Mike Seery's Daily Commodity Report 12-12-17

12 Dec in Bitcoin, Blog, Bonds, commodities, commodity consulting, commodity trading, corn, currencies, 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

Bitcoin Futures---Bitcoin futures in the January contract are currently down 85 points at 18,460 as this is a new contract that began in yesterday's trade as I will not give any recommendations at this point as we need to have some type of chart pattern to develop which will take several more weeks to occur as the volatility in this cyber currency is extremely high as that's what you're looking for as a trader so we will make this an active part of our repertoire.

Every point up or down in bitcoin equals $1 as we are down 85 points which equals $85 profit or loss as this market can move several thousand dollars in one day and is extremely volatile with huge price swings daily so start monitoring the situation as there will be special opportunities from time to time just like there are in many of the other commodity sectors.

The technical indicators at this time such as moving averages just don't exist as we need more data as we could be actively trading this in 4/6 weeks as this will be very interesting in my opinion on how this unfolds over the long term.

 

 

 

 

Silver Futures--- Silver futures in the March contract have now traded lower 10 out of the last 11 sessions lower by another 8 cents at 15.70 an ounce hitting a 5 month low as the precious metals across the board remain very weak as all of the interest at the current time is in the cyber currency called Bitcoin as that is the main reason why I think prices have dropped so dramatically in the last several weeks.

Silver prices look to retest the July 7th low of 15.22 in the coming weeks ahead as prices are now trading far below their 20 and 100 day moving average as clearly this trend has turned significantly negative, however I am not involved in this market at the present time as the chart structure is extremely poor due to the fact that prices have fallen out of bed.

At the current time I do not have any trade recommendations in the precious metals as it looks to me that lower prices are ahead & as I've talked about in many previous blogs I think silver prices historically are very cheap and are limited to the downside, but at the current time look at other markets with better chart structure & a risk/reward scenario that's in your favor as catching a falling knife is very dangerous in my opinion as it looks to me that a bottom has not been created just yet.

TREND: LOWER

CHART STRUCTURE: POOR

VOLATILITY---MODERATE

 

 

There is a substantial risk of loss in futures and futures options. 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.

 

 

 

 

Gold Futures--- Gold futures in the February contract are trading lower for the 4th consecutive session down another $4 at 1,242 an ounce continuing its bearish momentum as traders are awaiting tomorrow's FOMC meeting as they look to raise interest rates as speculation also is that they might raise interest rates 3 times in 2018 as that is a bearish fundamental indicator towards gold and the precious metals as that is why you have seen selling across the board over the last couple of weeks.

Gold prices look to retest the July 10th low of 1,219 as this chart exactly mirrors the silver and platinum chart to the downside as prices are trading far below their 20 and 100 day moving average as clearly this trend is negative as all of the interest lies in Bitcoin and the U.S stock market which hit another all-time high in today's trade.

Volatility in gold is relatively low as we are just grinding lower on a daily basis with the next major level of support around the 1,230 level & if that is broken we could end 2017 very negatively as there is no interest in this market at all at the present time.

Money flows continue to flow into the Dow Jones as that trend is extremely strong to the upside as gold prices are continuing to go lower due to the fact that money flows are coming out of that sector as North Korea and the United States tensions have waned in the recent weeks and if you are short continue to stay short.

TREND: LOWER

CHART STRUCTURE: POOR

VOLATILITY---LOW

 

 

 

 

TRADING THEORY ----What Is The RSI Oscillator ? ---The RSI oscillator ranges from 0 to 100 and when a commodity is deemed to be at overbought levels when the RSI approaches the 70 level and beyond meaning if the oscillator has an overbought condition of 92 that is higher and even more of an overbought condition then the 70 level and could mean that its getting overvalued and is a good candidate for a short term pullback.

On the other hand if the RSI approaches 30 or below that is an indication that the commodity may be getting oversold and therefore likely to become undervalued. The closer to zero the more oversold the commodity has become and the odds can increase for a kickback.

If you are using this indicator you will be trading counter trend meaning that   you are always buying in a down market and selling in an up market or using the oscillator to determine when to take profits. In my opinion this indicator should be used with other indicators when establishing a position or when exiting a trade.

 

 

 

 

Lumber Futures--- Lumber futures in the January contract are currently trading down 300 points at 426.80 as I have been recommending a bearish position from around the 426 level & if you took the trade the stop loss remains the same at 439 as traders are awaiting tomorrow's FOMC meeting on interest rates which will send high volatility into this market.

Lumber prices hit an all-time high last month around the 460 level as I think all of the good economic news may have already been reflected into this market as the risk/reward is in your favor in my opinion as lumber can become an extremely volatile market with large daily price swings.

For the bearish momentum to continue we have to break the November 27th low of 411 as prices are now trading below their 20 day but still above their 100 day moving average coupled with the fact that we have low volatility heading into this report.

Many of the commodity sectors have been drifting lower as we are starting to exit 2017 as I do think lumber prices have topped out as the original risk on this trade was around $1,400 per contract plus slippage and commission as the chart structure will not improve for another 5 trading sessions as all of the action will lie in tomorrow's trade.

TREND: MIXED--LOWER

CHART STRUCTURE: EXCELLENT

VOLATILITY---LOW

 

 

 

 

Cotton Futures--- Cotton futures in the March contract are currently trading up 10 points at 73.10 reacting neutral to the USDA crop report which raised exports and lowered ending stocks, but that has already been reflected into the price as cotton has had a hard time breaking the 74 level as it was attempted earlier in the session, but now is selling off towards the closing bell.

I have been recommending a bullish position over the last month around the 70.50 level when we broke out of a 9 week consolidation & if you took that trade the stop loss remains at 72.10 which is just and eyelash away as the chart structure has improved tremendously due to the fact that prices have been going sideways over the last 2 weeks.

Prices are still trading above their 20 &100 day moving average as the trend still remains higher as this commodity has been much stronger than the rest of the agricultural sectors which continue to melt down every day as we are hitting contract lows is many different commodities as we are about to exit 2017 as I think year end selling is at hand.

Strong demand has been the main reason why cotton prices remain firm despite the fact that we still have nearly double the ending stock inventory that we had in 2016/2017 so continue to play this to the upside while placing the proper stop loss as 2nd guessing is the kiss of death in my opinion over the long haul as sticking to a trading system and rules are the way to trade in my opinion.

TREND: HIGHER

CHART STRUCTURE: EXCELLENT

VOLATILITY---INCREASING

 

 

 

 

Corn Futures--- Corn futures in the March contract are trading lower by 1 cent at 3.47 a bushel hitting another fresh contract low as this market has absolutely no fundamental news to push prices to the upside at this point in my opinion as I'm currently sitting on the sidelines, but I'm certainly not recommending any type of bullish position as the grain market is incredibly weak.

If you are short a futures contract place the stop loss above the 10 day high at 3.61 as the chart structure will improve later this week lowering monetary risk as it looks to me that we could head down to the 3.25 level which is the next major level of support as wheat and corn hit contract lows on a daily basis.

The agricultural sectors have absolutely been decimated in the last couple of weeks as I blame it on year end selling as it seems like everybody wants out of everything closing their books as I still think 2018 could be a different situation as some of these prices are very cheap, but this trend clearly is to the downside as I see no reason to own corn or wheat.

Corn prices are trading far below their 20 and 100 day moving average as the funds are still short around 160,000 contract as they believe lower prices are ahead as they have been right so continue to look to sell rallies in my opinion at least through the end of 2017. I'm very surprised at the action in many of the commodity sectors as we have hit contract lows in many different sectors as there seems to be mass liquidation occurring.

TREND: LOWER

CHART STRUCTURE: SOLID

VOLATILITY---LOW

 

 

 

 

10 Year Notes---The 10 year note in the March contract finished lower by 4 ticks at 124/05 continuing its bearish momentum to the downside as I have written about this market for quite some time & if we close under the 124 level I will be initiating a short position while placing the stop loss above the 10 day high standing at 124/27 risking around $1,000 per contract plus slippage & commission.

The 10 year note is trading below its 20 and 100 day moving average as the trend is lower as we have held this level on a half-dozen times only to rally every single time, however the U.S dollar continues to move higher coupled with the fact that the stock market hits new highs almost every single day as its very clear in my opinion that interest rates are on the rise as we await the FOMC meeting tomorrow which is expected to raise the rate by a 1/4 of a percent.

It has also been suggested that in 2018 the Federal Reserve will raise interest rates 3 or 4 times as the rates are way too low for this type of growth in the United States so continue to look at this to the downside as volatility certainly will increase in 2018.

The 10 year note is averaging around 2.35% as our GDP continues to climb over 3% on a quarterly basis as I think we can get 4%/5% next year as an extremely bullish stock market could mean an extremely bearish bond market.

TREND: LOWER

CHART STRUCTURE: EXCELLENT

VOLATILITY---LOW

 

 

 

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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There is a substantial risk of loss in futures and futures options. 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.

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