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 April contract are down $27 this afternoon in New York due to the fact of a very strong U.S monthly unemployment report pushing prices to a 3 week low as I’ve been recommending a long position in gold when prices broke above 1,245 and if you took that trade it’s time to exit today as prices are at a 3 week low as prices now are trading below their 20 but above their 100 day moving average telling you that the trend is mixed. Gold futures settled in the April contract at 1,279 while currently trading at 1,236 down about $43 for the trading week as the Dow Jones was up over 800 points this week as money is flowing out of the precious metals and into equities once again. Silver futures are also down $.50 as the U.S dollar is up a whopping 100 points this Friday putting pressure on many of the commodities once again as extreme volatility is happening throughout the commodity and stock sectors sosit on the sidelines in this market as I’m disappointed that we gave back our profits and actually ended up losing slightly on this trade but that’s what happens sometimes when you trade a system as you must stick to the rules as this market fizzled out very quickly. Gold prices have rallied from 1,130 which was around the contract low all the way above 1,300 which happened just a couple weeks ago and now has sold off about $70 as the trend is mixed and I do not like choppy markets as we probably will be sitting on the sidelines in the gold market for at least 4 to 6 weeks waiting for better chart structure to develop because the risk is too high as there is no trend as choppy markets are extremely difficult to trade.
TREND: MIXED
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the March contract settled last Friday at 17.20 while currently down $.57 this Friday afternoon in New York at 16.63 as I’ve been recommending a bullish position when prices broke above $17 an ounce and if you took that trade place your stop below the 2 week low which currently stands at 16.74 on a closing basis as it looks like we will be exiting this position as the market has fallen substantially due to the fact that the U.S dollar is up over 100 points in today’s trade. I’m a little disappointed in this trade however the recommendation was a small loser as the reason prices have fallen out of bed today was the fact of another strong U.S monthly unemployment report sending bond and precious metal sharply lower so sit on the sidelines in this market as silver has hit a 3 week low in today’s trade as prices are now trading below their 20 and 100 day moving average as the tide has turned so look for another market that is beginning a trend. Many of the commodity markets this week experienced extreme volatility and I think that will continue due to the fact that crude oil and the U.S dollar are having huge price swings on a daily basis as gold is down over $30 as well. Silver prices have dropped $1.90 in the last 3 weeks giving back all of our profits but that’s what happens sometimes as prices look to consolidate for some time to come in my opinion with the next level of support all the way down to the 15.50 level which was hit on multiple occasions over the last several months.
TREND: MIXED
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the March contract finished up around $1.50 a barrel closing around 52.00 after settling last Friday at 48.24 experiencing one of the best rallies we’ve seen it many months as prices are trading far above their 20 day moving average as I have not been able to say that in 6 months but still below their 100 day moving average which stands at $64 a barrel as I am neutral this market as I was recommending anybody who was short to place your stop at the 10 day high which was 49.20 as that stop was very beneficial as prices have rallied over $3 since that level was hit. Volatility in crude oil is absolutely astronomical with prices moving 5/7% on a daily basis so please avoid this market as the volatility and the risk is out of control at the current time so wait for better chart structure to develop allowing you to place tighter stops minimizing risk and that could take some time as I don’t see the volatility slowing down anytime soon. The U.S dollar was up 120 points today but had no effect on crude oil prices as crude is now trading right near a 4 week high, however the chart structure is terrible as the 10 day low is about a $9,000 risk from today’s price levels as that is too much risk in my opinion, however keep a close eye on this market because in a couple of days that could change as a trader I’m strictly a trend follower and if this market starts going up I will be bullish and if the market starts to go down breaking $44 I will be bearish but right now I can’t stress enough to look at other markets and avoid this market like the plague.
TREND: MIXED
CHART STRUCTURE: AWFUL

Wheat Futures

Wheat futures in the March contract are unchanged this Friday afternoon in Chicago currently trading around 5.26 a bushel trading just barely below its 20 day but still below its 100 day moving average as I’ve been recommending a short position in wheat for the last couple of months as prices settled around 5.02 last week and rallied about $.24 as extreme volatility has entered the grain complex. If you took my original recommendation place your stop above the 10 day high which in Monday’s trade will be 5.34 risking around $.08 or $400 per contract plus slippage and commission as the chart structure is outstanding at the current time as traders are keeping an eye on next week’s USDA crop report which will send even more volatility into this market. The grain market this week including corn, soybeans, and wheat all saw extreme volatility throughout the week and I think that’s going to continue as the commodity markets in general are seeing huge price swings due to the fact that the U.S dollar also is having huge price swings so maintain the proper stop loss as we could possibly be stopped out next week and if we are stopped out sit on the sidelines and wait for another trend to develop as a possible double bottom around 4.90 may have occurred but I’m sticking to the rules and keeping my stop at the proper level while hoping that Monday’s trade turns negative once again.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

Orange Juice Futures

Orange juice futures in the March contract are trading below their 20 and 100 day moving average telling you that the trend is to the downside after settling last Friday at 140 currently down 200 points this Friday trading at 135.70 as I’ve been recommending a short position & if you took that trade place your stop at the 10 day high which in Monday’s trade will be 144.50 risking 900 points or $1,350 per contract plus slippage and commission. The next major level of support is at the 133 area and if that level is broken I think prices could retest the contract low of 126 as the frost possibility in the state of Florida is very remote at this current time so prices are starting to melt away so continue to play this to the downside taking advantage of any rallies while maintaining the proper stop loss as I remain bearish. The chart structure will start to improve next week and in Tuesday’s trade the 10 day high will be 142.60 as the volatility is relatively low in orange juice at the current time but I do expect the next USDA crop report which comes out next week to show bearish fundamentals and as a trend follower trading with the path of least resistance is more successful in my opinion than counter trend trading.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Oat Futures

Oat futures in the March contract were down about $.04 this afternoon in Chicago closing around 2.84 a bushel as I’ve been recommending a short position in oats when prices cracked $3 a bushel and if you took that original recommendation place your stop loss above the 10 day high which currently stands at 2.92 risking around $.08 or $400 per contract plus slippage and commission as the chart structure is outstanding at the current time as massive volatility has hit this market with a low being created at 2.62 and a high around 2.91 with almost a 30 cent trading range. Oats settled last Friday at 2.75 up about $.09 for the trading week as Tuesday’s trade was the 2nd worst day that ever happened in my entire 20 year career as I am short the majority of the commodity markets and it all kicked me in the face with limit up moves in corn and sharply higher soybean prices as I felt like walking off the plank, however that’s why I continue to use risk parameters as my risk parameter is the 10 day high so continue to remain short this market while placing the proper stop loss. The oat market is generally less volatile compared to corn, soybeans, but that oats are a commodity and all commodities can become extremely volatile due to weather situations especially in Canada where the majority of oats are grown , however the chart structure is outstanding at the current time and if you have not participated in this market I’m still recommending a short position as the risk/reward meets criteria and that’s all I look for it as a trader while also trading with the trend as prices are still trading below their 20 and 100 day moving average still right near 2 ½ year lows.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

Corn Futures

Corn futures in the March contract are trading above their 20 and 100 day moving average as volatility this week exploded after settling last Friday at 3.70 a bushel while going out today around 3.85 up $.15 for the trading week as I’ve been recommending a short position for quite some time and if you took that trade place your stop above the 10 day high which currently stands at 3.90 risking around $.05 or $250 per contract from today’s price levels plus slippage and commission. Traders are keeping a close eye on next week’s USDA crop report which will show carryover levels and an estimation of acres which should be around 88 million which is down about 3 million acres from 2014 as I’m starting to think this market is going to be choppy until spring planting arrives but I will continue to place my stop at the proper level as the risk/reward meets criteria and is still in your favor as this was one of the most volatile weeks I can remember. I had one of my worst trading days of my entire career on Tuesday when corn prices were up $.18 and soybean prices were up $.40 at one point as the trend currently is mixed. Corn prices have rallied due to the fact that crude oil prices have rallied substantially from their lows and that’s bullish corn prices which is an ethanol product as large hedge funds still own around 200,000 contracts which is very surprising because if you read any of my previous blogs I said that was a special situation if prices close under 3.77 which they did trading as low as 3.67 but they came right back up once as crude oil rallied sharply so if we are stopped out of this trade next week sit on the sidelines and look for another trade that’s beginning to trend.
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

Sugar Futures

Sugar futures in the March contract settled last Friday at 14.79 currently trading at 14.54 down about 25 points for the trading week after retesting 5 year lows around the $14 level only to rally due to the fact that crude oil prices have rallied substantially from their contract lows pushing up sugar prices which is a bio diesel. On the daily chart there is a possible double bottom around 14.00 as this market has been choppy and I been sitting on the sidelines waiting for a better trend to develop as large worldwide supplies continue to pressure prices as rain has also entered key areas in Brazil as another large crop should be produced in the coming months. Sugar prices are trading below their 20 and 100 day moving average telling you that the trend is to the downside, however unless prices break 14.00 I will sit on the sidelines and wait for better chart structure to develop. Sugar futures are still consolidating after their recent decline that happened over the last several months as we have been trading between 14 – 16 over the last 6 or so weeks as a trend will start to develop as I’m keeping an eye on the 14.00 level to initiate a new short position so keep a close eye on this market as this could happen on any given day.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Cotton Futures

Cotton Futures in the March contract settled at 59.36 last Friday in New York while settling today around 61.60 up around 245 points for the trading week as prices are trading above their 20 and 100 day moving average as I was recommending a short position earlier in the week getting stopped out at the 10 day high which was at 60.30 as we are currently trading around 61.60 as I’m sitting on the sidelines as the last 2 breakouts were false meaning they both have been losing trades as the commodity markets are experiencing extreme volatility at this time as I’m trying to be as conservative as possible at the currently. Traders are awaiting the next USDA crop report which comes out next week as prices hit a 4 week high, however the chart structure is terrible at the current time and does not meet my criteria so keep an eye on cotton as we probably will not be trading this market for some time to come as the commodity markets are looking like they are starting to bottom due to the fact that crude oil was up over $3 this week and the stock market continues its torrid pace to the upside as all trends come to an end eventually but sit on the sidelines and wait for another trend to develop at this time as I don’t see any trends to enter so we might be pretty neutral for the next couple of weeks. The U.S dollar was up 115 points today putting some pressure on many commodities today as I still do believe that the U.S dollar is in a long-term bullish secular trend however I will be sitting on the sidelines waiting for a true breakout to occur as the trade has to meet criteria.
TREND: HIGHER
CHART STRUCTURE: POOR

Coffee Futures

Coffee futures in the March contract settled last Friday around 162 while currently trading at 168.00 up 325 points this Friday afternoon up over 600 points for the trading week as this market is now pushing up against the 2 week resistance level as I’ve been sitting on the sidelines as I remain neutral in this market and I’m still recommending a short position if prices do break 159 then place your stop above the 10 day high as this market is currently consolidating. The weather in Brazil has been ideal for key coffee growing regions as I do not think a drought will develop in the next several weeks as I think harvest pressure will start to push prices lower down the road however, I’m a trend follower and there is no trend in this market as coffee is trading right at its 20 day but still below its 100 day moving average telling you that the trend is mixed so look for another market that is beginning a trend in one direction or another. Coffee prices sold off from 230 in early October all the way down to 160 earlier in the week but unable to close below the 160 level as that’s major support as the chart structure is starting to improve dramatically so keep an eye on this market as there could be a short position in the coming weeks. Many of the commodity markets have shown extreme volatility in recent weeks however coffee has been relatively subdued as coffee is one of the wildest commodities historically speaking as I don’t see low volatility in this market for much longer so make sure you under trade and use the proper amount of contracts risking 2% of your account balance on any given trade.
TREND: MIXED
CHART STRUCTURE: IMPROVING

When Do You Enter A Trade?

What are your rules to initiate a trade on the long or short side of the commodity market? I have been asked this question many times throughout my career and my opinion is simply to buy on a 20-25 day high breakout in price on a closing basis only or sell on a 20-25 day low breakout to the downside also on a closing basis. Many times the price will break the 25 day high and sell off later in the day only to have your trade be negative very quickly.

I would rather buy the commodity at a higher price on the close because that gives me more confidence that the market has truly broken out. However there are more ways to skin a cat and this is not the only answer because some other trading systems might rely on different breakout rules that have also been reliable.

Remember always keeping a 1%-2% risk loss on any given trade therefore minimizing risks because the entry system I use always goes with the trend because I have learned over the course of time the trend is truly your friend in the long run. I also look for tight chart structure meaning a tight trading range over a period of time with relatively low volatility. I try to stay away from a crazy market that hit a 25 day high in 2 trading sessions versus the 25 high that actually took 25 days to create.