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 December contract settled in New York last Friday at 1,112 an ounce while currently trading at 1,157 up about $45 for the trading week on massive concerns of global slowdowns pushing stock prices to a 7 month low therefore putting money back into the precious metals as I’m currently sitting on the sidelines in this market getting stopped out around 1,105 or 10 day high around 10 days ago as Monday’s trade certainly will be interesting in my opinion. The chart structure is extremely poor at the current time as we’ve had about an $80 rally from recent lows as prices traded as high as 1,168 earlier in the trading session but this market concerns me due to the fact that many of the commodity markets are headed lower as this is just a flight to quality here in the short term in my opinion. Gold futures are trading above their 20 and 100 day moving average for the first time in several months as it looks to me that prices might head up to the $1,200 level but I have a hard time believing that gold will rally as demand from China and India at the current time are weak so look at other markets that are beginning to trend as I went through this before especially in 2008 when stock and commodity markets kept going down including gold as everybody had to sell everything because of margin calls and liquidity issues so keep a close eye on this market but at this time continue to look at other markets to sell which has been shooting fish in a barrel over the last 6 weeks.
TREND: HIGHER
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the December contract are trading above their 20 but below their 100 day moving average telling you that the trend is mixed as I’m currently sitting on the sidelines as prices hit a four week high this Friday afternoon trading as high as 15.71 after settling in New York at 15.26 while currently trading at 15.26 in an extremely volatile trading week finishing unchanged practically. The chart structure in silver at the current time is very poor as it is in gold as well as silver prices may have bottomed in the short-term around 14.50 as money is flowing out the S&P 500 which hit a 7 month low today and into the precious metals, however profit-taking ensued in silver sending prices lower as I see no reason to own silver or the rest of the commodity markets which continue to go lower in my opinion. I am a trend follower and the trend right now is mixed but I’m itching to sell this market once again and if you are option player look at some puts close to the money as I still think there’s a possibility that silver prices could trade much lower later in 2015 as there’s very little demand for the commodity as China is in a complete mess and its suddenly affecting the rest of the world as everybody is devaluating its currencies but wait for better chart structure to develop therefore lowering monetary risk.
TREND: LOWER
CHART STRUCTURE: TERRIBLE

Crude Oil Futures

Crude oil futures in the October contract settled last Friday in New York at 43.11 a barrel while currently trading at 41.00 continuing its bearish momentum hitting a 6 ½ year low as I’ve been recommending a short position from $59 as we have now rolled over three times as we are now currently in the October contract as we started in July contract as prices still have not hit a 10 day high which currently stands at 46.00. The chart structure will start to improve on a daily basis starting next week as prices are trading far below their 20 and 100 day moving average telling you that the trend is to the downside as the commodity markets continue to look weak as heating oil and gasoline prices continue to hit new lows as well as who knows how low prices could actually go, however if you have missed the original recommendation sit on the sidelines as you do not want to chase markets as you have missed the boat in my opinion. The stock market has hit a 7 month low which is also putting pressure on commodity markets as everything looks weak in my opinion so continue to place the proper stop loss as worldwide supplies are overwhelming at the current time coupled with the fact of a relatively strong U.S dollar as there is very little bullish fundamental news except for possible shortcoming to push prices up here in the short-term as this trade has been tremendous over the last three months.
TREND: LOWER
CHART STRUCTURE: IMPROVING

S&P 500 Futures

The S&P 500 in the September contract is trading below its 20 and 100 day moving average for the first time in several months hitting a 7 month low settling last Friday in Chicago at 2089 while currently trading at 2001 down 88 points for the trading week as I’ve been recommending a short position from 2080 and if you took that trade place your stop loss above the 10 day high which currently stands at 2103 as the chart structure which once was excellent is now terrible. If you have missed the original recommendation do not chase this market as the risk/reward is not the favor at the current time so look at other markets that are beginning to trend as the energy sector is pulling down the Dow Jones and the S&P 500 rather dramatically in the last couple of days as the commodity markets are showing real worldwide weakness as I will continue to remain short while taking advantage of any price rally. As I’ve talked about in many previous blogs I hate selling the S&P 500 and I’ve only done it 2 times in the last 10 years but the risk/reward was highly in your favor so I took a shot and who knows how low prices can go as we are still only 5% from the record high as I think the next major resistance level is at 1950 which could be hit next week as volatility is extremely high with major risk at the current time.
TREND: LOWER
CHART STRUCTURE: TERRIBLE

Live Cattle Futures

Live cattle futures in the December contract settled last Friday in Chicago at 148.92 while currently trading at 146 retesting recent lows as I’ve been neutral in this market but now it certainly looks like prices will head lower joining the rest of the commodity markets, however the chart structure at the current time is poor so I’m going to wait for some type of rally which could be possibly in Monday’s trade to put on a new short position. The long-term down trend line is still intact in my opinion as prices now are trading below their 20 and 100 day moving average as I’ve talked about in many previous blogs as prices have remained very strong compared to the rest of the commodity markets but now it’s time to join the party and go substantially lower as I’m certainly not recommending any type bullish position as I do think a possible break of 140 is in the cards in the next couple of weeks but I just want to lower monetary risk. When I decide to enter into a trade I always think about what the risk is and right now the risk is a little too high for my blood so I want to wait for a couple of days off of the calendar so the 10 day high will be lowered but I certainly think prices are headed lower as feeder cattle prices are down 450 points around 199 and that is leading the complex lower.
TREND: LOWER
CHART STRUCTURE: POOR

Lean Hog Futures

Lean hog prices are trading below their 20 and 100 day moving average settling in Chicago last Friday at 61.97 while currently trading at 59.35 lower once again as I was recommending a short position in this market for a long time, however I’ve been sitting on the sidelines in this market as prices have been choppy over the last four weeks with major support at 59 and major resistance at 63 as I still looks weak in my opinion as lower prices are ahead but I will wait for a true breakout to occur before entering. Originally I sold the December contract around the 69 level getting stopped out around 62 as I’ve been watching this market very closely as expansion is occurring right before our eyes which means massive supplies are ahead in the coming months so now I’m even looking at the April contract in 2016 so keep a close eye on this market as I do think lower prices are ahead in the commodities as a whole as the world is awash in supplies coupled with no demand.
TREND: LOWER
CHART STRUCTURE:SOLID

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 October contract settled last Friday in New York at 10.68 a pound while currently trading at 10.56 trading slightly lower for the trading week on very low volatility as I have been recommending a short position from 11.50 and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 10.93 risking around 37 points or $400 per contract plus slippage and commission from today’s price levels. Sugar futures are trading far below their 20 and 100 day moving average telling you that the trend is to the downside as the daily chart structure is excellent allowing a tight monetary stop therefore lowering risk as a weak Brazilian Real continues to put pressure on prices coupled with the fact that crude oil has hit a six year low which is also a negative influence on sugar prices as sugar is also used as a biodiesel so continue to play this to the downside in my opinion. The next major level of support is 10.40 and if that is broken I think we could break 10.00 a pound possibly next week as I see no reason to own any commodity at the current time as worldwide deflation currently exists.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Cocoa Futures

Cocoa futures settled last Friday in New York at 3061 while currently trading at 3073 ending down on a sour note this Friday afternoon lower by 60 points as I’ve been recommending a short position over the last several weeks as we rolled over from the September contract to the December contract and if you took the original trade continue to place your stop loss above the 10 day high which currently stands at 3164 as the chart structure is outstanding at the current time and will tighten up early next week. Dryness in Ghana sent prices higher earlier in the week coupled with short covering; however the commodity markets and stock markets around the world look extremely weak as prices are still trading below their 20 but barely above their 100 day moving average as I remain short while taking advantage of any price rally while placing the proper stop loss. The next major level of support is 3050 and if that is broken in my opinion the bear market could get ugly to the downside as I do see prices filling price gap around 2800 in the coming weeks so continue to remain short as the trend is your friend in the commodity markets and all of the trends except gold at the current time are lower.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Coffee Futures

Coffee futures in the December contract settled last Friday in New York at 141.15 a pound while currently trading at 132.50 in a highly volatile last couple of weeks as prices are trading right at their 20 but still below their 100 day moving average telling you that the trend is mixed at the current time. I’m currently sitting on the sidelines in this market as I was recommending a short position several weeks ago getting stopped out at the 10 day high which at the time was at 128 as the chart structure is very poor currently so I will be sitting on the sidelines for some time as prices did hit a 6 week high last Friday but unable to hold those levels due to the fact of a weak Brazilian Real and weak commodity prices throughout the world. Volatility in coffee is extremely high as coffee historically speaking is one of the most volatile commodities, but I do not like trading choppy markets and at the current time this market is very choppy so I will wait for tighter chart structure to develop therefore lowering monetary risk with the next major level of support around the contract low of 120 as the soft commodities still look very weak as I’m currently recommending a short position in sugar and cocoa.
TREND: MIXED
CHART STRUCTURE: POOR

Cotton Futures

Cotton futures in the December contract are now trading above their 20 and 100 day moving average and have rallied 9% since August 12th as the USDA shocked investors stating that the crop was reduced by 10% in the United States closing at its highest level since July 6th as I was recommending a short position getting stopped out around 65.50 level as I’m currently sitting on the sidelines waiting for better chart structure to develop. If you have been reading any of my previous blogs you understand how bearish I am on the commodity markets, however sometimes reports can throw a wrench into the closet and that’s exactly what happened to this trade as major resistance is between 67 – 68 and if you are an option trader I would certainly be taking advantage of this rally as worldwide supplies are still massive so look at options close to the money as I still do think this is a bear market in the long run. The problem with cotton is that China holds 50% of the world reserves and certainly will be taking advantage of this recent rally to sell so there is a lid on this market in my opinion unless the next crop report comes up absolutely dismal as I’m very bearish the entire commodity market including the grain market but I’m a trend trader so I’m not recommending any type of short position in the futures market at this time.
TREND: HIGHER
CHART STRUCTURE: POOR

Trading Theory

What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? I define chart structure as a slow grinding up or down trend with low volatility and no chart gaps. Many of the great trends that develop have very good chart structure with many low percentage daily moves over a course of at least 4 weeks thus allowing you to enter a market allowing you to place a stop loss relatively close due to small moves thus reducing risk. Charts that have violent up and down swings are not considered to have solid chart structure as I like to place my stops at 10 day highs or 10 day lows and if the charts have a tight pattern that will allow the trader to minimize risk which is what trading is all about and if the chart has big swings your stop will be further away allowing the possibility of larger monetary loss.

here are many different theories about how long does a meaningful consolidation have to last before you enter a trade on the breakout? In my opinion I always want to see a consolidation that lasts at least 8 or more weeks before I would consider entering. The reason that I want a longer consolidation is to try and avoid a bunch of false breakouts such as a 10 or 15 day consolidations which happen all the time, so I am trying to put the odds in my favor by trading the breakout of at least 8 weeks or more and the longer such as a 10 or 13 week consolidation the better. The S&P 500 just broke out of a long channel.