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.

Crude Oil Futures

Crude oil futures in the June contract are trading above their 20 and 100 day moving average as I’ve talked about in many previous blogs I’m sitting on the sidelines in this market but I do think prices have topped out around $62 which seems to be major resistance as prices settled last Friday at 59.37 while currently trading at 59.70 up slightly for the trading week. If you are currently long this market I would place my stop loss below the 10 day low which currently stands around 58.40 as Saudi Arabia this week stated that prices will never get to $100 again and actually said in the next decade prices could stay below $40 as the world is awash with crude oil at the current time. The U.S dollar hit a 4 month low this week and that has pushed up oil prices and many of the commodity prices as the CRB index hit a five-month high as well but I do think this rally as long in the tooth as lower prices are ahead but I’m still sitting on the sidelines waiting for better chart structure to develop.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Unleaded Gasoline Futures

Unleaded Gasoline Futures in the June contract settled last Friday at 197 a gallon currently trading at 2.05 a gallon with the next major resistance at the recent high of 2.10 as prices are still trading above their 20 and 100 day moving average as we enter the driving season which picks up gasoline demand as prices here in the Chicagoland area right around $3.00 a gallon which is still relatively expensive in my opinion. Prices rallied from 1.55 in January all the way to today’s price as crude oil prices rallied 30% during that period as well but I do think fundamental issues and over supplies have topped this market out in the short-term.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Gold Futures

Gold futures in the June contract are trading above their 20 and 100 day moving average looking to breakout after a 7 week consolidation after settling in New York last Friday at 1,189 currently trading at 1,220 rallying about $30 over the last week as the U.S dollar hit a 4 month low pushing up the precious metals and many commodity prices in general. I am currently sitting on the sidelines in this market as I’m waiting for better chart structure as the 10 day low needs to be raised before we enter, however we could be looking at possibly getting into a bullish position sometime next week as I’m certainly not recommending any type of short position as that’s countertrend at the current time. The 10 day low is over $40 away so before entering this trade I would like to see the stop loss around $25 away which could happen in week’s trade as the risk factor is my number one formula before entering into a trade so sit on the sidelines and wait for 1,225 to be broken with solid chart structure as my last two recommendations were both to the downside & both were small losers. As a trader you must have thick skin and have to forget about past winners and losers and stay with your trading system and my trading system is a trend following system as I will enter this trade on the upside without blinking twice if the trade meets criteria.
TREND: HIGHER
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the July contract are trading higher for the 4th consecutive trading session after settling last Friday in New York at 16.47 an ounce up over $1 for the trading week hitting an 11 week high, however the chart structure is extremely poor at the current time so I’m sitting on the sidelines but I’m certainly not recommending any short positions as the trend clearly is to the upside due to the U.S dollar which is down around 800 points over the last 2 months supporting prices here in the short-term. Silver futures are trading above their 20 and 100 day moving average telling you that the trend is to the upside, however the 10 day low it’s too far away to meet criteria so keep an eye on this market and take advantage of any price dips as silver certainly looks to be moving higher in my opinion. Silver prices continued to flirt with the 15.50 level and was unable to break so now prices are looking at the critical 17.50 level as major resistance and then 18.45 as conditions are overbought at the current time so look for profit-taking to ensue before entering a bullish position in my opinion. Volatility in silver has increased in the last several days as silver historically speaking is one of the most volatile commodities on a daily basis so make sure you place the proper amount of contracts risking 2% of your account balance on any given trade as the last two recommendations in silver were to the downside and both were small losses.
TREND: HIGHER
CHART STRUCTURE: POOR

Oat Futures

TREND: LOWER
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 July contract are up 19 points this Friday afternoon in New York currently trading at 13.03 a pound as I have been recommending a long position when prices hit a 9 week high earlier in the week at 13.55 and if you took that trade continue to place your stop loss below 12.41 risking around 60 points or $700 per contract plus slippage and commission at today’s price levels. The chart structure in sugar will improve dramatically over the next couple of days therefore lowering monetary risk as a weaker U.S dollar is pushing many commodity prices higher including sugar here in the short-term. Sugar prices are trading above their 20 but still below their 100 day moving average telling you that the trend currently is mixed as we traded sharply lower in Wednesdays trade as crude oil prices are down for the 2nd consecutive day also putting pressure on sugar so stick to the rules and keep the proper stop loss as volatility certainly has increased over the last several weeks.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in the July contract settled last Friday in New York at 66.16 while currently trading at 66.84 up about 70 points for the trading week still continuing its longer-term bullish trend but I’m still sitting on the sidelines at the current time as the chart structure is very poor which means that the risk is too high for me to enter into a new trade. The U.S dollar hit a four month low propping up many commodity prices also pushing the CRB Index to a 5 month high as cotton prices are trading above their 20 and 100 day moving average, however the fundamental side is bearish as supplies are very large as China and India have huge reserves which should keep a lid on prices in the short-term. Cotton prices should experience an increase in volatility as we enter the critical summer months which can produce a drought coupled with lower production because of less planted acres, however at this point in time it’s too early in the spring as the United States will not produce a record crop in 2015 but as a trader I look for risk/reward criteria and chart structure so at the current time I’m looking at other markets that are beginning to trend keeping an eye on cotton as eventually a trend will develop.
TREND: HIGHER
CHART STRUCTURE: POOR

Coffee Futures

Coffee futures in the July contract settled last Friday at 134.65 while currently trading at 138 as I’ve been recommending a short position when prices broke the 135 level and if you took the original trade continue to place your stop at 138.30 on a closing basis as we could be stopped out possibly in today’s trade. The volatility in coffee is extremely low at the current time with outstanding chart structure but if you are stopped out move on and look at other markets that are beginning to trend as I’m very surprised to see this little volatility in such a highly volatile commodity. Coffee prices have stalled out around the 130 level over the last several months as I would have to think that volatility will start to increase as we’re hanging in there by the skin of our teeth and if you did not take this trade look at other markets as well as it looks like this trend is starting to fizzle out in my opinion. When you trade the commodity markets you must accept many small losses and that’s what occurring to me over the last several weeks as the loss will be around $1,200 but percentage wise was very small and that’s what I always try to stipulate that you must make sure that you risk 2% maximum on any given trade because you will have more losers than winners over the course of time in my opinion as the object is to let your winners run and cut your losses.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Corn Futures

Corn futures in the December contract settled last Friday at 3.78 a bushel while trading at 3.82 up slightly for the trading week as I’ve been recommending a short position when prices broke 3.95 and if you took that trade continue to place your stop loss above the 10 day high which been lowered to 3.85 on a closing basis as prices traded above that level on an intraday basis risking around $.7 or $350 per contract plus slippage and commission as the chart structure is outstanding at the current time. Corn futures are trading below their 20 and 100 day moving average as the USDA announced this week that production is estimated this year in the United States at 13.6 billion bushels which is 500 million less than last year and actually lowered carryover by 100 million bushels which currently stands at 1.746 billion which is right near historical highs that’s why prices continue to move lower here in the short-term. The original reason I took this trade was the fact that the risk/reward was highly in your favor as I still believe that’s the case even at today’s price levels as I do think lower prices are ahead as excellent weather here in the Midwestern part of the United States continues to put pressure on prices as estimates of this Mondays planting report are around 90% completed which is ahead of schedule with mild temperatures as the 7-10 day forecast shows adequate rain so continue to play this to the downside in my opinion. The United States will not produce a record crop this year, however worldwide carryover levels or supply situations are extremely high coupled with the fact that the U.S dollar is about 20% higher today than it was last year so I see very little bullish fundamental news at this time.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Live Cattle Futures

Live cattle futures in the June contract experienced a wild and volatile trading week in Chicago as I was recommending a short position getting stopped out around the 152 level as prices hit a five-month high as I’m currently sitting on the sidelines as the chart structure is poor at the current time & does not meet criteria as the risk is too high. Cattle futures finished 130 lower to close around 152.50 if you are bullish this market place your stop at the 10 day low which stands at 149 risking 350 points or 1,400 dollars per contract plus slippage and commission as prices are still trading above their 20 and 100 day moving average telling you that the trend is to the upside. Cattle futures settled last Friday at 151.50 up about 100 points for the trading week with low feed costs as corn and soymeal are near recent lows coupled with tight supplies continuing to push this market right near historic highs but make sure you place the proper amount of contracts in this wild market as Thursday saw a limit up move of 300 points as the chart structure is starting to improve. Feeder cattle prices finished down about 80 points in the August contract closing around 218.10 also in an extremely volatile trading week as I’m not trading this market at the current time but this has been one of the strongest markets in 2015 as I talk to many farmers and they tell me the same thing that supplies are tight and that has kept prices relatively high especially compared to the rest of the commodity markets.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Lean Hog Futures

Lean hog futures in the June contract are down 70 points this Friday afternoon in Chicago at 83.30 hitting a 4 month high as I’ve talked about in previous blogs as I’m strictly a trend follower, however if you think prices are in overbought conditions like I believe at the current time I would recommend selling a futures position while placing your stop loss above most recent high of 85.15 as prices were slightly lower for the trading week. Hog prices last week traded higher for 10 consecutive trading sessions trading above its 20 and 100 day moving average in an impressive rally coming from around 72 to 85 rallying about 20% as expansion should start to occur in this market and if you are a hog producer I would be certainly taking advantage of this rally as I do not lean hog prices will continue to move higher as Memorial weekend is upon us and that’s usually the peak in demand season. The U.S dollar hit a four month low this week and that’s definitely supporting many commodity prices and especially hog prices in the short-term right, but I have a hard time thinking that prices could go much higher from today’s price levels especially compared to the rest of the commodity markets in general.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

What Does Risk Management Mean To You?

I generally tell people that the reason people lose money in commodities is not due to the fact that they are bad at predicting where prices are headed, however they are bad when it comes to losing trades and refusing to take a loss which results for heavy monetary losses that are difficult to come back from. For example if a customer has $100,000 account in my opinion on any given trade he or she should risk 2% – 3% of the account value meaning if you are wrong the worst-case scenario is still a $97,000 remaining balance, however what I always see is traders risking ridiculous amounts of money and instead of the 3% stop loss will risk 20% to 30% on any given trade or even higher therefore if you are wrong on two or three trades that $100,000 dollar account could dwindle down to nothing very quickly and I’ve seen it many times throughout my career. What many traders forget to realize is they might have 4 or 5 commodity positions on and if you have too many contracts on all at the same time and all of those trades go against you which is very possible the losses can add up to be staggering so what I am suggesting to you is if you have $100,000 account risk between $2,000 – $3,000 per trade so if you lose on five straight trades the worst-case scenario is that your down $15,000 and still have an $85,000 balance which is very possible to still come back from and your still in the game.