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 this Friday afternoon after the Thanksgiving holiday are sharply lower due to the fact that crude oil prices are down nearly $5 also pressuring the precious metals to the downside as gold in the February contract is currently trading down $29 at 1,167 after settling last Friday at 1,198 as I still remain neutral in this market as prices are trading above their 20 day but still below their 100 day moving average so avoid this market at the current time. In my opinion choppy markets are difficult to trade as the longer term downtrend line in gold is still intact in my opinion as a strong U.S dollar and S&P 500 continue to take money out of gold as the money flow continues to go into those 2 sectors as I still think there’s a possible retest of 1,130 in the month of December and if you remember in 2013 December was also a negative month to the downside as the stock market in my opinion will continue to climb higher throughout the rest of the year. The chart structure in gold is poor at the current time as prices have been choppy in recent weeks so look for a better market to trade and keep an eye on this and hopefully better chart structure will develop over the course of the next several weeks but I’m feeling that we will not be involved in the gold market until at least early 2015.
TREND: MIXED
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the January contract are down $6 a barrel as OPEC announced on Thanksgiving that they will not cut production as the trade was expecting 1 million barrels to be cut sending prices to a 5 year low with the next major level of support all the way back to May 24th of the year 2010 at 67.15 and I still do believe with OPEC and Saudi Arabia definitely wanting lower prices that they will get their wish as prices remain bearish in my opinion. Crude oil futures are trading far below their 20 and 100 day moving average telling you that trend is lower and if you’re still short this market I would place my stop loss above the 10 day high which currently stands at 77.83 which is around 1000 points or $10,000 risk per contract plus slippage and commission as the chart structure now has turned terrible. The chart structure before today’s activity was very solid as the 10 day high was very close to where prices were trading, however when you move $5 lower in one day that’s what’s going to happen. If you’re not short this market I would sit on the sidelines because I think the risk is too high but definitely do not try and pick a bottom because who knows how low prices can actually go. The U.S dollar continues its bullish momentum up another 60 points today also contributing to a weaker energy market as the world is awash with energy supplies at the current time and you have to remember in 2008 prices traded around $35 a barrel and that was with a weak U.S dollar so prices still can head lower.
TREND: LOWER
CHART STRUCTURE: TERRIBLE

Silver Futures

Silver futures are trading below their 20 and 100 day moving average selling off sharply this Friday afternoon down around $1.15 in the March contract currently trading at 15.45 hitting a 2 week low after settling last Friday at 16.45 down about $1.00 for the trading week as I still remain neutral in the silver market as well as choppiness has been prevalent in recent weeks. I do believe there’s a possible retest of the contract low of 15.00 in the month of December as the commodity markets still look very weak due to the fact of a strong U.S dollar and the fact that crude oil prices have been selling off in recent weeks as crude oil is a highly inflationary commodity and when you see prices continue to go south in that sector that also puts pressure on many of the other commodity sectors. Silver futures have been in a downtrend for the last 6 months, however prices were near a 3 week high before today’s action that’s why you want to make sure of the confirmation before entering as my basic rules is the market must have outstanding chart structure allowing you to place tight stop losses as well as the market must be hitting a 4 week high or a 4 week low before entering. The one positive fundamental aspect of silver is that it’s used in many electronics and the electronic world is not going away anytime soon so there should be stronger demand especially at lower prices, however at this time lower prices still seem to be ahead but I’m sitting on the sidelines in this market looking for a better trend.
TREND: MIXED
CHART STRUCTURE: SOLID

Cotton Futures

Cotton futures in the March contract are trading higher for the 3rd consecutive trading session despite the fact that many of the commodities are sharply lower today due to a strong U.S dollar as I’ve been recommending a short position in cotton for the last several weeks, however prices hit a 10 day high in today’s trade so it’s time to move on. If you took that recommendation sit on the sidelines and look for a better market that is trending currently as volatility in cotton has been relatively low in the last couple of weeks as prices have gone sideways as I’m a little disappointed in this trade especially with a very weak commodity market today, however that’s why you must have an exit strategy to try to minimize risk as best you can and have the proper amount contracts because volatility in this market will increase its just a matter of time. Traders are awaiting the next USDA crop report which comes out in a couple of weeks as that will show production numbers in the United States which should be near a record, however the situation is the supply problem as China has massive reserves and that’s what’s really been keeping a lid on this market, however I’m a technical trader and the market is currently neutral so sit on the sidelines as prices are trading above their 20 but still below their 100 day moving average telling you that the trend is mixed.
TREND: MIXED
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

Copper Futures

Copper futures in the March contract are down 1000 points hitting a new contract low currently trading at 2.8650 a pound as the chart structure in this market is absolutely terrible at the current time as I do remain bearish as prices are below their 20 & 100 day moving average as this is a real breakdown in my opinion as this market has been going sideways over the last several months but look for some type of pull back as the risk reward situation is not in your favor at the current time. The 10 day high in copper currently is at 3.075 which is over 2000 points away or around $5,000 risk as that is too much risk for my criteria so wait for some type of kick back to the upside but continue to play this to the downside and don’t try to pick a bottom which is extremely difficult to accomplish.
TREND: LOWER
CHART STRUCTURE: POOR

Sugar Futures

Sugar futures in the March contract are down 56 points this Friday afternoon in New York as the commodity markets as a whole have turned very bearish due to the fact of a stronger U.S dollar and crude oil prices hitting multiyear lows pushing sugar prices which is used as bio diesel as well hitting a 2 week low as I’ve been recommending a short position from around 15.65 while continuing to place your stop above the 10 day high which currently stands at 16.40 risking around 90 points or $1,000 per contract plus slippage and commission. The next major support level in sugar is the contract low which was hit about 3 weeks ago at 15.42 and I think there’s a chance prices will break that level come next week so continue to play this to the downside while maintaining the proper amount of contracts while also risking only 2% of your account balance on any given trade in case the trend does change but the trend in the commodities in my opinion is still to the downside. Prices double bottomed around the 15.40 level in the last 6 weeks and I think there will be more sell stops if that level is breached possibly pushing prices back down to around 14.50 a pound as the long-term downtrend stays intact so take advantage of any rallies as the stop loss will be lowered next week.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Wheat Futures

Wheat futures in the March contract are one of the few commodities that traded higher this Friday afternoon closing up around $.15 to trade around 5.78 a bushel trading higher for the 3rd consecutive session hitting a fresh 3 month high as I’ve been recommending a long position when prices broke out around 5.20 while placing your stop loss at the 10 day low which currently stands at 5.38 risking around $.40 or $2,000 per contract plus slippage and commission as the bullish trend continues in my opinion. Weather concerns are the main culprit pushing wheat prices higher as the fundamentals in wheat are not nearly as bearish as corn or soybeans as carryover levels were actually lowered as now prices have rallied $1 in the last 2 months so continue to play this to the upside and I’m impressed with today’s action because the fact that soybeans and corn were lower but wheat remained strong all day. Wheat futures are trading far above their 20 & 100 day moving average telling you that the trend is to the upside so just make sure you place the proper amount of contracts risking 2% of your account balance on any given trade as the chart structure will start to improve next week as the next major resistance in wheat as it $6 which was hit 3 times several months back and unable to penetrate.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

U.S Dollar Futures

The U.S dollar is rallying sharply this Friday afternoon currently trading at 88.42 in the December contract as I’ve been recommending a bullish position in the U.S dollar while placing your stop loss below the 10 day low which currently stands at 87.23 risking around $1,200 dollars plus commission and slippage per contract as the chart structure is outstanding at the current time. The U.S dollar is trading above its 20 & 100 day moving average telling you that the trend is to the upside as crude oil prices are down nearly $5 which is really putting pressure on several of the foreign currencies such as the Canadian dollar which is down 150 points and I still do believe we’re in a longer-term secular bull market in the U.S dollar. The European countries look to head into recession as the trend is your friend in the commodity markets so continue to play this to the upside while placing the proper stop loss while using the proper amount of contracts risking only 2% of your account balance on any given trade in case you are wrong. The strong U.S dollar is pressuring many commodity prices to the downside as the next major resistance is at 88.51 which was the most recent high hit last week and I do think prices will continue to move higher as investors feel much safer buying the U.S dollar than buying any other currency which are all seemingly in turmoil at the current time.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

S&P 500 Futures

The S&P 500 futures in the December contract are down 7 points this Friday afternoon after the Thanksgiving holiday as volatility remains low and probably will remain low for the rest of 2014 especially during the holiday season as I’ve been recommending a bullish position in the S&P while placing your stop loss below the 10 day low which currently stands at 2025 risking around 40 points or $2,000 per contract plus slippage and commission as the chart structure will start to improve dramatically on a daily basis starting next week which will allow you to tighten up your stop. The bull market in the S&P 500 continues in my opinion as the month of December historically speaking is very bullish as the last 10 years the market has gone up in the final 6 weeks of the year & it certainly looks like that’s happening again as Apple Computer is hitting record highs carrying this market on its back at the current time so continue to play this to the upside and take advantage of any dips while placing the proper stop loss. Many of the commodity markets are sharply lower today including the precious metals, energies, and soft markets as the U.S dollar continues to move higher and that’s bullish U.S economy as worldwide economies are really struggling at the current time while the U.S grew at a 3.9 GDP in the last quarter which is outstanding in my opinion so this market looks to move higher possibly breaking 2100 come Christmas time in my opinion. The S&P 500 is trading far above its 20 and 100 day moving average telling you that the trend is higher and as a trend follower you want to go with the path of least resistance in my opinion.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Do You Add To A Losing Trade?

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.