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 settled in New York last Friday at $1,164 an ounce while currently trading at 1,156 down about 8 dollars for the trading week in a relatively nonvolatile trading session still trading below its 20 and 100 day moving average telling you that the trend is to the downside as I have been recommending a short position as of last Friday and if you took that trade place your stop loss above the 10 day high which currently stands at 1,214 risking around $2,400 per mini contract, however the chart structure will start to improve dramatically next week lowering the stop loss. The problem with gold at current time is the fact that the U.S dollar is sharply higher this week once again continuing to put pressure on the commodity markets as I don't see that trend stopping anytime soon as the next level of support is 1,130 – 1,140 & if that level is broken you would have to think that gold prices will trade below 1,100 and if you look at platinum prices they are hitting another contract low so I think gold will catch up to platinum to the downside. Many of the commodity markets continue to go lower as well with crude oil prices retesting contract lows once again also pressuring the precious metals as the trend is your friend and I continue to think that there is no reason to own gold at this time so continue to sell as well as maintaining the proper amount of contracts risking 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures in the May contract settled last Friday at 15.80 while currently trading in New York at 15.50 down about $.30 for the trading week hitting a four month low while breaking critical support at 15.55 an ounce as I’m recommending a short position in this market & if you took this trade place your stop loss above the 10 day high which was lowered to 16.58 risking around $1,100 per mini contract plus slippage and commission, however the chart structure will tighten up considerably next week. I sound like a broken record as I’m pessimistic the entire commodity market due to the fact that the U.S dollar hit a 12 year high once again as I do think prices can retest the December 1st 2014 low of 14.70 an ounce as I see no reason to own the precious metals at this time especially with higher interest rates on the horizon and an incredibly strong U.S dollar both very pessimistic fundamental indicator towards the precious metals and silver prices as a whole. Silver futures are trading below their 20 and 100 day moving average telling you that the trend is to the downside and if 14.70 is broken you can see a freefall in prices possibly down around the 12.50 level in the next 6 to 8 weeks as the trend is getting stronger on a weekly basis.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Crude Oil Futures

Crude oil futures in the April contract are trading lower for the 4th consecutive trading session hitting new contract lows at 44.98 a barrel as I’ve been recommending a short position in yesterday trade around the $48 level & if you took that trade continue place your stop loss above the 10 day high which currently stands at 52.40 risking around $7 dollars or $3,500 per mini contract plus slippage and commission. Prices in my opinion are headed sharply lower as prices are trading below their 20 and 100 day moving as prices were consolidating over the last six weeks but you’re going to have to be patient in this trade as the 10 day high will not be lowered for another five days so continue to play this to the downside taking advantage of any rallies maintaining the proper amount of contracts risking 2% of your account balance on any given trade. The U.S dollar is sharply higher again this week pushing many of the commodity markets including the S&P 500 lower which has been very resilient until recently as there seems to be a worldwide slowdown occurring as the commodity markets all look weak so continue to trade with the trend as I don’t know how low prices can go but I do think in my opinion prices are headed lower as whenever a commodity makes a new contract low that’s not a good sign if you are in a bullish position.
TREND: LOWER
CHART STRUCTURE: POOR

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

Orange Juice Futures

Orange juice futures in the May contract are lower for the 3rd consecutive trading session ending this Friday in New York at 114.10 down about 200 points for the trading week as I’ve been recommending a short position when prices broke 133 as high volatility has entered this market & if you took that trade place your stop loss which in Tuesday’s trade will be at 121 as the chart structure is outstanding at the current time. Prices are trading far below their 20 and 100 day moving average as excellent weather in the state of Florida and in key growing regions of Brazil continue to pressure prices as well as the Brazilian REAL which has collapsed in recent weeks also sending prices to another yearly low as I think there’s a high probability that prices can break 100 here in the next several weeks so continue to play this to the downside. Many of the soft commodities continue to move lower as I’m short most commodities at this time and I do think orange juice is still historically expensive especially when you consider that supplies are coming onto the market but continue to keep the proper stop loss as I think lower prices are ahead as this trade continues its steep bearish trend.
TREND: LOWER
CHART STRUCTURE: SOLID

Cotton Futures

Cotton futures in the May contract settled last Friday at 62.97 while currently trading in New York at 61.00 down about 200 points for the trading week as I’ve been advising traders to sit on the sidelines as the chart structure is very poor at the current time as prices are still trading below their 20 and 100 day moving average as I think prices will remain choppy until spring planting occurs which is still over a month away. The U.S dollar is at 12 your high which is pressuring many of the commodity markets also coupled with the fact that there was an increase in the Chinese cotton stock estimates also pushing prices lower as traders are waiting for the planting intention report which will be out at the end of the month giving this market some new fresh fundamental news but the chart structure at the current time is poor so look at other markets that are beginning to trend as volatility certainly will enter this market in the coming months. If you have been reading any of my previous blog I am bearish the entire commodity market however I like trading with tight chart structure allowing a tight stop loss minimizing risk at 2% of your account value but this does not meet my criteria to sit on the sidelines and wait for a better chart pattern to develop in my opinion.
TREND: LOWER
CHART STRUCTURE: POOR

Wheat Futures

Wheat futures in the May contract were higher for 5 straight trading sessions before this Friday’s slight selloff down about 6 cents currently trading at $5.00 a bushel as I’ve been recommending a short position & if you took that trade place your stop above the 10 day high which in Monday’s trade will be 5.14 risking around $.14 or $700 per contract as the chart structure is outstanding at the current time. Wheat futures are trading below their 20 and 100 day moving average telling you that the trend is to the downside with the next level of major support at the contract low which was hit last week around 4.82 as I still do believe that level will be retested as the grain market as a whole is starting to roll over to the downside due to the fact of an extremely strong U.S dollar. Wheat prices settled last Friday at 4.82 finishing up about $.18 for the trading week as I think that this was a dead cat bounce as harvest pressure should start to continue to push prices lower in my opinion as the warmer weather is now here in the Midwest and the Great Plains region of the United States. If you did not take the original recommendation I would still sell at today’s price level due to the fact that the risk/reward is in your favor and the chart structure is outstanding meeting my criteria to enter a trade.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the May contract are down 40 points this Friday afternoon after settling last week at 13.44 a pound trading at 12.82 down over 60 points for the trading week as I’ve been recommending a short position when prices broke 14.37 and added to this position as I do think prices are historically high compared to the fundamental and technical situation. If you took the original recommendation place your stop loss above the 10 day high which currently stands at 13.66 risking around 80 points or $900 per contract plus slippage and commission as prices are trading far below their 20 and 100 day moving average telling you that the trend continues to the downside. The next level of support is around 12.50 which was hit in June 2010 & if that level is broken I think prices could possibly break 10.00 in the next 6 to 8 weeks as the Brazilian REAL is collapsing against the U.S dollar which is putting pressure on all commodities that are grown in Brazil , as the trend is your friend and this trend is getting stronger in my opinion so take advantage of any rallies as the chart structure is solid at the current time as prices are following crude oil which is right near contract lows once again as the U.S dollar is up another 60 points continuing its secular bullish trend.
TREND: LOWER
CHART STRUCTURE: SOLID

Japanese Yen Futures

The Japanese Yen in the March contract is currently trading at 82.53 this Friday afternoon after settling last Friday at 82.86 down about 30 points for the trading week in an extremely nonvolatile trading session as the Yen is one of the most volatile commodities consistently year in and year out, however volatility is extremely low at the current time as this sleeping giant will wake up one day .Prices are trading below their 20 and 100 day moving average as I’ve been recommending a short position for the last two months and if you took this trade place your stop above the 10 day high which currently stands at 83.78 risking around 120 points or $1,500 per contract plus slippage and commission as the next level of support is the contract low around 82.00 and if that is broken on a closing basis I think prices will trade underneath 80.00 as the U.S dollar is hitting a 12 year high once again today. The chart structure in the Yen at the current time is outstanding with very little volatility so if you have missed this trade I would still recommend it even at today’s price level as I still do think lower prices are ahead as the Japanese government continues their aggressive quantitative easing program which should continue to pressure the Japanese Yen here in the short-term.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in the May contract continued their bearish trend as prices are trading far below their 20 & 100 day moving average settling last Friday in New York at 140 while currently trading at 129 down 1100 points for the trading week as I’ve been recommending a short position when prices cracked the 160 level & if you took that trade the chart structure is outstanding at the current time allowing you to place your stop loss at the 10 day high at 142 risking around 1300 points or $4,500 per contract plus slippage and commission. The main reason why prices have fallen out of bed in recent weeks is excellent weather conditions in Brazil also coupled with the fact that the Brazilian REAL has absolutely collapsed in recent weeks which is putting pressure on all commodities grown in Brazil and I think that will continue in the short-term so continue to play this to the downside, however if you have missed this trade sit on the sidelines and look at another market that’s currently starting to trend. The soft commodities as a whole have absolutely fallen out of bed in recent weeks & if you have been following any of my previous blog I’m currently short orange juice, coffee, and sugar and I do think lower prices are ahead so make sure you stick to the rules placing the proper stop loss.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Lean Hog Futures

Lean hog futures in the June contract settled last Friday in Chicago at 80.05 while going out this Friday afternoon at 75.00 down over 500 points for the trading week as I’m now recommending a short position when prices hit the contract low in Wednesday’s trade around the 77 level and if you took that trade the chart structure is awful at the current time place so your stop at 84.20 risking 920 points or $3,700 per contract plus slippage and commission. I’ve talked about the hog market to the downside for many months as expansion is what is causing prices to go lower as supply is going to become overwhelming in my opinion and if you took the original trade the chart structure will start to tighten up in Monday’s trade and will drop on a daily basis so the risk will be reduced in the next couple of days as the commodity markets still look extremely vulnerable to the downside due to the fact that the U.S dollar continues to surge higher once again today closing right underneath the critical 100 level. Hog prices are trading far below their 20 and 100 day moving average trading lower for the 6th consecutive trading session as I do believe prices could drop substantially even at today’s depressed price levels and if you are a hog producer I can’t stress enough that I do believe that you need to start hedging if you have not done so already.
TREND: LOWER
CHART STRUCTURE: AWFUL

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.