Weekly Futures Recap With Mike Seery

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the June contract settled last Friday at 1,309 while going out today around 1,290 down by about $20 for the trading week as the Ukrainian situation has stalled sending gold prices back down into the recent trading range. Gold futures are trading below their 20 but right at their 100 day moving average as prices have been consolidating in the last 5 weeks trading in a $30 range as I’ve been sitting on the sidelines waiting for a better chart pattern to develop but if you are looking to get into this market on the long side I would buy at today’s prices placing my stop at the 10 day low of 1,365 risking around $2,500 per contract and if you’re looking to get short this market I would sell at today’s price while putting my stop loss at 1,310 risking around $2,000 as the chart structure is relatively tight at the current time. Gold prices rallied from 1,180 all the way up near $1,400 an ounce 2 months ago so this is basically the 50% retracement and I think you will see a consolidation for quite some time so keep a close eye on this chart as it appears to me that a breakout is looming.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Silver Futures

Silver futures in New York continued their bearish trend this week settling last Friday at 19.55 finishing lower by about $.45 for the trading week as I still think there’s a possibility that a spike bottom occurred in last Fridays trade as $19 has been very difficult to break on the downside. Silver futures have come all the way from slightly above $22 in late February all the way down to today’s level and from $35 in 2013 so this is been a bear market for well over 1 year as there seems to be a lack of interest, however eventually silver will turn around and join the rest of commodities higher but at this point there’s just very little interest. Silver futures are trading below their 20 and 100 day moving average telling you that the trend is lower and as I’ve talked about many times before if you have deep pockets and you’re a longer-term investor I think prices down at these levels are relatively cheap and if prices went lower I would continue to dollar cost average as there is real demand for silver.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Copper Futures

Copper futures in the July contract were slightly higher for the trading week closing near 2 month highs with excellent chart structure as I’m still recommending to sit on the sidelines at the current time but prices look like they have bottomed as prices are trading above their 20 day but still below their 100 day moving average telling you that the trend is sideways to mixed and if your bullish this market I would buy at today’s price level of 3.07 a pound while placing my stop at 3.00 risking 700 points or $1,750 per contract.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Crude Oil Futures

Crude oil futures are trading below their 20 day but still above their 100 day moving average stating that the trend is mixed as I am currently sitting on the sidelines as there is no trend currently. The fundamentals are bearish in oil as stock piles are at 85 year highs as prices peaked at 104 last month now looking at support between 97-98 dollars a barrel as I think lower prices are ahead however I am not currently participating in this market so wait for better chart structure to develop.
TREND: MIXED
CHART STRUCTURE: OK

Orange Juice Futures

Orange juice futures in the July contract sold off 80 points this Friday afternoon currently trading around 160 after settling last Friday at 160.25 trading in a 3 week range while still trading above its 20 & 100 day moving average as the trend is still higher but currently I am sitting on the sidelines in this market keeping a close eye on a possible breakout to the upside. Many of the agricultural commodities have run out of steam in recent days but orange juices prices are only about 500 points from new contract highs as prices remain relatively strong due to the fact of greening disease in the United States and a poor crop in Brazil as the fundamentals could continue to push prices higher. I thought orange juice can get above 200 however when prices hit a 2 week low it was time to move on and find something else that is trending but I do believe this market is headed higher and if you're looking at getting in at today's price I would place my stop at the 10 day low of 157 which created a possible double bottom last week risking around 600 points or $900 per contract.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Wheat Futures

Wheat futures for the December contract reacted very neutral to the USDA crop report as prices are trading down $.10 at 7.44 a bushel but up about $.9 for the trading week on concerns about hot temperatures in the southern Great Plains hurting crop production as prices have hit 10 month highs. I have been recommending buying the wheat market when it broke above 7.40 while placing the stop loss at the 10 day low which currently stands at 7.20 risking around $.20 & if you buy at today’s price level the risk is around $.35 or $1,750 per contract as $8 and higher could be hit if hot & dry conditions persist. Wheat futures are trading above their 20 and 100 day moving average and if you look at the hard red winter and spring Minneapolis wheat they are all surging to the upside as this market was extremely bearish in 2013 & then turned on a dime and now is very bullish due to weather problems. Volatility in wheat is very high at the current time and if you’re looking to get into this market you might want to look at some type of bull call option spread limiting your risk to what the premium costs and allowing you to deal with daily fluctuations without getting stopped out as can happen with the futures contract.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in the July contract were sharply lower this week finishing down over 1150 points this Friday afternoon to close around 184.00 a pound and I’ve been recommending a long position in coffee for quite some time as we got stopped out at the 194 level today which was the 2 week low so sit on the sidelines and wait for another trend to develop as prices could possibly retest the recent lows of around 170. Coffee futures are trading below their 20 day and above their 100 day moving average as the trend is sideways to lower currently so look for another market that is in a stronger trend but keep a close eye on this market as I do think prices are limited to the downside and I would be an interested buyer around the 165 level which was hit in early April. Coffee prices broke above to new contract highs 3 weeks ago but prices have just petered out here in recent weeks as crop estimates start to come out in the next several weeks.
TREND: MIXED
CHART STRUCTURE: POOR

Sugar Futures

Sugar futures finished the week down around 20 points trading in nonvolatile action as prices are testing support at 17.07 settling this Friday at 17.20 and if that level is broken then I would place my stop loss above the 10 day high which stands at 18.03 risking around 100 points or $1,100 dollars per contract. The chart structure is excellent at the current time as the trend is lower as prices are trading below their 20 & 100 day moving averages as prices have been in a 100 point trading range over the last month so keep a close eye on the 17 level for a possible short as the soft commodities have turned negative recently.
TREND: MIXED
CHART STRUCTURE: OUTSTANDING

Soybean Futures

Soybean futures in the November contract are trading below their 20 day but above their 100 day moving average telling you that the trend is mixed as prices reacted neutral to the USDA crop report which came out this afternoon. The report estimated a 330 million carry over for the new crop while the old crop was estimated at 130 million bushels as I am recommending a short position in the November soybeans if prices break 12.10 a bushel which is the 4 week low as prices are currently trading at 12.26 while then placing your stop loss at 12.50 risking around 40 cents per contract or 2,000 dollars.

The chart structure is outstanding at the current time so be patient and wait for the breakout to occur as I am sitting on the sidelines at the current time. It was a wild ride this week in the July soybeans as I exited as prices sold off sharply only to rebound back as that was a very disappointing trade but you have to have an exit strategy as I still think old crop soybeans are going higher but I am not participating at the current time. Sometimes as a trader you will get stopped out of the market on the high or the low and you’re going to have to deal with that like I did but you must have a game plan because sometimes that stop loss will save your butt.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures reacted slightly negative to the USDA crop report sending prices lower by 70 points to trade around 92.35 in the July contract as I have been advising to be long this market placing your stop loss at 91.78 risking around 50 more points or $250 dollars per contract from today’s price level. This market has been going sideways for the last 2 months as prices are trading below their 20 but above its 100 day moving average telling you that the trend is mixed and if you get stopped out of this market at the 10 day low then sit on the sidelines and wait for a trend to develop. Volatility is very low in cotton at this given time and with the summer months ahead with possible weather problems if you are an option trader take advantage of cheap put and call options as volatility certainly will increase as cotton prices can have large price swings in the summer so this tight trading channel will be broken soon.
TREND: MIXED
CHART STRUCTURE: OUTSTANDING

If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Corn Futures

Corn futures in the December contract are sharply lower this Friday afternoon in Chicago trading down by more than $.12 cents at 4.99 a bushel as the USDA crop report was released projecting a 165 corn yield per acre which is extremely high as an average which could produce another record crop of 13.9 billion bushels basically the same crop as we had last year which sent corn prices down into the low $4 range. I am sitting on the sidelines in the corn market currently waiting for a trend to develop, however the fundamentals in new crop corn and new crop soybeans are not bullish as they are quite the opposite as supplies are increasing and if there are record crops produced once again you will see corn prices head substantially lower so if your farmer you want to start to hedge up at these levels in my opinion.

The growing season is very long and it’s easy to project a 14 billion crop in the 1st week of May, however there are always weather scares due to hot and dry temperatures which send prices sharply higher as the true heat does not arrive until June and July but I do think prices look weak and are headed lower. There could be a possible double top on the daily chart as prices traded as high as 5.17 around 3 weeks ago today we traded at 5.15 then selling off tremendously due to the bearish report.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Cocoa Futures

Cocoa futures in the July contract are down 30 points this Friday afternoon trading around 2863 hitting a 13 week low and if you’ve been reading any of my previous blogs I am currently recommending investors to get short the cocoa market while placing your stop above 3050 risking around $1,800 per contract as my theory states the longer the consolidation the more powerful the breakout. The 13 week consolidation is a long time for prices to go nowhere and I do think you have to be short this market & follow the rules of trend following as I had been bullish cocoa several months ago but as a trader you have to be nimble and right now the chart says prices are headed lower in my opinion. Cocoa futures are trading below their 20 and 100 day moving average stating that the trend is lower and if you are uncomfortable risking 1,800 then place your stop above 3018 which is the 2 week high limiting your risk to $1,500 if the trend does change.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

There are many different theories about how long does a meaningful consolidation have to last before you enter a trade on the breakout to the up or downside? In my opinion I always want to see a consolidation that lasts at least 8 or more weeks before I would consider entering. The reason that I want a longer consolidation is to try and avoid a bunch of false breakouts such as a 10 or 15 day consolidations which happen all the time, so I am trying to put the odds in my favor by trading the breakout of at least 8 weeks or more and the longer such as a 11 or 13 week consolidation the better.

Natural Gas Futures

I had been recommending a long position in the June natural gas as prices broke down yesterday hitting a 10 day low and stopping us out of the market for a loss so sit on the sidelines and wait for better chart structure to develop. This was a disappointing trade as I thought prices were going to break above 5.00 but that did not happen so it’s time to lick your wounds and find a better trend.
TREND: MIXED
CHART STRUCTURE: SOLID

Feeder Cattle Futures

Feeder cattle futures in the August contract finished up another 150 points this week in Chicago as prices continue to hit all-time highs closing at 191.70 a pound as demand remains strong while herds are at 6 decade lows propelling prices sharply higher over the course of the last year. Prices are trading above their 20 & 100 day moving average as the trend is strong to the upside as traders are scratching their heads wondering at what price will demand start to slow down.
TREND: HIGHER
CHART STRUCTURE: OK

When Do You Add To Your Winning Trade? This has always been a very interesting question because it can create a situation of going from rags to riches or from riches to rags in a very short amount of time. Many times I see traders abuse pyramiding or adding to positions with utter lack of any type of money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse. Commodity prices can move very quickly with large gains or loses like we experienced in the 2008 crash of stock and commodity prices, so you always have to use stops and not fall in love or marry a position. In my opinion the answer to this question is add only once to the trade if that position has made you at least 2%-3% of your account balance while still having stop losses on all positions that equal 2% loss at a maximum risk. Remember your stop loses will be different on both positions because of the fact that you entered those trades at a different date and price.

There are many different theories about how long does a meaningful consolidation have to last before you enter a trade on the breakout to the up or downside? In my opinion I always want to see a consolidation that lasts at least 8 or more weeks before I would consider entering. The reason that I want a longer consolidation is to try and avoid a bunch of false breakouts such as a 10 or 15 day consolidations which happen all the time, so I am trying to put the odds in my favor by trading the breakout of at least 8 weeks or more and the longer such as a 11 or 13 week consolidation the better. At this present time cocoa is in a major consolidation.

If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

SEERY FUTURES ACCEPTS CANADIAN COMMODITY ACCOUNTS

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.

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: (800) 615-7649


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