Mike Seery's Limit Up Commodity Report 1/12/18

12 Jan in Blog, commodity consulting, commodity trading, corn, dow jones futures, futures, futures trading, heating oil futures, Mike Seery, NASDAQ 100 futures, natural gas futures, oats, option trading Crude oil futures, option trading S&P 500, seeryfutures, soybean meal, soybean oil, soybeans, unleaded gasoline futures, wheat

Gold Futures--- 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 4 month high as 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 4 month low in today's trade continuing its bearish trend which has definitely supported gold and the precious metals recently, but the chart structure is poor coupled with the fact that we are in overbought territory so 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 as this market has rallied substantially from the recent low that was hit on December 12th at 1,238 as we have now rally 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 basically based on a weak U.S dollar.

Gold is also riding the coattails of the energy market which is right at a 3 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--- 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 still remains surprisingly low.

If you take a look at the daily chart its basically mirroring the gold chart to the upside as the U.S dollar is hitting a 4 month low in today's trade as that is definitely supporting silver prices over the last month.

Silver is trading above its 20 and 100 day moving average as the trend clearly is to the upside as I will be looking at a possible bullish position if prices breakout above major resistance at the 17.50 level as 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 the commodity markets as so far only the energies and the precious metals have rallied, but the agricultural markets still remain on the defensive as oversupply issues continue to keep a lid on those sectors, but 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 definitely 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

 

 

 

 

Cocoa Futures--- Cocoa futures in the March contract is currently trading at 1909 after settling last Friday in New York at 1895 up slightly for the week as I've been talking about a bullish trade if prices broke 1953 on a closing basis as we traded above that level twice this week, but was unable to close above that breakout level.

The chart structure is starting to improve on a daily basis as we have been basically stuck in a 5 week consolidation as I will continue to look at a bullish position if the 1953 level is broken on closing basis possibly next week as the risk/reward is becoming in your favor due to the sideways trading manner.

Cocoa prices are still trading above their 20 day but below their 100 day moving average as the West African harvest is starting to wind down and should be complete several weeks from now as a seasonal bottom might be occurring at this time.

If you take a look at the daily chart there might be a possible head and shoulders bottom being created coupled with the fact that there may have been a spike bottom also created on December 22nd around the 1804 level which was also the contract low as the soft commodities still remain bearish except for the cotton market as that is my only recommendation at the current time so keep a close eye on this market as we could be involved in next week's trade.

TREND: MIXED

CHART STRUCTURE: SOLID

VOLATILITY---INCREASING

 

 

 

 

Natural Gas Futures--- Natural gas futures in the February contract are trading higher for the 2nd consecutive session hitting a 6 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 5 trading sessions so you will have to accept the monetary risk at this time. Natural gas prices are now trading above their 20 and 100 day moving average as the trend has turned positive as the volatility certainly has come to life as well and that is expected especially in the months of 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

 

 

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10 Year Note Futures---The 10 year note in the March contract settled last Friday in Chicago at 123/16 while currently trading at 122/26 down about 22 points for the trading week as I have been recommending 2 short positions with the original around the 123/24 area and the 2nd around the 123/12 level and if you took those trades place the stop loss come Monday's trade will be lowered to 124/00 as the chart structure will improve on a daily basis next week.

The 10 year note is trading below its 20 and 100 day moving average as this trend has accelerated to the downside as we are now yielding about 2.58% as the U.S stock market is hitting another all-time high in today's trade as the higher stock prices go the higher the bond yields will go in my opinion so stay short as I still think we could trade as high as 3.50% later this year.

Money flows are coming out of the bond sector and into the equity market as I think that will continue for some time to come as I still don't see any ceiling happening in the U.S stock market as I think we will trading above 30,000 in the months ahead in the Dow Jones Industrials and that should put pressure on bond yields, however if you are not short this market wait for some type of price retracement before entering a fresh position therefore lowering the monetary risk.

Historically speaking the yield on the 10 year note is extremely low as we used to trade around the 6% level so there is a lot of room to run especially if we can get a 4% GDP in the months ahead.

TREND: LOWER

CHART STRUCTURE: SOLID

VOLATILITY---LOW

 

 

 

 

Crude Oil Futures--- 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 3 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 4 month low which is definitely 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 as 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 as 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 still remains relatively low.

TREND: HIGHER

CHART STRUCTURE: SOLID

VOLATILITY---LOW

 

 

 

 

Coffee Futures---Coffee futures in the March contract settled last Friday at 128.45 while currently trading at 121.45 down about 700 points for the trading week lower for the 6th consecutive session looking to retest major support at the 120 level in my opinion.

This market has been incredibly choppy over the last 6 months as I will continue to look for a bullish position, but at this point in time be patient as the fundamental picture still remains bearish as ideal weather conditions in the country of Brazil continue to hamper prices here in the short term.

Coffee futures are trading under their 20 & 100 day moving average as the trend is lower, however I will not take a short position, but the agricultural markets continue to be under pressure across the board despite the fact that the U.S dollar has hit a 4 month low as overproduction and large global supplies continue to put pressure on these commodities here in the short term.

The entire soft commodities except for cotton continue to move lower as anything grown in Brazil at the current time is bearish including soybeans, orange juice, sugar, and coffee as I still think that this market will rebound we just need some type of spark to ignite this commodity higher so look at other markets that are beginning to trend to the upside as we probably will not be involved for several more weeks.

TREND: LOWER

CHART STRUCTURE: SOLID

VOLATILITY---LOW

 

 

 

 

Corn Futures--- Corn futures in the March contract settled last Friday in Chicago at 3.51 a bushel while now trading at 3.46 down about 5 cents for the trading week hitting a fresh contract low once again as I currently have no recommendations in in the grain sector as this market still remains extremely weak in my opinion.

The USDA released its crop report this afternoon stating that we produced 14.604 billion bushels as that was raised by 26 million coupled with the fact that bushels per acre hit 176.6 which was another record as the problem with corn and the grain market as a whole is we keep producing record crops year in and year out therefor ballooning carryout levels to historic highs.

Weak demand is also continuing to put pressure on corn prices despite the fact that the U.S dollar hit a 4 month low which is generally supportive grain prices, but this market looks to head lower as the large money managed funds are still holding near record short positions as they truly believe the bearish trend will continue here in the short term.

In my opinion I do think the downside is limited as the volatility in corn at the present time is extremely low as I am looking at a possible bullish position if prices break 3.55 as the chart structure remains excellent due to the fact that we have a tight trading range over the last several months.

TREND: LOWER

CHART STRUCTURE: EXCELLENT

VOLATILITY---LOW

 

 

 

 

S&P 500 Futures--- The S&P 500 in the March contract has now traded higher 8 out of the last 9 trading sessions settling last Friday in Chicago at 2742 while currently trading at 2789 up about 57 points for the trading week and finishing up 19 points this afternoon closing right at session highs.

The Dow Jones Industrial Average is now trading at 25,803 as it looks to me that we will crack 26,000 possibly in Monday's trade as I still see no stopping this market to the upside as large corporations are being repriced due to the fact of massive tax cuts and huge regulation cuts.

At the current time I'm recommending a short position in the 10 year notes which finished lower today as they will move in opposite directions as money flows continue to go into equities and out of bonds as I still see sharply higher prices out of all the equities in 2018 as I'm definitely not recommending any type of short position as this trend is incredibly strong.

Many large corporations hit all-time highs today including Apple, Alphabet, Microsoft, Amazon, and Netflix coupled with the banking industry such as J.P. Morgan which also hit all time highs as higher interest rates definitely help the financial sector so continue to play this to the upside as I still think the S&P 500 could produce a 25% gain in 2018 as I have been writing about that for quite some time.

TREND: HIGHER

CHART STRUCTURE: IMPROVING

VOLATILITY---LOW

 

 

 

 

Cotton Futures---Cotton futures experienced a wild trade with high volatility to end the week settling last Friday in New York at 78.01while closing today at 81.68 up about 360 points for the trading week however selling off sharply from early session highs as we traded up to 84.65 before the USDA report was released sending prices negative for the trading session.

I have been recommending a bullish position from the 70.50 level and if you took the trade continue to place the stop loss at 77.37 as volatility certainly has expanded as the crop report was slightly bullish, but it already had been reflected into the price as profit-taking then ensued.

Cotton prices are trading far above its 20 and 100 day moving average as the trend clearly is the upside as the USDA lowered production numbers slightly as the next major level of resistance was today's high around the 85 level which I still think could be retested in next week's trade so stay long & continue to place the proper stop loss.

The U.S dollar was also down about 100 points hitting a 4 month low as that is definitely supportive commodity and cotton prices in general despite the fact that the agricultural markets still remain weak.

TREND: HIGHER

CHART STRUCTURE: IMPROVING

VOLATILITY---HIGH

 

 

If you are looking to contact Michael Seery (CTA—COMMODITY TRADING ADVISOR) at 1-630-408-3325 I will be more than happy to help you with your trading or visit www.seeryfutures.com

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