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 August contract settled last Friday at 1,252 an ounce while going out in New York today Friday the 13th at 1,274 an ounce trading higher by over $20 an ounce bucking its recent bearish trend. Currently I’m sitting on the sidelines and waiting for another trend to develop as the reason gold snap backed was in the last couple days 2 major cities in Iraq have been taken over by Al Qaeda and it’s a possibility that Baghdad is next bringing the possibility of U.S troops once again sending crude oil and the precious metals higher today. Gold is trading above its 20 day but still below 100 day moving average which stands at 1,296 so keep a close eye on this market as there’s a possibility prices may have bottomed in the short term due to the geopolitical risk. If you believe that prices have bottomed my recommendation would be to buy at today’s price while placing my stop below the recent low of 1,240 risking around $3,300 per contract in case the trend does change and if the Iraqi situation really flares up gold prices would move sharply higher in the short term just on short covering alone. The volatility in my opinion will start to increase over the next several months as it has remained low for some time now so you might want to look at put or call options because the premiums are relatively cheap.
TREND: MIXED
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures finished higher for the 5th consecutive trading session settling last Friday at 18.99 going out in today’s trade around 19.60 having one of its best weeks in quite some time as I still believe a bottom has been formed while silver prices still look cheap in my opinion especially when crude oil and many of the other commodities have been in bullish trends in 2014. Silver futures are trading above their 20 but still below their 100 day moving average which stands at 20.00 ounce as silver has outstanding chart structure currently as the breakout will occur if prices can break through May 14th high of $20 an ounce which could propel prices up to the April 10th high of 20.43 as a bottom has been formed in my opinion. Volatility in silver is extremely low at this time and if you want to get long this market but the futures markets is a little too risky look at bull call option spreads or outright call options as premiums are historically cheap and silver will wake up one day and become volatile it’s just a matter of time. As I talked about in yesterday’s blog the spread price between crude oil which hit $107 today and silver still trading around 19.60 so the price spread is extremely wide so I think silver prices are very limited to the downside and as I’ve stated in many previous blogs if you have deep pockets and you’re a patient investor you should be accumulating silver down at these price levels.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

Crude Oil Futures

Crude oil futures finished the week on a strong note up another $.50 crossing $107 a barrel after going out last Friday at 102.66 up over $4.50 for the trading week continuing its strong trend to the upside all due to the fact of chaos in the country of Iraq causing concerns about oil disruptions with the possibility of this spreading into other countries as a Civil War looks to break out soon. I’ve been recommending buying crude oil futures placing your stop below the 10 day low of 101.80 a barrel and if you took that recommendation continue to place your stop there and if you’re not in this market I would look for some type of dip to buy as I do think there’s a high possibility that prices retest last August highs around 112 barrel which took place when Syria went into a civil war but then prices dropped quickly however with economies expanding around the world and the S&P 500 right near all-time highs that tells me that there’s demand for unleaded gasoline and crude oil products so I continue to believe that prices will move higher, however at the current time prices might be over bought so look for a pull back as a buying opportunity. Crude oil futures are trading far above their 20 and 100 day moving average telling you that the trend is to the upside and as a commodity trader you should be a trend follower as that’s the path of least resistance currently.
TREND: HIGHER
CHART STRUCTURE: POOR

Soybean Futures

Soybean futures in the November contract finished up strongly in Chicago up $.09 at 12.21 a bushel after retesting recent lows of around the $12 level yesterday only to rally $.20 from yesterday’s lows as it continues to trade sideways with a choppy trend as it is very early in the growing season. Soybean futures were up around $.05 for the trading week as traders are keeping a close eye on the weather which currently is outstanding at least here in the state of Illinois, however it’s very early as we enter the hot and dry season of July as I do recommend a short position in the November soybean futures contract placing your stop above 12.80 risking around $.60 or $3,000 per contract. This week traders digested the USDA crop report which shows that we could have a 325 million bushel carryover come October that’s if we produce around 3.5 billion bushels but every day off the calendar with good weather increases the odds of an excellent crop so continue to play this to the downside as the trend is mixed currently with soybeans trading below their 20 but above their 100 day moving average.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures settled last Friday at 84.78 while going out today around the 87.00 level up over 130 points this week while now trading above its 20 but still below its 100 day moving average as excellent weather in the southern part United States has pressured prices recently except for today’s trading action as many commodities were higher. The chart structure in cotton is excellent as I’ve been recommending a short position when prices broke out below 89.87 and currently I’m placing my stop above the 10 day high at 88.60 risking around 160 points or $800 per contract as cotton may have created a double bottom but next week will tell the tale. Traders are keeping an eye on weather which should send high volatility in this market but I do think a possible retest of 84.00 will be tested here in the next couple of days and if that is broken you could see 80.00 in my opinion as a bearish trend is still intact as long as prices stay below 88.60 in the July contract.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

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 finished higher for the 2nd consecutive trading session but still finished down around $.13 this week to close out in Chicago around 4.47 a bushel as excellent weather continues to pressure prices here in short term, however prices have bottomed right near contract lows here in recent days. Corn futures are trading far below their 20 & 100 day moving average and if you took my recommendation selling the futures contract at 4.87 I would continue to place my stop at the 10 day high which currently stands at 4.60 which is only $.12 away or $600 risk per contract as the chart structure remains outstanding. So far in the growing season we have not had a weather scare which is very unusual going the entire summer without some type of spike in price due to hot dry weather, however the 10 day forecast still has very mild temperatures and adequate rain as we are 75 degrees this Friday afternoon here in Chicago and I still do remain bearish as I think the last couple of days was a reaction to severely oversold conditions but I do think the trend is to the downside.
TREND: LOWER
CHART STRUCTURE: POOR

Sugar Futures

Sugar futures rallied sharply this Friday afternoon closing up nearly 40 points finishing around 17.01 finishing slightly higher for the trading week as I’ve been recommending a short position when prices broke 17.07 while placing my stop above the 10 day high which currently stands at 17.57 risking around 47 points or $500 per contract at today’s price level. The chart structure in sugar is outstanding currently which allows you to play the market using tight stops minimizing your risk in case the trend does change and I’m still sticking with my recommendation as the trade has basically gone nowhere since the breakout occurred. If you had been following any of my previous blogs I always talk about chart structure and why it’s so important because the tighter the charts the lower the risk in my opinion because the 10 day high or the 10 day low also meets the criteria of only risking 2% on any given trade of your account balance and & sugar to the downside currently meets all criteria. Sugar futures are still trading below their 20 and 100 day moving average telling you that the trend is still lower but the bears ran for cover today as prices closed right near session highs.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

S&P 500 Futures

The S&P 500 is slightly higher this Friday afternoon however finished the week down about 16 points to close in the June contract around 1933 and I’ve been recommending a long position in the stock market and I still remain bullish however this was the 1st losing week in some time as I think prices might be taking a pause and if you took that recommendation keep placing your stop below the 2 week low which stands at 1913 as the chart structure is outstanding at the current time. The problems in Iraq with the possibility of Civil War breaking out sent the S&P sharply lower in Thursday’s trade; however I think this market will rally as INTEL hit 10 year highs today as the technology sector certainly remains in a bullish trend I just think prices were over bought so continue to buy dips in my opinion while placing your stop below the 10 day low minimizing your risk to 2% of your account balance in case the trend does change. The S&P 500 still trading above its 20 and 100 day moving average as the volatility is incredibly low with the VIX which all also known as the fear indicator is right near 8 year lows as central bank intervention is keeping interest rates so low that its sucking out all of volatility out of worldwide stock markets and looks to continue for quite some time. Remember the fact that the S&P 500 is trading around 16 times earnings which historically is not extremely high and pretty much the average so prices are not trading in a bubble.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Feeder Cattle Futures

Feeder cattle futures in the August contract are trading higher 12 out of the last 13 trading sessions up another 750 points this week currently trading at 208.05 a pound hitting all-time highs once again as corn futures are near 4 ½ month lows propelling feeder cattle prices to astronomical levels. If you been reading any of my previous blogs I remain bullish the cattle market as I think higher prices are here to stay for years to come while its extremely difficult to predict the high I continue to believe we can trade as high as 210/220 as the bull market is getting stronger on a daily basis. I highly recommend not being short cattle and trying to pick a top as cattle prices are trading far above their 20 & 2500 points above its 100 day moving average as this trend is incredibly strong and has been the strongest bull market out of all of the commodities in the last couple years due to the smallest herds in over 60 years so if your long this market continue to stay long and if your currently not involved in this market stay away and look for another market to trade as the horse has already left the barn.
TREND: HIGHER
CHART STRUCTURE: SOLID

TRADING RULES

1 — If you follow this rule you will have a chance of being successful over the course of time, if you don’t follow this rule you will be sure to lose your money quickly. This rule is simple Do Not OVERTRADE EVER for this is an easy way to lose all your capital quickly. My definition of over trading is risking too much money on any given trade, for example if you are trading a $100,000 dollar account and you place a gold trade today you should limit your loses to 2% of the account value which in this case is $2,000 which allows you to be wrong on many trades and still be around to play another day. In futures and option trading you will have losing trades that is for certain so make sure you manage those losses and move on to another trade.

2 — Trade with the short term trend, as the saying goes in futures trading the trend is your friend. Sometimes you will be a market that is trending higher and then has a false breakout to the upside and then suddenly sells off causing you a 2% loss on your equity and you say to yourself that was a bad trade and should I do something different on my next trade. If it was up to me I would continue to buy strength and sell weakness because in the long run commodity trading is about percentages of success in the long run, and if you go with the path of least resistance more often than not you will have the probabilities of success on your side. I define a trend as a commodity hitting a 20 day high or low as a trendy market, if the market is in a consolidation stay away from it and find something that is trending up or down and go in that direction remembering the money management rules of 2% maximum loss if you are wrong.

3 — This rule is extremely important and I witness it being abused constantly creating tremendous loses that are sometimes difficult to come back from. Never add to a losing position because if the position continues to go against you and now you have added even more contracts which are all losing money your account will suffer loses much more than 2% and in some case adding positions and never getting out of a losing trade has wiped peoples trading accounts down to zero because of 1 or 2 bad trades. Remember always play for another day you will have losing trades and the good traders manage losses and move on to the next possible trade.