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 February contract are down $16 this Friday afternoon in New York currently trading at 1,192 an ounce after settling last Friday at 1,175 with huge volatile this trading week with Monday’s trade going as low as 1,140 before rallying sharply hitting a 4 week high as the volatility is as high as I’ve ever seen it due to the fact that crude oil prices have plummeted coupled with a strong U.S dollar as I’m neutral this market and I’m advising traders to sit on the sidelines and look for another market with better chart structure with less risk. Gold futures are trading above their 20 but below their 100 day moving average telling you that the trend is mixed and I do believe that gold prices will continue to head lower as money flows will continue to head into the S&P 500 which is hitting another record high today but the volatility is too high and the risk/reward at the current time is not in your favor in my opinion. The month of December in recent years has been bearish as ETF selling in the gold has put pressure on prices as investors want to take a tax break on losing trades before the end of the year and I think that will continue this year as well as I still see no reason to own gold at the current time.
TREND: MIXED
CHART STRUCTURE: AWFUL

Crude Oil Futures

Crude oil futures in the January contract had a wild trading week continuing a bearish trend after settling last Friday around 66.15 basically going out at the same price today and if you are still short this market I would continue to place my stop loss above the 10 day high which currently stands at 77.02 risking around 1100 points or $11,000 per contract plus slippage and commission as this is a high risk trade at the current time, however if you are not currently short this market I would sit on the sidelines and look for a better trade. The chart structure will start to improve dramatically starting on Monday as the risk will come down dramatically as the trend continues with gold and crude oil to the downside as the commodity markets as a whole remain bearish as the U.S dollar hit another 5 year high today so continue to play this to the downside as I think the oversupply issue worldwide will put a lid on prices here in the short term. Eastern Europe and Russia are both heading into recession while the United States economy is looking very solid as consumers will definitely benefit from lower prices at the pump which should continue to put upward pressure on the equity markets in my opinion, however with OPEC deciding last week not to cut production this market should continue to move to the downside as the chart structure has started to improve, however there is extreme volatility in this market at the current time with high risk so move on and do not try to pick a bottom as I’m not bullish crude oil prices at all.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures in the March contract are down 32 cents this afternoon in New York trading at 16.25 an ounce after settling last Friday at 15.56 rallying about 70 cents with a spike bottom in Monday’s trade at 14.15 before rallying sharply, however the downtrend is still intact in my opinion as this market is very choppy and I’m advising traders to sit on the sidelines and look for a better market with less risk and better chart structure at the current time. Silver futures are trading above their 20 day but still below their 100 day moving average as the volatility is very intense at the current time, however I still do believe with a strong U.S dollar and a weak commodity market overall I think prices will grind lower but choppy markets are very difficult to be successful in so I’m sitting on the sidelines at the current time. Silver futures have been following gold and copper lower in recent months as low volume on Monday sent prices sharply lower before rallying but I don’t put much meaning into that because it was a holiday weekend with low volume so keep an eye on this market as a trend will develop once again and I’m hoping for better chart structure in the weeks ahead. As a trader you must focus on risk/reward and at the current time with extreme volatility this situation is not suitable and does not meet criteria to trade as I want to see tight chart structure to develop which allows you to place tight stops minimizing monetary risk but at this point monetary risk is way too high for my blood.
TREND: MIXED
CHART STRUCTURE: AWFUL

Cotton Futures

Cotton futures in the March contract are trading above their 20 but still below their 100 day moving average telling you that the trend is mixed as I’m currently neutral this market as we have been trading in a tight 3 week consolidation settling last Friday in New York at 60.08 currently trading at 60.70 up slightly for the trading week as the market is awaiting next week’s USDA crop report which should send some volatility and price direction back into this market. If you believe that this market has bottomed my recommendation would be to buy a futures contract at today’s price while placing your stop loss below the contract low which is 58.70 risking around 200 points or $1,000 plus slippage and commission per contract as the chart structure is extremely tight as volatility remains very low at the current time. Many of the commodity markets are heading lower due to the fact that the U.S dollar hit a 5 year high today, however cotton prices have been weak for so long that eventually prices may have bottomed out but I’m waiting for a true breakout to occur which means I’m waiting for a 4 week high or a 4 week low to enter but if you are a bottom picker you might want to take a shot at today’s price levels as the risk reward in my opinion is in your favor.
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

Coffee Futures

Coffee futures in the March contract are trading below their 20 & 100 day moving average as I was recommending a short position earlier in the week when prices broke 185 & if you took that recommendation make sure that you place your stop loss above the 10 day high which currently stands around 197.80 risking around $6,600 per contract from today’s price levels plus commission and slippage as this is a high risk trade which should only be taken with a large trading account in my opinion. Very good weather has developed in Brazil sending prices to a 4 month low as prices settled last Friday at 187.5 while currently trading at 180.50 down about 700 points for the trading week as the trend is definitely to the downside in my opinion as the chart structure will start to improve next week lowering the stop almost on a daily basis so continue to play this to the downside taking advantage of any rallies making sure that you only risk 2% of your account balance as coffee is extremely volatile with high risk. Many of the commodity markets have been heading lower as the U.S dollar continues to surge, however coffee prices are mainly dictated by weather conditions in Brazil as it’s very difficult to have back to back droughts as I think lower prices are ahead. Coffee prices surged early in 2014 as one of the worst droughts in Brazilian history hit key coffee producing regions hard, however its very early in the growing season but the weather is definitely cooperating at this time, however that can change on a dime so make sure you place the proper stop loss in case the trend does change.
TREND: LOWER
CHART STRUCTURE: POOR

Corn Futures

Corn futures in the March contract rallied sharply this afternoon for the 2nd straight trading session in Chicago up another $.06 at 3.96 a bushel as the Argentina corn crop was reduced significantly as I’ve been recommending a short position while I’ve currently been wrong on this trade and if you took this recommendation make sure you place your stop above the most recent high of 4.03 a bushel risking around $.7 or $350 per contract plus commission and slippage as this trade has been stubborn to the upside. The grain market in general was higher today due to solid exports which continue to happen week after week due to the fact of lower prices despite the fact that the U.S dollar is hitting multi year highs as there is still insatiable demand for the grain market at least until South America produces a crop which is still several months away, but I’m sticking to my guns and staying short while placing the proper stop loss risking 2% of your account balance on any given trade as I still believe corn, sugar, and crude oil are all headed lower. Crude oil prices finished lower once again today finishing down about $.70 and I would have to think with lower crude oil prices that will have an effect on corn prices which is used as an ethanol product, however when you are wrong you must admit it and move on so at this point the trend is going against me so don’t become stubborn and move on so if you are stopped out & sit on the sidelines and look for a better market to trade with solid chart structure.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the March contract are down slightly this Friday afternoon in New York currently trading at 15.15 after settling last Friday at 15.59 down about 50 points for the trading week as I’ve been recommending a short position for several weeks in this market and if you took that recommendation I would place my stop above the 10 day high which currently is at 16.20 risking around 105 points or $1,200 per contract plus and commission. The down trend line over the last 6 months is still intact in my opinion as weak oil prices have put pressure on sugar which is used as bio diesel also coupled with the fact that the U.S dollar hit a 5 year high today. This market has very little bullish fundamental news to push prices up as oversupply problems are also keeping a lid on prices here in the short term and if prices can break 15.00 I think we can head back down around the 13.50 level which was hit in the year 2010 as the bear market continues in my opinion so continue to take advantage of any rallies while placing the proper stop loss risking 2% of your account balance on any given trade as the trend is getting stronger to the downside on a weekly basis and as long as crude oil prices continue to head lower it will be difficult for sugar to have any substantial rally in my opinion.
TREND: LOWER
CHART STRUCTURE: SOLID

Wheat Futures

Wheat futures in the March contract continued their bullish trend as prices hit 4 month highs this week settling last Friday at 5.78 while going out this Friday afternoon in Chicago around 5.94 up another $.16 as I’ve been recommending a bullish position when prices broke 5.20 a couple months ago and if you took that trade continue to place your stop loss at the 10 day low which now stands at 5.46 risking around $.50 or $2,500 per contract plus slippage and commission as I think the trend continues to move higher. The fundamental reasons which are pushing up wheat prices at the current time is a less than expected crop developing in Russia with lower carryover levels as well as the USDA report as next week will certainly send high volatility back into this market as prices now have rallied about $1.20 since the September lows as the chart structure will start to improve on a daily basis as prices are still trading far above their 20 & 100 day moving average telling you that the trend is higher despite the fact that the U.S dollar continues to move higher which is generally pessimistic grain prices, but the grain market at the current time is in a bullish trend. Volatility in the wheat market has increased tremendously in the last several days as we moved up about $.60 in the last week or so and that’s what happens during the winter months as weather conditions can affect the crop dramatically just like they it can in the summer months in the soybeans and corn so continue to play this to the upside taking advantage of any rallies while placing the proper stop loss which will be moved up next week.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

U.S Dollar Futures

The U.S dollar is hitting another contract high this Friday afternoon as the monthly unemployment number came out higher-than-expected adding over 300,000 jobs sending the Euro currency sharply lower as the U.S dollar is trading far above its 20 & 100 day moving average as I’ve been recommending a short position in the U.S dollar for quite some time while placing your stop loss at the 10 day low around 87.77 risking around 180 points or 1,800 dollars per contract from today’s price level plus commission and slippage. The U.S dollar is hitting a 5 year high just surpassing highs that were hit in 2010 as the chart structure remains outstanding and I do believe we’re in a secular bull market so continue to take advantage of any dips while placing the proper stop loss risking 2% of your account balance on any given trade as this trend seems to be getting stronger on a daily basis after settling last Friday at 88.41 currently trading at 89.40 up about another100 points for the trading week as recessions are likely in Eastern Europe and Russia while the United States economy is doing very well at the current time and improving on a month-to-month basis.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

S&P 500 Futures

The S&P 500 futures in the December contract are up 7 points this Friday afternoon as a very positive monthly unemployment number showed that we added around 320,000 new jobs with the unemployment rate at 5.8% as I’ve been recommending a long position for several weeks and if you took that trade place your stop below the 10 day low which currently stands at 2041 risking around 40 points or $2,000 on a mini contract from today’s price levels plus commission and slippage. The S&P 500 is trading far above its 20 & 100 day moving average as I do think that prices will crack 2100 by Christmas time as this is the only game in town as the U.S economy is really improving so continue to play this to the upside taking advantage of any dips as the chart structure is outstanding at the current time as over the last 10 years the last 6 weeks of the year have been higher and this year has been higher as well as Apple Computer is right near all-time highs carrying this market on its back. One main catalyst for higher stock prices is the fact that crude oil prices are sharply lower again this Friday afternoon as consumers are paying much less at the pump which will help retail sales as this market has a lot of bullish fundamentals that will keep propelling this market higher as the month of January generally is bullish as well so I do not see any type of pull back in the next several weeks as this market is one of the strongest trends to the upside of any of the commodities at the current time. Last Friday the S&P settled at 2066 rallying about 10 points for the week as volatility is relatively low as we enter the holiday season with the VIX index sometimes called the fear index which historically is very low and that tells you that there is a lot of complacency as investors do not think prices are headed lower at the current time.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Do You Over Trade Your Account?

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.