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 1,183 an ounce while currently trading at 1,161 down over $20 for the trading week despite the fact that China cut their interest rates by 25% and the ECB announced yesterday to add more stimulus in silver which is generally bullish gold prices are just the opposite is happening is the U.S dollar is up 200 points in the last two trading days putting pressure on many commodities. Gold prices are still trading above their 20 and 100 day moving average telling you that the short-term trend is to the upside, however all of the interest is back in the S&P 500 which is up over 60 points in the last two trading days as the technology sector has caught fire once again with Amazon, Google, and Microsoft all up sharply today as money flows are going back into the equities. Gold prices were trading right near a three month high last Friday on evil across $1,200 an ounce as I’m sitting on the sidelines as the only recommendation I have on at the current time is shorter natural gas as choppy markets are extremely difficult to treat successfully in my opinion so sit on the sidelines and wait for better chart structure which will take another couple of weeks.
TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING

Crude Oil Futures

Crude oil futures in the December contract settled last Friday in New York at 47.72 while currently trading at $45.52 down over $2 for the trading week as I was recommending a bullish position at 48.70 getting stopped out in Wednesday’s trade around $45 taking a loss as now I’m sitting on the sidelines waiting for another possible trend to develop. Crude oil prices are now trading below their 20 and 100 day moving average breaking out to the upside three weeks ago when prices broke the $50 level only to fall back as China announced that they cut their interest rates by 25% hoping to spur demand for commodities and improve their economy as well, however crude oil prices remain on the defensive. As a trader I truly do believe that you must trade with the trend and the trend at the time of the recommendation was to the upside, however in my opinion I think 7 out of 10 breakouts are false and that’s why you must use a proper money management system to limit your losses as you lose more than you will win over the course of time, but it’s how you manage those losses and how you manage the winners which makes the difference. Many of the commodity markets in recent days have rallied as I do think the downside is limited in crude oil but I will wait and be patient and look at other markets that are beginning to trend.
TREND: MIXED - LOWER
CHART STRUCTURE: SOLID

Silver Futures

Silver futures in the December contract are trading above their 20 and 100 day moving average telling you that the short-term trend is higher settling in New York last Friday at 16.11 an ounce while currently trading at 15.86 down 25 cents for the trading week. The chart structure in silver is outstanding as prices have traded between 15.60—16.10 over the last two weeks and if your bullish I would buy at today’s price level placing my stop loss below the 10 day low which currently stands at 15.61 risking $.25 or $1,300 per contract plus slippage and commission. One interesting thing about silver is that the U.S dollar has rallied 200 points in the last two days; however silver has not sold off as traders are thinking that demand will start to pick up in the precious metals as stimulus continues in Europe coupled with China lowering interest rates which are generally bullish commodity prices in the long run. In my opinion silver prices bottomed out around the 14.50 level as prices tested that level on multiple occasions only to rally, but the true breakout is above 16.10 as at that level I will certainly be recommending a bullish position as the chart structure is outstanding at the current time, but if you want to jump the gun and take a chance at today’s price make sure you place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Natural Gas Futures

Natural gas futures in the December contract are trading lower for the 3rd consecutive trading session while settling in New York last Friday at 2.65 while currently trading at 2.53 down another 12 points for the trading week. I’ve been recommending a short position in the November contract from the 2.70 level rolling out of that position today and into the December contract and if you take this trade continue to place your stop loss above the 10 day high which stands at 2.77 as the chart structure will start to improve later next week therefore lowering monetary risk. Natural gas prices have hit a 3 1/2 year low as the next major level of support is at 2.17 and if that is broken I think prices can crack 2.00 as outstanding and warm weather in the Midwest part of the United States continues to put pressure on short-term prices as yesterday’s inventory report showed higher than expected supplies as there is very little bullish fundamental news to dictate prices higher. At the current time this is the only recommendation I have on as many of the markets are extremely choppy, but the trend is your friend and this trend is getting stronger to the downside on a weekly basis so continue to stay short as who knows how low prices can actually trade as prices are trading far below their 20 and 100 day moving average telling you that the trend is to the downside.
TREND: HIGHER
CHART STRUCTURE: SOLID

U.S. Dollar Futures

The U.S dollar is sharply higher for the 2nd consecutive trading session up 200 hundred points in the last two trading days hitting an eight week high up on stimulus announcements from the ECB as well as China lowering interest rates this morning sending shorts covering. The dollar is now trading above its 20 day but still below its 100 day moving average telling you that the trend is mixed as this market has been incredibly choppy over the last six months as prices were just hitting a six week low last week so avoid this market at the current time and look at other markets that are beginning to trend. The chart structure in the dollar presently is terrible as the 10 day low is 300 points away as the risk does not meet my criteria to enter into a trade so be patient and wait for better chart structure to develop which could take several more weeks, but it looks like the U.S dollar has bottomed out around the 94 level especially if the Federal Reserve starts to raise interest rates which could possibly happen in the month of December. The commodity markets have been extremely choppy over the last several months all due to the U.S dollar flip-flopping almost on a daily basis, however I’ve been trading commodities for a long time and the trends will come back it’s just a matter of time so be patient.
TREND: HIGHER
CHART STRUCTURE: TERRIBLE

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

Trading Theory

Where Should You Place Your Stops? Identifying where stops exist in the market is an important lesson to learn because placing a correct stop loss that will improve your trading tremendously over the course of time. Nobody knows for sure where stops are located, however I have learned a couple of things over my 20 year career and I have a general idea where stops are placed and why. Buy stops are generally placed above the 10 day high as well as above contract highs as the bulls generally are buying more and the short selling are getting stopped out. Sell stops are usually placed at the 10 day low as well as below contract lows which means the shorts are adding to their position and the longs are getting stopped out as they figure they are wrong. The other common places to have stops are at certain moving averages such as the 20 or 100 day moving average where traders think either the trend is turning bullish or the market is starting to break down. Placing stops to close or not at important price levels can get very frustrating because the market can stop you out and then go the direction that you thought leaving you behind and out of the market. Placing stops is one of the most important aspects of trading in my opinion.

Sugar Futures

Sugar futures in the March contract are trading higher for the 3rd consecutive trading session settling last Friday in New York at 14.27 while currently trading at 14.65 a pound continuing its bullish momentum hitting a 5 ½ month high. Sugar prices are trading far above their 20 and 100 day moving average telling you that the trend is to the upside as lower production estimates in Brazil continue to push prices higher, however I have missed this market to the upside as the chart structure was terrible meaning that the risk was too high for my criteria, but if you are long a futures contract my recommendation would be to place your stop loss at the 10 day low which currently stands at 13.69. Sugar prices were in a bear market over the last several years due to overproduction and massive worldwide supplies, however the supply/demand tables have changed quickly in this market as it certainly looks like a long-term bottom has been established so continue to play this to the upside as I’m certainly not recommending a short position as that would be counter trend trading which I think in the long run is very destructive. Sugar prices bottomed out in September around 11.50 as prices have rallied over 300 points or around 25% in an impressive rally in my opinion as the next major level of resistance is around 15.00 and if that is broken this market could be off to the races.
TREND: HIGHER
CHART STRUCTURE: SOLID

Live Cattle Futures

Live cattle futures in the December contract settled last Friday at 139.42 in Chicago while currently trading at 143.50 up about 400 points for the trading week as traders are waiting for the cattle on feed report after the closing bell which should send high volatility into this market. Cattle prices are trading above their 20 but still below their 100 day moving average as I’m sitting on the sidelines, however I am certainly not bullish at these price levels as there are two price gaps that I think will be filled around the 140 level and another one around the 134 level so if you are a producer I can’t stress this enough start selling and reduce some monetary risk. The commodity markets in general have been extremely choppy and have reversed over the last several days due to the fact that the U.S dollar is up sharply over the last two days as grains, energies, metals, and livestock markets were lower as I’m waiting for a trend to develop, but I do think prices have topped out around the 144 level so be nimble for a selling opportunity any day. The main concept that I try to get across to my readers is the concept of risk given the fact that I’m sitting on the sidelines, but if you disagree and want to short cattle just make sure that you risk 2% of your account balance on any given trade as risk is the number one concept to successful trading that many people don’t consider first and crushes them at the end.
TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING

Soybean Futures

Soybean futures in the January contract are down about 8 cents in Chicago this Friday afternoon currently trading at 8.93 a bushel after settling last week at 9.02 down about $.10 in a relatively nonvolatile trading week as I’m still sitting on the sidelines as I think soybean prices will remain stagnant in the short-term. Soybean prices are trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside as prices topped out around the 9.20 level as harvest is about 85% completed on a record pace due to the fact that we have had extremely warm and dry weather in the Midwestern part of the United States as in 2015 only about 35% was completed at this time. The U.S dollar is up 200 points in the last 2 days as that’s put pressure on soybean prices dropping around $.15 in the last two trading days right near a 2 week low. At this time I’m advising clients to avoid the soybean market and the grain market as a whole as I think prices are limited to the upside and limited to the downside. The problem with the soybean market is the fundamentals are extremely bearish as Brazil is off to another terrific start and possibly will produce 100MMTs which would be another record crop as worldwide supplies are huge at the current time coupled with the fact that the U.S is expected to plant another near record acres next year which could produce another 4 billion bushels as I see no reason to be involved in this market at the current time.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Corn Futures

Corn futures in the December contract settled last Friday at 3.77 while currently trading at 3.77 a bushel in Chicago in a nonvolatile trading week still trading below its 20 and 100 day moving average telling you that the short-term trend is to the downside hovering near a 4 week low. Corn prices topped out around the $4 level due to the fact of weak demand currently as harvest progress is in full swing as the weather here in the Midwestern part of the United States is excellent with above average temperatures over the last several weeks. If you have been following any of my previous blog I’m not involved in this market at the current time as I think prices are limited to the upside and limited to the downside as I am advising clients to look at other markets with high volatility and better potential as I think corn prices are going nowhere until the spring of 2016. The U.S dollar rallied sharply this week due to the fact that the ECB stated that they will do some stimulus possibly in the month of December, however that has not helped corn as China is not importing nearly as much corn as years past keeping a lid on prices here in the short term but the chart structure at the current time is solid but I have lost interest.
TREND: LOWER
CHART STRUCTURE: SOLID