Gold Futures

Gold futures in the December contract settled last Friday in New York at 1,462 while currently trading at 1,466 up about $4 for the week. However, ending the week on a sour note as all of the interest still lies in the S&P 500, which is hitting another all-time high as money flows continue to come out of gold.

At the current time, I do not have any precious metal recommendations, but I do believe gold prices are headed lower as I see no reason to be a buyer as prices are right near a 3 1/2 month low. Gold prices are trading under their 20 and 100 day moving average as the trend is to the downside, and if you take a look at the daily chart, the down trend line also remains intact as optimism about a trade deal with China continues to depress prices in the short-term.

The 10-year note is currently yielding 1.90% as that has rallied from 1.30% just a couple of months ago and that is also another negative after towards gold prices so if you are short stay short in my opinion so place the stop-loss above the 10-day high which stands at 1,517 as an exit strategy.

TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

S&P 500 Futures

The S&P 500 in the December contract settled last Friday in Chicago at 3090 while currently trading at 3112 up about 22 points for the trading week, hitting another all-time high as the gravy train continues and I still believe it will continue throughout the holiday season.

I have been recommending a bullish position from around the 3006 level and if you took that trade, continue to place the stop loss under the two week low standing at 3063 as the chart structure will improve in next week’s trade. Therefore, the monetary risk will be lowered once again. The S&P 500 has now traded higher for the 4th consecutive session on optimism about an agreement with China as excellent earnings, and extremely low-interest rates continue to fuel prices as money flows are entering the entire U.S equity market.

The S&P 500 is trading far above its 20 and 100-day moving average as the trend is higher. However, the volatility remains relatively low as we continually grind higher on a weekly basis. I see no reason to try to pick the top and go short as there a still room to run to the upside, so stay long and continue to place the proper stop loss as who knows how high prices can go.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Orange Juice Futures

Orange juice futures in the January contract was unchanged for the week currently trading at 100.00 as prices look to be bottoming as we enter the highly volatile winter season.

At the current time, I’m sitting on the sidelines, waiting for the breakout to occur, which stands at the 102 level. If that situation happens, I would recommend buying a futures contract while placing the stop loss under the contract low at 96.10. The risk would be around $900 per contract plus slippage commission as the chart structure is outstanding at the current time; therefore, the risk/reward is in your favor, in my opinion.

Juice prices are trading slightly above their 20-day but still below its 100-day moving average, which stands at the 104 level as fundamentally speaking inventories of orange juice are 33% higher than last year as we have ample supplies and ideal growing conditions in the State of Florida. Still, things can change very quickly as the weather will be the primary dictator of short-term price action.

Look to play this to the upside as I think the downside is minimal as my other soft commodity recommendation is a bullish sugar trade as both of these commodities are also grown in the country of Brazil.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Rice Futures

Rice futures in the January contract is trading lower for the 5th consecutive session hitting a 2 /12 month low after settling last Friday in Chicago at 12.04 while currently trading at 11.73 down over $0.30 for the trading week continuing its bearish momentum.

I have been recommending a bearish trade from around the 11.82 level, and if you took that trade, continue to place the stop loss above the 10-day high, which stands at 12.10 as an exit strategy. As I have talked about in many previous blogs, I do believe the price gap that was created on August 26th at 11.50 will be filled possibly in next week’s trade as I also now have a short soybean recommendation as I think the whole grain market looks weak.

Rice prices are trading under their 20 and 100-day moving average as that tells you the trend is to the downside as the volatility remains relatively low for such a historically volatile commodity. Continue to play this to the downside while placing the proper stop loss as I still think lower prices are ahead.

TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

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

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.

Cocoa Futures

Cocoa futures in the March contract settled last Friday in New York at 2498 while currently trading at 2676 up about 178 points for the week as I am currently not involved. Still, I do think higher prices are ahead as I am certainly not recommending any type of bearish position.

Fundamentally speaking strength in global cocoa demand and shrinking supplies as the International Cocoa Organization (ICO) on Thursday said the global cocoa market in 2020/21 will have a “very small” deficit of -50,000 MT and that it expects cocoa prices to continue to climb, partly due to the discussion of a “living income differential” in Ivory Coast and Ghana, as well as rising global consumption.

Cocoa prices are trading far above their 20 and 100-day moving average as the trend is to the upside as prices have traded higher for the 6th consecutive session with the next major level of resistance at 2800 as there a still significant room to the upside. If you are long a futures contract, I would place the stop loss under the 10-day low standing at 2435 as an exit strategy as the chart structure will improve in next week’s trade.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Soybean Futures

Soybean futures settled last Friday in Chicago at 9.31 a bushel while currently trading at 9.23 as I am now recommending a short position while placing the stop loss above the 10-day high standing at 9.42 to as the risk is around $1,000 per contract plus slippage & commission.

Soybean prices are trading slightly above their 20-day but still below their 100-day moving average with the next major level of support around the 9.00 area as the volatility is relatively low at the current time as harvest will be completed in the next week or so. South America’s crop is off to an excellent start as ideal weather conditions persist. There still is no trade agreement with China as that continues to put pressure on prices in the short-term, so play this to the downside as the risk/reward is in your favor, in my opinion.

At the current time, my only other grain recommendation is a bearish rice trade, which is lower in today’s action as the grain market as a whole remains weak. This year’s crop produced around 3.55 billion bushels, which is 900 million less than the 2018 crop. However, the main problem here is demand coupled with high carry-over levels, especially so play this to the downside.

TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Sugar Futures

Sugar futures in the March contract is trading at 12.74 a pound hitting a 6-week high. I have been recommending a bullish position initially from around the 12.62 level, then adding another contract today around the 12.73 level as it looks to me that prices will retest the 13.00 area in the coming days ahead.

The chart structure at the current time is outstanding, and if you took both of these trades, continue to place the stop-loss at the 12.29 level as the risk on both contracts is around $800 plus slippage and commission.

The volatility has been extremely low over the last several weeks as it is nice to see a 1.83% move in today’s trade as historically speaking prices look very cheap, in my opinion as I think prices have finally bottomed out. Sugar prices are now trading above their 20 and 100-day moving average for the 1st time in months, and that tells you that the trend has turned higher, so continue to place the proper stop loss.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Trading Theory

What Is A Rounding Top Chart Pattern? A chart pattern used in technical analysis which is identified by price movements that, when graphed, form the shape of an upside-down “U.” A rounding top may form at the end of an extended upward trend and indicates a reversal in the long-term price movement.

The pattern can develop over several weeks, months, or even years and is considered a rare occurrence by many traders.

This pattern is also described as an inverse saucer. A rounding top represents a sell signal to technical analysts. The initial upward trend becomes exhausted as the demand for the stock dries up.

The reversal to the downward slope of the rounding top indicates that demand has tapered off, and a surplus supply is present. Basically, there are more sellers than buyers.

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
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: 630-408-3325
[email protected]

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.





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