Seery Futures Commodity Comments For 5-20-19

Seery Futures Commodity Comments For 5-20-19
Seery Futures Commodity Comments For 5-20-19

S&P 500 Futures—The S&P 500 in the June contract is trading lower for the 2nd consecutive session down 17 points at  2841 on concerns about an intensifying fallout from a U.S. crackdown on Huawei weighing on market sentiment.

At the present time I do not have a recommendation in any of the U.S equity markets as I am advising clients to sit on the sidelines as prices bounced off of major support at 2800, however the risk/reward is not in your favor at this time to take a position in either direction.

The S&P 500 is  trading below its 20 day but still above its 100 day moving average as the fundamental picture still remains bullish as global dividends reached a 1st quarter record of $263.3 billion rising 7.8% despite concerns about the world economy.

China will dictate short-term price action as I still have a bullish bias to the upside as the U.S economy is outstanding at the present time, but we’ve had a heck of a run in 2019 so it wouldn’t surprise me to see some type of normal price retracement, however sit on the sidelines and look at other markets that are beginning to trend.

TREND: —MIXED

CHART STRUCTURE: SOLID

VOLATILITY: HIGH

 

Copper pipes factory

Copper Futures—Copper futures in the July contract is down 150 points at 2.7235 a pound still hovering right near major support and a 14 week low. The stock market is sharply lower in early trade on concerns of the Huawei situation as I have been recommending a bearish position from the 2.8240 level and if you took that trade the stop loss has now been lowered to 2.8100 as an exit strategy.

For the bearish momentum to continue prices have to break the May 13th low of 2.7090 in my opinion as the down trend-line still remains intact as prices are still below their 20 and 100 day moving average telling you that the trend remains negative.

China struck a more aggressive tone in its trade war with the United States on Friday, suggesting a resumption of talks between the world’s 2 largest economies would be meaningless unless the U.S changed course.

The chart structure will start to improve later this week as the monetary risk will be lowered as I don’t think any trade agreement with China is in the cards anytime soon. Volatility in copper remains high as I still think there’s a possibility that prices will retest the contract low which was hit on January 3rd at 2.5600 in the coming weeks ahead so stay short & continue to place the proper stop loss.

TREND: —LOWER

CHART STRUCTURE: IMPROVING

VOLATILITY: HIGH

 

 

 

Cotton Futures—Cotton futures in the July contract are down 10 points to start off the week at 65.90 as prices still look to test the contract low which was hit on May 14th at 64.50 in my opinion.

Traders are awaiting this afternoons crop progress report as that certainly will send some volatility back into this market as the grain market has rallied significantly, but has had no impact on cotton prices.

I have been recommending a bearish position from around the 75.74 level and if you took that trade continue to place the stop loss above the 10 day high which now stands at 73.69, however that will be lowered on a daily basis therefor the monetary risk will also be reduced.

The trade war between the United States and China looks to be escalating as that is negative towards prices as China is the number one importer of U.S cotton in the world as I think prices will continue to drip lower until some type of agreement has been made.

Cotton futures are still trading far below their 20 and 100 day moving average as the trend is to the downside and if the contract is broken prices could test the 60 level in the coming weeks ahead especially if ideal weather conditions remain in the southern part of the United States so stay short.

TREND: —LOWER

CHART STRUCTURE: IMPROVING

VOLATILITY: LOW

 

 

 

Soybean Futures—Soybean futures in the July contract is sharply higher this Monday afternoon in Chicago up $0.15 at 8.37 a bushel as the entire grain sector is higher across the board on concerns about flooding as the Midwestern part of the United States is continuing to experience cold and wet weather conditions.

Traders are awaiting this afternoon’s crop progress report with estimates around 30% planted as that is behind the 5 year average of 44%, but at this point in time it’s not of major concern. I have been recommending a bearish position from around the 8.35 level and if you took that trade continue to place the stop loss at 8.48 on a hard basis only as I’m not willing to risk anymore due to the high volatility that we are experiencing.

The trade war with China has certainly depressed prices over the last 6 months coupled with the fact that we could produce 4.2 billion bushels in 2019 which would increase carry over levels which are standing near 1 billion right now as there is still nothing bullish fundamentally speaking about soybean prices.

At the current time I also have a bearish soybean meal trade as that is higher following the coattails of the bean market. Traders will keep a close eye on the next 7/10 day weather forecast as it still looks like cool and wet weather is ahead as it has been an absolutely miserable spring, but stay short and continue to place the proper stop loss.

TREND: —LOWER

CHART STRUCTURE: EXCELLENT

VOLATILITY: HIGH

 

 

 

Sugar Futures—Sugar futures in the July contract are up 10 points at 11.65 a pound in a relatively quiet Monday afternoon in New York still hovering right near the contract low. I have been recommending 2 bearish positions with an average price of 12.06 and if you took those trades the stop loss has been lowered to 12.15 as the chart structure is outstanding and will improve on a daily basis therfor the monetary risk will also be reduced.

Sugar prices are still trading under their 20 and 100 day moving average and if you look at the daily chart the downtrend line still remains, however for the bearish momentum to continue we have to break the May 17th yearly low of 11.43 in my opinion.

At the present time I also have a bearish recommendation in the cotton market as the soft commodities in general remain week as the trade war with China certainly has put the lid on prices here in the short-term.

As I have talked about in previous blogs I still think prices will retest the 11.10 level possibly this week and then maybe go down to the multi-year low of 10.00 so stay short & continue to place the proper stop loss while making sure you risk 2% of your account balance on any given trade.

TREND: —LOWER

CHART STRUCTURE: EXCELLENT

VOLATILITY: LOW

 

Soybean Meal Futures—Soybean meal futures in the July contract is trading higher by 270 points at 297.00 as heavy rains have entered the Midwestern part of the United States once again sending the entire grain market higher this Monday afternoon in Chicago.

I have been recommending 2 bearish trades with an average price around 299 & if you took those trades continue to place the stop loss on a hard basis only at 305.50 as an exit strategy as the volatility is extremely high and will become even more violent as we enter the summer months.

Traders are awaiting this afternoon’s crop progress report as that certainly is going to dictate short-term price action in tomorrow’s trade as I will remain short as I still think more acres will be planted in soybeans as corn acres certainly look to be diminished. Anecdotally speaking I deal with a lot of farmers and they are very concerned about their corn crop especially in the state of Iowa as there are some real concerns and if this wet weather continues look for higher corn prices and lower soybean prices.

Soybean meal is still trading under their 20 and 100 day moving average as the trend is to the downside, however for the bearish momentum to continue we have to break Fridays low of 293 in my opinion.

TREND: —LOWER

CHART STRUCTURE: EXCELLENT

VOLATILITY: HIGH

 

 

 

 

WHEN IS IT TIME TO SELL ? In my opinion if you are long a futures contract and you have lost 2% of your account balance on that trade exit and move on and look at other trends that are beginning as the theory states.

Generally speaking if you long a futures contract I would place the stop loss under the 2 week low which is also the 10-day low as well as an exit strategy as the theory states if a market has been going against you for that timeframe that means that you are probably wrong so it’s time to move on.

Successful traders exit losing trades very quickly as its a mathematical certainty that you will have losing trades so you must manage them well as no exit strategy is 100% correct, but that’s one that I’ve been following for many years and I think it works well.

 

 

10 Year Note Futures—The 10 year note in the June contract is currently trading down 6 ticks at 124/09 hitting a 1 week low as I’ve been recommending a bullish position from around the 124 /15 level and if you took that trade place the stop loss at 122/30 as an exit strategy.

The 10 year note is having a hard time breaking the March 27th high of 124 /31 despite the fact that there has been high volatility in the stock market which usually sends money flows into bonds but this financial remains very stagnant.

At the present time the 10 year note is yielding 2.42% as there is a lot of fundamental news that will dictate short-term price action especially with the trade war escalating with China. The 10 year note is still trading above its 20 & 100 day moving average as the trend remains higher and I do believe that the risk/reward is in your favor.

If you didn’t take the original trade I’m still recommending it at today’s price level as the risk is around $1,300 per contract plus slippage and commission as I still believe strong demand will continue to support prices.

TREND: —HIGHER

CHART STRUCTURE: EXCELLENT

VOLATILITY: LOW

 

U.S Dollar Index Futures–The U.S dollar in the June contract is trading lower by 5 points at 97.77 still lingering around a 3 week high, but still unable to crack the critical April 26th high of 98.08, however I still remain positive.

I have been recommending a bullish position from around the 97.41 level and if you took the trade continue to place the stop loss under the 2 week low standing at 96.81 as the chart structure will not improve for another 7 trading sessions so you will have to accept the monetary risk at this time.

The U.S dollar is trading above their 20 & 100 day moving average, but the main problem is the fact that there is no volatility while acting much like the 10 year note which I’m also recommending to the upside so stay long and don’t 2nd guess as I still think higher prices are ahead.

If prices do crack the 98.08 level I will be looking at adding more contracts to the upside as the risk/reward would be in your favor in my opinion due to the low volatility as that could happen possibly in this week’s trade especially if some type of geopolitical news comes about.

TREND: —HIGHER

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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