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 went out last Friday at 1,274 exploding this week settling around 1,316 up about $42 and all that activity was in Thursday’s trade as prices traded up over $40 due to the craziness that’s going on in Iraq and the fact that the entire country basically imploded in weeks after the U.S spent almost $1 trillion and 4,500 deaths Iraq is worse off today than it was 10 years ago as investors finally woke up and started buying the gold market. Gold futures are trading above their 20 and 100 day moving average hitting a two-month high and as a trend follower I have to believe that prices are going higher however at the current time I am on the sidelines due to the fact that there is terrible chart structure so I’m waiting for a better chart pattern to develop.

The problem with Iraq is the situation is not going to go away like the Syrian problem as this is going to be around for years to come and could spread into other countries and don’t forget the fact that Iran is developing a nuclear bomb which is amazing to me how no country has stopped that production and that will be a huge problem down the road as well as interesting times are back in the precious metals as volatility certainly looks like it’s going to increase to much higher levels.
TREND: HIGHER
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the September contract skyrocketed this week settling last Friday at 19.70 going out this Friday afternoon at 20.90 up over $1.20 as volatility has finally awakened the sleeping giant and as I’ve talked about for months now I have been bullish silver prices as they are far undervalued compared to the rest the commodity markets it just took time and patience to develop as prices are trading above the 20 & 100 day moving average breaking out above $20 an ounce as the next resistance is $22.

The reason for the major breakout in silver is simply because there is absolute chaos going on in Iraq as this precious metal has been going nowhere in the year 2014 as many of the other commodity markets keep surging higher including crude oil which hit $107 and the spread between silver and crude oil is historically high and I still believe silver’s way undervalued. Continue to play silver to the upside while placing your stop below the 10 day low which currently stands around $19 as the chart structure is awful at the current time but this will tighten up over the next several days as silver has been trading higher for 8 consecutive trading sessions and it’s good to see the interest come back into the precious metals.
TREND: HIGHER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the August contract finished slightly higher for the week digesting last week’s sharp gains trading at 106.45 a barrel as prices are still at yearly highs and I’m still recommending a long position in this market as I think the Iraqi problem is going to push crude oil up to last August highs of around $112 barrel and possibly even higher because this problem is going to linger for years to come. If you took my recommendation and you are long a futures contract place your stop below the 10 day low which will be on Monday’s trade around 103.40 or $3 away or $3,000 per risk as the chart structure has improved dramatically over the last week.

I have a hard time believing that with the situation going on in Iraq that oil prices can actually go lower as I think you continue to play this to the upside and if you’re lucky enough to get a pullback in price I would take advantage of it while maintaining the proper money management and using a proper stop technique.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Unleaded Gasoline Futures

Unleaded gasoline futures in the August contract continued their bullish run this week finishing up another 700 points closing around 3.0930 a gallon as prices look to go higher in my opinion, however the chart structure is poor at this time as this is a very large contract which should only be traded with a very large account, but in my opinion I do believe higher prices are ahead as Iraq will become a total nightmare in my opinion. The next level of resistance is around 3.20 and if prices break that level then look towards 3.50 as I don’t believe a top has been formed in this market especially with the summer driving season upon us.
TREND: HIGHER
CHART STRUCTURE: POOR

Soybean Futures

Soybean futures in the November contract rallied sharply on the close this Friday afternoon finishing up $.06 at 12.33 a bushel as prices finished the trading week up about $.12 still stuck in a 2 week consolidation unable to break $12 on the downside now retesting the upper end of the trading range at around 12.33 and I have been recommending a short position in soybeans for quite some time as prices really have gone nowhere and continue in a consolidation while placing your stop loss above 12.80 which is around $.50 or $2,500 away from today’s price levels.

The weather in the Midwest is outstanding; however there are concerns about flooding as 92% of the soybean crop is only planted as of last weekend pushing prices higher here in the short term but the temperatures remain mild with heavy amounts of rain still in the forecast as traders were short covering going into the weekend. Soybean futures are trading above their 20 and 100 day moving average as the trend has turned neutral to bullish in the short term but the one thing I’ve experienced in my trading career is if you get nice weather over the weekend Monday mornings can have large down days while the opposite is true as well when we had the drought in 2012 we would be 95° Saturday and Sunday and would open sharply higher that Monday as the weekend creates volatility.
TREND: MIXED
CHART STRUCTURE: OUTSTANDING

Wheat Futures

Wheat prices finished the week basically unchanged in the December contract going out in Chicago at 6.16 a bushel still right near 4 month lows as this chart is ugly as prices are coming from 7.60 in early May all the way down to today’s levels as the Great Plains received the rain when it was much needed sending prices spiraling along with corn and I still don’t think the bear market is over. If you are short this market I would place my stop above the 10 day high which currently stands at 6.60 risking around $.45 or $2,250 per contract as the chart remains bearish in my opinion and looking to retest the contract lows at 5.80 which happened in late January and then experienced a terrific spring rally pushing prices up nearly $1.80 in 3 months.
TREND: LOWER
CHART STRUCTURE: IMPROVING

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 finished up around 5 cents for the trading week to close around 4.52 which is right at its 20 day moving average as prices are looking to make a short term bottom on concerns of flooding throughout the Midwest as some parts of Iowa received up to 7 inches of rain and we are expected more rain over the weekend in Illinois once again tonight as short covering is taking place in my opinion as traders are taking profits from the recent slide in prices. If you are short this market I would continue to place my stop at the 2 week high which currently stands at 4.56 which is only $.5 away $250 risk per contract as I’ve seen these fake rallies before as warm and dry weather always comes back. The corn market has been decimated to the downside so today is just an excuse to have a short-term rally as prices might even go slightly higher but the crop is off to an outstanding start as all my connections in the Midwest tell me there crops are off to a good start its just prices may have fallen too quickly so early in the growing season so a consolidation may be at hand but I still believe prices are heading lower.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

Coffee Futures

Coffee futures in the September contract finished down about 100 points for the trading week but rallied sharply this Friday afternoon finishing up over 600 points to close at 175.50 a pound. Coffee futures are now trading above their 20 days but below their 100 day moving average telling you that the short term trend is mixed with major support right around the 170 level if prices close below that level we probably will head a little bit lower here in short term but I think prices are limited to the downside as we will start to see estimates of the Brazilian crop very soon as prices are down about 23% from contract highs hit just a couple of months back so I’m sticking my neck out here and trying to pick a bottom which is extremely difficult so make sure you have the proper amount of contracts minimizing your risk to 2% of the account balance in case the trend continues to go lower.
TREND: MIXED
CHART STRUCTURE: IMPROVING

S&P 500 Futures

The S&P 500 continues its remarkable bullish run hitting another all-time high this Friday currently trading at 1955 up another 4 points today and 27 points for the trading week as volatility is extremely low as the Vix or the fear index is at 7 year lows as complacency has been in this market for quite some time. I have been bullish the S&P 500 and I’m still recommending a long position in this market and if you took that recommendation many weeks back I would place my stop at the 10 day low of 1917 risking around 40 points or $2,000 per contract from today’s price levels as I think this market marches towards 2000 in the next couple of months.

The S&P 500 is trading far above its 20 and 100 day moving average as it currently has the perfect storm going its way with extremely low interest rates and the Federal Reserve determined to prop up equity prices as large U.S companies are lean and mean as they are not hiring making them more profitable while they are buying back stock and increasing dividends and this trend is going to continue for quite some time so quit being in denial as this is a great bull market which continually goes up on a daily basis as its traded higher for the 6th straight day and prices are going even higher in my opinion.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Feeder Cattle Futures

Feeder cattle futures in the August contract hit all-time highs this week trading slightly above 210 a pound before retracing this Friday afternoon closing around 206.50 and if you’ve been following any of my previous blogs I stated in yesterday’s comments that I would be taking profits if you have multiple contracts on while placing the rest of my contracts stop at the 10 day low which currently is 202 risking around 400 points or $2,000 per contract from today’s price levels as I think the its time to take something off the table because prices have had a remarkable run to the upside.

The chart structure is improving dramatically as corn prices have rallied about $.13 from their recent lows as I think the cattle market is a little long in the tooth at this time so book some profits and tighten up your stops ,however I’m still not recommending a short position in this market as prices could still move higher due to the fact that we had the lowest herds in 60 years and the fundamentals still remain strong so place the proper stop and if your stopped out sit on the sidelines and see what develops.

The one thing that makes me a little nervous is the fact that this market was very nonvolatile when prices went from 175 – 210 and now this week we had a limit up and limit down move and volatility has increased tremendously and that tells me that a possible short-term top is at hand.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Where Should You Place Your Stops?

Identifying where stops exist in the market is an important lesson to learn because placing a correct stop loss that will improve your trading tremendously over the course of time. Nobody knows for sure where stops are located, however I have learned a couple of things over my 20 year career and I have a general idea where stops are placed and why. Buy stops are generally placed above the 10 day high as well as above contract highs as the bulls generally are buying more and the short selling are getting stopped out. Sell stops are usually placed at the 10 day low as well as below contract lows which means the shorts are adding to their position and the longs are getting stopped out as they figure they are wrong. The other common places to have stops are at certain moving averages such as the 20 or 100 day moving average where traders think either the trend is turning bullish or the market is starting to break down. Placing stops to close or not at important price levels can get very frustrating because the market can stop you out and then go the direction that you thought leaving you behind and out of the market. Placing stops is one of the most important aspects of trading in my opinion.