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 in New York at 1,136 an ounce while currently trading at 1,154 trading above its 20 and 100 day moving average for the 1st time in many months as the trend has now turned to the upside, however the chart structure is very poor at the current time as the 10 day low is to for away so I’m sitting on the sidelines waiting for a tighter stop to develop. Many of the commodity markets have rallied in the last week including the energy sector & precious metals as the next major level of resistance is around 1,170 as a short-term bottom certainly looks like it’s developed, but be patient and wait for better chart structure which could take a couple more weeks as the U.S dollar continues its short-term bearish trend helping support the commodity and gold market. Gold prices have remained very choppy over the last six weeks with high volatility so if you want to trade this market place the proper amount of contracts risking 2% of your account balance on any given trade, but in my opinion this market remains choppy and is very difficult to trade successfully. Gold prices have broken their longer term downtrend line in today’s trade as higher prices look to be ahead, but as a trader I look for the risk/reward to be in your favor, however that’s not the case presently.
TREND: HIGHER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the December contract are up $1.25 a barrel currently trading at 51.25 while settling last Friday in New York at 46.00 trading higher by over $5 for the trading week hitting a 10 week high, as I’ve been recommending a long position when prices broke 48.70 if you took that trade place your stop loss below the 10 day low which currently stands at 44.45 as the risk is high on this trade and should only be taken with larger accounts. Crude oil futures are trading above their 20 day but just barely below their 100 day moving average trading higher 5 out of the last 6 trading sessions on concerns with Russia bombing Syria sending prices sharply higher this week coupled with the fact that the U.S dollar is hitting a 3 week low. Many of the commodity markets have turned higher including the precious metals and the energy sector in the last week as the tide may have turned to the upside as the chart structure will start to improve later next week therefore tightening up the stop loss as I think prices could still move higher despite the fact of overbought trading conditions at the current time. If you have been following any of my previous blogs over the last 2 years you understand I’ve been short the commodity markets, but as a trend follower you must be nimble and go with the path of least resistance as the situation has changed in my opinion.
TREND: HIGHER
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the December contract settled last Friday in New York at 15.26 an ounce while currently trading at 15.76 up $.50 for the trading week and actually crossed $16 hitting a 3 month high. Silver is now trading above its 20 and 100 day moving average as it looks like a short-term bottom is in place as the commodity markets in general look bullish in recent weeks as I have not been able to say that for at least one year as I’m sitting on the sidelines as the 10 day low is way too far away risking too much money at the present time. The volatility in silver is relatively high as there have been many 50 cent daily moves as I think that will continue as talks about the debt ceiling having problems passing once again is pushing the precious metals to the upside,as I’m looking at entering a bullish position, however I’m going to wait for some type of pullback as the risk/reward is not your favor at this time so avoid this market. Generally speaking commodity prices follow one another for example if the energy sector continues to rally you can almost be assured that the precious metals will follow and vice versa, but it would not surprise me if we take a pause as prices rallied about $1.70 from the lows to the highs in one week which is a big move to the upside so be patient as sometimes the best thing to do is not trade as I have very few positions currently that I’m recommending.
TREND: HIGHER
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

Cocoa Futures

Cocoa futures in the December contract settled last Friday in New York at 3095 while currently trading at 3065 down about 30 points for the trading week currently at major support which has been tested on many different occasions in the month of August and has traded lower 8 out of the last 9 trading sessions continuing its short-term downtrend. At the current time I am looking to enter into a short position but I need better chart structure to develop as the 10 day high is too far away as I need tighter chart structure therefore lowering monetary risk; however the situation could change in the next couple of days so keep a close eye on cocoa. If you take a look at the daily chart a possible double top may have been created up around the 3350 level so keep a close eye on this market as we might be entering a bearish position once again. The volatility is relatively high at the current time as cocoa is a large contract so make sure you place the proper amount of contracts before entering risking 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Coffee Futures

Coffee futures in the December contract settled last Friday in New York at 124.30 a pound while currently trading at 131.00 up nearly 700 points for the trading week as I’m recommending a bullish position from around the 128 level while placing your stop below the 10 day low which is at 118 as this is a very high risk trade which should only be considered with a large trading account as the chart structure will not improve until next week therefore lowering monetary risk. My last two recommendations in the coffee market were both to the downside getting stopped out taking two small losses as I think the tide has now turned to the upside, as I’m a trend follower and the trend in coffee in the short-term has turned higher in my opinion. Many of the soft commodities have rallied including sugar and now coffee as the Brazilian Real has stabilized therefore pushing up prices here in the short-term coupled with the fact that the U.S dollar has hit a three week low as the perception is that the commodity markets have bottomed. The next level of major resistance is around the 140 level which was touched in mid-August as the long-term downtrend line seems to have been broken so be patient and wait for some type of pullback if your trading a smaller account as the coffee market is a high risk trade.
TREND: HIGHER
CHART STRUCTURE: POOR

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 13.53 a pound while currently trading at 14.15 up around 65 points for the trading week trading higher 7 out of the last 8 sessions continuing its remarkable bullish run to the upside hitting a five-month high. I am kicking myself on this trade as I have missed this remarkable move to the upside as lower production in Brazil due to heavy rains and droughts in sugar growing areas throughout the world is changing the supply demand tables, as overproduction levels have been cut dramatically in the last several weeks with the next major level of resistance at the six-month high around 15.00. Sugar futures are trading far above their 20 and 100 day moving average as this trend seems to be getting stronger, but the risk is too high in my opinion as the 10 day low is too far away as I will look at other markets or be patient and wait for some type of pullback before entering a bullish position. Crude oil futures have rallied sharply in the last several weeks also helping to push up sugar prices as a long-term bottom may have been formed around the 11.50 level as this market has been bearish market for several years, however the bullish momentum is strong and I’m certainly not recommending any type of short position as that would be counter trend trading which is very dangerous in my opinion.
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.

Natural Gas Futures

Natural gas futures in the November contract are trading higher for the 6th consecutive trading session trading at 2.51 bottoming out last Friday at 2.40 as I have been recommending a short position from 2.70 as the stop loss will now be lowered in Monday’s trade as volatility is extremely low at the current time. Gas futures are trading below its 20 and 100 day moving average telling you that the trend is lower as the stop loss has been lowered to 2.67 as the chart structure is starting to turn outstanding due to the fact that prices have gone nowhere in the last six trading days consolidating the recent downdraft in prices. Crude oil prices were up $5 for the trading week as many traders confuse crude oil and natural gas thinking that they move simultaneously together but that is not the case as natural gas is a domestic product that we do not import as crude oil is imported from the Middle East so they are completely different. The next major level of support is 2.40 and if that is broken I think we can head back down to 2.20 and if you did not take the original trade I would still recommend selling it even at today’s price level as the risk/reward is highly in your favor in my opinion.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in the December contract settled last Friday in New York at 60.14 while currently trading at 62.10 as I was recommending a short position over the last several weeks getting stopped out above the 62 level in a very disappointing trade due to the fact of massive floods in South Carolina possibly damaging some of their cotton crops sending prices higher. At the current time I’m sitting on the sidelines waiting for another trend to develop as prices are now trading above their 20 but still below their 100 day moving average telling you that the trend is mixed as many of the commodity markets have moved higher in the last week because of the U.S dollar continuing its bearish short-term trend hitting a 3 week low also helping support cotton prices in the short-term. At the current time I’m certainly not recommending any type of bullish position as the fundamentals are still very poor due to the fact of massive worldwide supplies, however stock markets around the world have rallied sharply in the last week supporting all markets, but I’m still waiting for another trend to develop with solid chart structure so you might have to be patient as we might not be trading cotton for at least several more weeks in my opinion. Cotton prices created a double bottom around 59.70 as prices hit a 3 week high looking to join the party with the rest of the commodities to the upside in my opinion, but avoid this market at the current time.
TREND: MIXED
CHART STRUCTURE: IMPROVING

Corn Futures

Corn futures in the December contract settled last Friday in Chicago at 3.89 a bushel while currently trading at 3.89 unchanged for the trading week after hitting a three month high earlier in the week only to come back down on profit-taking as this market has gone nowhere in my opinion at the current time. I truly do believe that this market is limited to the upside and downside as prices have traded in a 40 cent trading range over the last 3 months so quit wasting your time and find a real market that is trending as I just don’t see any fresh fundamental news to put high volatility back into this market as we enter the nonvolatile winter seasonal months. The USDA crop report came out this afternoon basically stating nothing as corn futures are trading at their 20 and 100 day moving average telling you that there is no trend, as traders are keeping a close eye on South American production which should produce another large crop in 2016 keeping a lid on prices in my opinion as the real volatility will not develop until early spring.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 5.13 a bushel while currently trading at 5.18 in a relatively quiet trading week as I’ve been sitting on the sidelines in this market for quite some time, but if you have a bullish position my recommendation would be to place your stop at the 10 day low which currently stands at 4.98 risking around $.18 or $900 plus slippage and commission. Wheat prices traded as high as 5.31 in Wednesdays trade hitting an eight week high only to come back down on profit-taking as prices have rallied from lows around the 4.65 level 2 months ago on concerns about Ukraine’s crop but I’m looking at other markets with higher profitability potential. Wheat prices are trading above their 20 day but below their 100 day moving average telling you that the trend is mixed as the grain market as a whole I think are very flat at the current time as I’m neutral as price gains are limited. The wheat market has excellent chart structure at the current time allowing you to place a tight stop loss lowering monetary risk as traders reacted to today’s USDA crop report which was neutral trading on both sides of unchanged this Friday afternoon.
TREND: MIXED-HIGHER
CHART STRUCTURE: EXCELLENT