, but that doesn’t mean it can’t go lower as I’m advising clients to sit on the sidelines.
Gas prices are trading right at their 20-day but still below their 100-day moving average as the trend is lower to mixed as milder temperatures have entered the Midwestern part of the United States is putting pressure on prices in the short-term. The recent surge in new US COVID-19 cases may force states to reimpose lockdowns that would curtail economic growth and energy demand. On Thursday, Florida reported a record of 156 COVID-19 deaths, and Texas, on Wednesday, reported a record 110 COVID-19 deaths. The Nasdaq-100 is right near all-time highs as the equity markets have had a substantial rally from the March low as that is telling you that the economy looks to improve in the next 6 months as that would also be a fundamental bullish factor towards gas prices.
TREND: LOWER – MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING
S&P 500 Futures
The S&P 500 in the September contract settled last Friday in Chicago at 3178 while currently trading at 3215 up about 37 points for the trading week, continuing its bullish momentum. I’m not involved, however, if you have been following my previous blogs, you understand that I do believe that the entire US equity market will continue to move higher for the rest of 2020 as the Nasdaq-100 continues to hit all-time highs weekly.
Currently, there are few investment options out there for investors as they include stocks and precious metals as both sectors continue to move higher as I think that will continue for months to come as these have become demand markets. In my opinion, I believe prices will return to the all-time high hit on February 20th at 3,396 in the coming days ahead as earnings season is upon us as that will dictate short-term price action. The S&P 500 is trading above its 20 and 100-day moving average as the trend is to the upside as prices are right at a 5 month high, and if you are long, stay long, in my opinion, as I see no reason to be short.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH
Platinum Futures
Platinum futures in the October contract is currently trading up $13 at 850 an ounce after settling last Friday in New York at 845 up slightly for the trading week. I have been recommending a bullish position over the last couple of weeks from around the 868 level. If you took that trade to continue to place the stop loss at 799 as an exit strategy as the volatility should remain high, I don’t think that situation will end anytime soon.
The US dollar hit a fresh contract low today, a fundamental bullish factor for higher prices coupled with the fact that economies around the world look to be strengthening come year-end, which has a positive demand factor towards platinum.
The next major level of resistance stands around the 900 area, which is still quite a distance away as this is the weakest precious metal at the current time as the leader in the complex remains gold. The trend remains to the upside as prices are trading above their 20 and 100-day moving average, and if you take a look at the daily chart, it looks like a bottoming out pattern has been formed around the 800 level.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
Soybean Futures
Soybean futures in the November contract, which is considered the new crop and is currently being grown in the Midwestern part of the United States settled last Friday in Chicago at 8.91 a bushel while currently trading at 8.94 up $0.03 for the week higher for the 4th consecutive session.
Traders are keeping a close eye on the 7/10 day weather forecast, which is still showing ample rain and normal temperatures. The crop is off to an outstanding start, but prices have not reacted negatively, which is a little surprising. The next level of resistance on the daily chart is around the 9.05 area. The volatility still should remain high as there are still around 8 weeks of the growing season left as hot and dry weather conditions can still affect production numbers.
I have been recommending a bullish position from around the 8.97 level over the last couple of weeks. If you took that trade continue to place the stop loss at the 8.71 area as an exit strategy as a chart structure will not improve for another 6 trading sessions, so you will have to accept the monetary risk at this time. I believe the grain market has bottomed. I think many other commodity sectors look historically cheap, especially when you factor in all of the Federal Reserve aid packages, so continue to play this to the upside.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
Live Cattle Futures
Cattle futures in the August contract settled last Friday in Chicago at 100.00 while currently trading at 103.20 up over 300 points for the trading week as prices have now hit a 4 month high.
I have been recommending a bullish position from around the 99.80 level. If you took that trade continue to place the stop loss under the 10-day low standing at 98.42 as an exit strategy. However, the chart structure will not improve for another 8 trading sessions, so you will have to accept the monetary risk. The next major level of resistance stands at the 105 area, and if that is broken as I’ve talked about in previous blogs, I think prices could head up to the 110 level rather soon as the bullish trend could accelerate.
Cattle prices are trading far above their 20 and 100-day moving average. Technically speaking, this market looks very solid as a possible rounding bottom has taken place on the daily chart, so continue to play this to the upside as there’s more room to run, in my opinion.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH
Trading Theory
Trade with the short term trend, as the saying goes in futures trading, the trend is your friend. Still, sometimes you will be in a market that is trending higher and then has a false breakout to the upside and then suddenly sells off causing you a 2% loss on your equity and you say to yourself that was a bad trade and should I do something different on my next trade.
If it were up to me, I would continue to buy strength and sell weakness because, in the long run, commodity trading is about percentages of success. If you go with the path of least resistance more often than not, you will have the probabilities of success on your side.
I define a trend as a commodity hitting a 20-day high or low as a trendy market if the market is in a consolidation stay away from it and find something that is trending.up or down and go in that direction remembering the money management rules of 2% maximum loss if you are wrong.
What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? I define chart structure as a slow grinding up or down trend with low volatility and no chart gaps. Many of the great trends that develop have very good chart structure with many low percentage daily moves over a course of at least 4 weeks thus allowing you to enter a market allowing you to place a stop loss relatively close due to small moves thus reducing risk. Charts that have violent up and down swings are not considered to have solid chart structure as I like to place my stops at 10-day highs or 10-day lows and if the charts have a tight pattern that will allow the trader to minimize risk which is what trading is all about and if the chart has big swings your stop will be further away allowing the possibility of larger monetary loss.
If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
Michael Seery, President
Seery Futures
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Phone #: 630-408-3325
mseery@seeryfutures.com
There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.
