Orange Juice Futures—Orange juice futures in the September contract is trading lower for the 2nd consecutive session down another 40 points at 94.00 hitting a contract low in yesterday’s trade coupled with the fact that prices are now right near a 9 year low and still looks negative in my opinion.
I’ve been recommending a bearish trade from the 98.50 level and if you took that trade continue to place the stop loss above the 2 week high standing at 103.50 as an exit strategy as the chart structure will not improve for another 4 trading sessions so you will have to accept the monetary risk at this time.
At the current time the agricultural markets across the board look weak as a lack of a trade deal with China will certainly impact prices going forward as I think orange juice will crack the 90 level possibly in this week’s trade.
Remember my trading theory states that you never want to buy a commodity that is hitting a contract low and you never want to sell a commodity that is hitting a contract high so stay short as there is more room to run in my opinion.
CHART STRUCTURE: EXCELLENT
Coffee Futures—Coffee futures in the December contract is lower for the 3rd consecutive session hitting a fresh 14-year low down another 125 points at 93.55 a pound as the soft commodity sector has nothing going for it at the current time.
If you have been following my previous blogs you understand that I am bearish the agricultural markets as they all remain weak as it looks to me that coffee will break the 90.00 level possibly in this week’s trade as fundamentally and technically speaking this market has nothing going for it.
Harvest in the country of Brazil is around 95% complete as that is a good fundamental situation as seasonal harvest pressure at this time of the year occurs due to ample supplies coming into the market, but that situation could end in the month of September.
At the current time I’m certainly not recommending any type of bullish position in coffee as this trend is strong to the downside despite the fact that we are at a 14-year low, however prices still could trade lower. The U.S dollar is strong against the Brazilian Real as that is also a negative impact on prices so wait for better chart structure to develop before even looking at a bullish position as I will not go short at these depressed levels.
CHART STRUCTURE: POOR
Wheat Futures—Wheat futures in the September contract is trading lower for the 2nd consecutive session hitting a 3-month low down another $0.07 at 4.58 a bushel and if you have been following my previous blogs you understand that I am bearish the entire grain sector.
I have been recommending a bearish position from the 5.04 level and if you took that trade continue to place to stop loss at the 2 week high standing at 5.07, however in 2 trading days the stop loss will be reduced significantly as the chart structure will improve tremendously therefor the monetary risk will be lowered.
As I have talked about in many previous articles I do believe prices will retest the May 13th contract low of 4.27 in the coming weeks ahead as ideal weather conditions in the southern Great Plains continue to put pressure on prices so stay short and place the proper stop loss.
I will be looking at adding more contracts on any type of price retracement therefor the monetary risk would be reduced so be patient as I see absolutely no reason be a buyer of wheat or any of the grain market as I also have a bearish rice position at the current time.
CHART STRUCTURE: IMPROVING
Rice Futures–-Rice futures in the November contract is trading lower for the 4th consecutive session down another $0.05 at 11.28 as I’ve been recommending a bearish position from around the 11.38 level and if you took that trade continue to place the stop loss above the 2 week high standing on August 14th at 11.94 as an exit strategy.
Rice prices have now filled the gap that was created on May 20th as I still think lower prices are ahead due to the fact of no trade agreement with China probably for the rest of 2019 as rice is the most eaten commodity in the entire world.
Rice prices are trading below their 20 and 100 day moving average as the trend clearly is to the downside as we have fallen off of a cliff over the last week as I still think rice prices will test the 10.50 possibly in next week’s trade.
The volatility in rice can explode over the course of time as historically speaking this is a very volatile commodity so make sure that you risk only 2% of your account balance on any given trade as the proper money management technique as I see no reason to be a buyer of the grain market or rice so stay short as the path of least resistance is lower.
CHART STRUCTURE: IMPROVING
10 Year Note Futures–-The 10 year note in the September contract is currently up 12 ticks at 130/26 continuing its bullish momentum as stimulus programs across the European countries continue to support bond yields at this time.
I have been recommending a bullish position from the 128/00 level as I will now be adding more contracts while continuing to place the stop loss under the 2 week low standing at 129/12 on a closing basis only as I truly believe lower interest rates are ahead.
I’ve been trading the commodity markets for over 25 years as adding to winners and getting out of losers is the most successful way to trade in my opinion as I see no reason to be short U.S bonds which is way overpriced compared to the 12 countries that have negative interest rates so stay long and continue to play this higher.
The 10 year note is trading above its 20 & 100 day moving average as the trend clearly is higher with the next major level of resistance at the 132 level as the yield is at 1.55% as I still believe we go down to the 1% in the coming months ahead as President Trump wants a 100 basis point drop in interest rates and I believe the Federal Reserve will accommodate.
CHART STRUCTURE: IMPROVING
WHEN DO YOU EXIT A TRADE ?— The biggest question that I have been asked is when do I exit a winning trade and when do I exit a losing trade? In my opinion the rule of thumb that I use is placing my stop loss at the 10 day high if I’m short or a 10 day low if I’m long as the theory is that I do not want something to go against me for more than 2 weeks.
The other rule of thumb is to place your stop loss at the 2% maximum loss allowed in your account for any given trade.
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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