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 last Friday at 1,159 while currently trading at 1,133 in a wild and volatile trading week as I’ve been sitting on the sidelines as the chart structure is terrible at the current time as the risk/reward is not your favor so look at other markets. Gold futures are trading above their 20 but still below their 100 day moving average rallying about $90 from their monthly low around 1,080 up to 1,170 in Monday’s trade as the stock market has sent shockwaves throughout the commodities and especially in gold. This market remains extremely choppy as I like trading markets with very tight chart structure as this will take some time to develop so keep an eye on this market but there is no recommendation at this time. The problem with gold was the fact that the stock market was down dramatically in Monday’s trade but gold was unable to rally as over the course of time as I still see no reason to own gold but there is no trend and as a trend follower I will stick to my rules and look at other markets that are starting to develop.
TREND: MIXED
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the December contract settled last Friday at 15.34 an ounce while currently trading at 14.53 down about $.80 for the trading week continuing its bearish momentum and traded slightly below $14 for the first time in 6 years. I am currently sitting on the sidelines as the chart structure is very poor as the 10 day high currently stands at 15.77 as the risk/reward is not in your favor, however I remain bearish so I want to keep a close eye on this as the chart structure will start to improve later next week therefore lowering monetary risk. Silver futures are trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside as volatility is very high as many commodities have rallied this week as silver and gold have followed the footsteps of crude oil which was up about $8 for the trading week as the commodity washout may have stalled for the time being. In my opinion take advantage of any sharp spike up in silver prices near the $15 level to enter into a short position as the trend is your friend when you trade the commodity markets but make sure you risk 2% of your account balance on any given trade so avoid this market at the current time but we could be entering a short position later next week.
TREND: LOWER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the October contract settled last Friday in New York at 40.45 a barrel while currently trading at 45.00 sharply higher for the trading week as a hurricane is entering the Gulf of Mexico sending prices sharply higher as I have been recommending a short position from 59 over the last three months getting stopped out in today’s trade as everything comes to an end as this market has bottomed in the short-term so sit on the sidelines and look at other markets that are beginning to trend. Many investors are running for the hills today as a relief rally has occurred in many of the commodity markets, however I’m still not bullish, but I’m not recommending any type of bullish position in this market at the current time as the chart structure is extremely poor and the risk is too high currently. Political tensions with Yemen have also set prices higher but I truly believe this was just massive short covering as many of the funds have been short over many months and exited in today’s trade pushing prices higher but we will have to take a look if the open interest is declining or rising but in my opinion I think we will see the open interest decline which means short covering occurred.
TREND: MIXED
CHART STRUCTURE: POOR

Live Cattle Futures

Live cattle futures in the December contract are higher by 90 points trading higher for the 2nd consecutive trading session currently at 146.70 after settling last Friday in Chicago at 146.07 in an extremely volatile trading week trade while trading as low as 142.00 in Wednesday’s trade. I’ve been sitting on the sidelines in cattle but now I’m looking at entering a short position at 146.00 in the December contract and if you are executed on that trade place your stop loss above the 10 day high which stands 149.80 risking about 380 points or $1,500 plus slippage and commission. The chart structure will start to improve later next week as the risk will start to be lowered which is always a good thing in my opinion as prices are still trading below their 20 and 100 day moving average telling you that the trend is to the downside as many commodity prices hit new lows this week only to rally substantially in the last several days as the stock market has recovered tremendously but sent shockwaves in the commodity markets earlier this week. I was stopped out of many short positions this week as everything goes comes to an end but I still think the short-term and long-term trend at this point is to the downside as it’s too expensive compared to the other commodities in my opinion so play this to the downside.
TREND: LOWER
CHART STRUCTURE: IMPROVING

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

Corn Futures

Corn futures in the December contract settled last Friday in Chicago at 3.77 while currently trading at 3.74 a bushel still trading below its 20 and 100 day moving averages on relatively low volatility except in Monday’s trade where we traded down to 3.65 as traders are awaiting the next USDA crop report which will be released in the 2nd week of September. I have been recommending a short position in corn and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 3.87 as that stop will not be moved so you’re going to have to be patient risking $.12 or $600 from today’s price levels plus slippage and commission. The chart structure in corn is outstanding at the current time with major support between $3.60 – $3.65 and if that is broken I think the bear market will continue especially with harvest around the corner, but if we are stopped out move on and look at other markets that are starting to trend. Corn prices have been going sideways ever since the last USDA report sent corn spiraling as prices have recovered some of those steep losses but investors are awaiting some fresh fundamental news to dictate short-term prices which will be estimates on production which will start coming out on a weekly basis.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Cocoa Futures

Cocoa futures in the December contract settled last Friday at 3071 while currently closing at 3112 in a wild trading week as prices remain extremely volatile as I have been recommending a short position for quite some time and if you took the original trade which was in the September contract as we rolled into the December contract continue to place your stop loss on a closing basis at 3142 as that was todays intraday high but did not settle their and actually traded as low as 3073 right on the close before settling 3 points higher on the day as I expect a lower open on Monday. Cocoa prices have had several 100 point trading ranges over the last several weeks as the chart structure is outstanding at the current time as we are just eyelash away from getting stopped out as many of the commodity markets have surged in recent days especially crude oil rallying 20% in the last two trading sessions which is remarkable but I will stick to my rules and continue to place the proper stop loss as who knows what Monday’s action will bring. Cocoa prices in Monday’s trade broke 3000 and hit a 13 week low as this trend still remains bearish in my opinion and even if you have not taken the original recommendation the risk/reward is highly in your favor at the current time as the risk is around $300 plus slippage and commission from today’s price levels.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

Coffee Futures

TREND: MIXED
CHART STRUCTURE: POOR

Soybean Futures

Soybean futures in the November contract settled last Friday in Chicago at 8.89 a bushel while currently trading around 8.85 up 6 cents this Friday afternoon in a volatile trading week as prices traded as low as 8.55 in Monday’s trade as many commodity markets rallied to end the week and especially crude oil. I’ve been recommending a short position in soybeans from around the 8.75 level and if you took that trade continue to place your stop loss above the 10 day high which will be at 9.21 still $.36 or $1,800 risk per contract plus slippage and commission from today’s price levels. Soybean futures are still trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside as harvest is right around the corner as traders are awaiting the next USDA crop report coming up in the next two weeks with estimates ranging from 3.8/3.9 billion bushels as there is very little bullish fundamental news to dictate prices higher in my opinion except for short covering. The chart structure will start to improve on a daily basis starting next week so be patient with this trade as I still think an excellent crop will be produced this year sending prices lower throughout harvest season as worldwide supplies are still very ample so continue to play this to the downside while maintaining the 2% risk management rule.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Trading Theory

What Is Your Definition Of Adding To A Losing Position?

My rule for adding to a losing trade differs from mainstream thinking because for this reason that if you buy soybeans and the trade goes against you adding to this trade would be adding to a loser, which is correct. However many traders won’t add to the soybean long position but they will buy gold or some other commodity without getting out of soybeans first. My rule states that if you have a losing long position and want to get long another market you must exit the soybeans before you enter a long position otherwise you are adding to a loser. Remember many commodities trend in the same direction so if you have a losing long gold position and now you’re buying silver you are basically doubling down which is a bad money management technique and this also applies to adding to short positions as well. Remember try and keep a balanced portfolio of longs and shorts so you never get top heavy on one side of the market.