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 March contract are trading below their 20 and 100-day moving average hitting a contract and multi-year low in Thursday’s trade before rallying this Friday currently trading at 28.10 a barrel up nearly $2 on massive short covering ending the week. Crude oil futures traded as low as 26.05 in Thursday’s trade only to rally, but this market certainly remains weak, but at the current time on sitting on the sidelines as the risk does not meet my criteria as the chart structure is very poor presently. As a trader you must think about probabilities of success and at the current time I’m only focused on the soft commodities as they have very tight chart structure with solid trends to the downside as crude oil remains choppy down these levels as the easy money to the downside has already been made in my opinion. The problem with crude oil is the fact that we have huge worldwide supplies as there is a possibility that the United States might be entering a recession due to the fact that the world has slowed down tremendously as global growth is a thing of the past in the short-term.
TREND: LOWER
CHART STRUCTURE: POOR

U.S. Dollar Futures

The U.S dollar in the March contract settled last Friday at 97.05 while currently trading at 96.12 continuing its bearish momentum as I missed this trade to the downside as I’m currently on sitting on the sidelines remaining bearish, but the chart structure and the risk/reward did not meet my criteria to enter into a short position. The dollar is trading below its 20 and 100 day moving average telling you that the short-term trend is to the downside as prices are right at a 4 month low due to the fact that the interest rates in the United States have been dropping dramatically, as lower rates mean a lower U.S dollar generally. Volatility in the dollar certainly has increased because of the stock market which is on a roller coaster ride daily sending shockwaves into currency markets as I’m looking to enter into a short position once the risk/reward is in my favor which could happen sometime next week so keep a close eye on this market as we could be entering into a new trade soon. The next major level of support is around 95.00 level and if that is broken, I think we can retest the 93 level in the coming weeks as it certainly looks to me that interest rates are even going lower as worldwide rates have turned negative in certain countries which is an amazing situation in my opinion.
TREND: LOWER
CHART STRUCTURE: POOR

Gold Futures

Gold prices experienced a wild trading week settling last Friday in New York at 1,157 an ounce while currently trading at 1,233 up around $75 for the trading week hitting a 1 year high as panic has struck the financial markets sending huge money flows into the interest rate market and precious metals. At the current time, I’m sitting on the sidelines in gold as the chart structure is terrible as the risk is huge at this point, but I’m certainly not recommending any type of bearish position as that would be countertrend so avoid this market at the present time. The S&P 500 has certainly propped up gold prices here in the short-term as gold prices are trading far above their 20 and 100 day moving average telling you that the trend is to the upside as my only recommendation in the precious metals is silver. Gold is in overbought territory in my opinion as volatility is huge at the current time as we had over a $50 rally in Thursday’s trade as I think volatility will continue to remain high as there is so much uncertainty worldwide at the present time. The U.S dollar has also entered into a bearish trend topping out around the 100 level which is a fundamental bullish indicator towards gold prices.
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

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 March contract continue to head lower despite the fact of very cold temperatures in the Midwestern part of the United States currently trading at 1.98 as I’ve been recommending a short position from around the 2.14 level and if you took that trade continue place your stop loss at the 10 day high which now stands at 2.17 as the chart structure is outstanding at the present time. Natural gas prices are trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside as the long-term now trend line is also intact so I remain short as I think there’s a possibility that we can retest the December 18th contract low around 191 as winter is almost behind us, therefore, demand could weaken even more. If you did not take the original trade wait for some type of price rally before entering, therefore, lowering risk as the 10 day high will not be lowered for another 9 days, so you’re going to have to be patient with the risk tolerance at this point. Natural gas prices are trending stronger on a weekly basis in my opinion as who knows how low prices could actually go.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

Cattle Futures

Cattle futures in the April contract settled last Friday in Chicago at 134.40 while currently trading at 130.10 down around 300 points for the trading week and remains in a highly volatile state as prices have tremendous swings on a daily basis. Cattle prices are trading below their 20 and 100-day moving average telling you that the short-term trend is to the downside as the long-term downtrend line is still intact as well as I think prices will retest the January 20th low around 127 in the coming days. At the current time on sitting on the sidelines in this market as volatility is too high therefore the risk is too high in my opinion, but I will keep a close eye looking for a short position once the chart structure improves. The commodity markets in general I think are still in trouble to the downside as a global slowdown certainly is at hand in my opinion and cattle prices are still very expensive compared to the rest of the commodity markets as I think the April cattle will have a difficult time breaking 136 here in the short-term. If you are a producer, I would certainly take advantage of any type of rally taking off some risk as prices could still head much lower throughout the year as who knows how low commodities could actually go and remember in 2008 they were still lower than they are from today’s price.
TREND: MIXED - LOWER
CHART STRUCTURE: IMPROVING

Cotton Futures

Cotton futures in the May contract settled last Friday at 60.60 while currently trading at 58.60 down about 200 points for the trading week as I have been recommending a short position in the March contract we have now rolled our position into the May contract due to expiration. If you took the original trade place your stop loss at the 10 day high which is around 62.85 as the chart structure is poor at the present time due to the fact that prices have fallen out of bed in recent days. Cotton prices are trading below their 20 and 100-day moving average telling you that the short-term trend is to the downside as the chart structure will start to improve on a daily basis starting in next Wednesday’s trade, therefore, lowering monetary risk as I still think there’s more room to run to the downside. The commodity markets in general still look very weak as shockwaves in the S&P 500 is sending uncertainty throughout the investment world which generally is not bullish commodity prices as demand weakens. Estimates of next year crop acres are 9% higher than they were in 2015 so we could produce another outstanding crop in the United States which is also keeping a lid on prices in the short-term.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in the March contract are trading below their 20 and 100-day moving average telling you that the short-term trend is to the downside as this market remains extremely choppy and has been over the last 6 months as I’m sitting on the sidelines waiting for something to develop. Coffee settled last Friday in New York at 123.20 a pound while currently trading at 115.40 down about 800 points for the trading week as the commodity markets and especially the soft commodities remain weak in my opinion. However, a breakout has not occurred at the present time. Recently there has been very little fresh fundamental news to dictate short-term price action as this is basically a technical trade, but keep an eye on this market as a breakout will occur in my opinion, so you are going to have to be patient as I do like trading the coffee market, but have not been involved for many months. As a trader you must be diversified for example sometimes the grain market or any other market might go sideways for a long period of time, so it’s tough to go to make money, however that’s why you must be diversified and look at all markets, as something is always developing, therefore, giving you a better chance of success in my opinion so keep a close eye on this market as I’m very hopeful one day we will be involved.
TREND: LOWER
CHART STRUCTURE: SOILD

Soybean Futures

Soybean futures in the May contract settled last Friday in Chicago around 8.71 a bushel while currently trading at 8.75 basically unchanged for the week as I have been recommending a short position from around 8.77 while placing your stop loss above the 10 day high which stands at 8.90 risking $.13 or $650 per contract plus slippage and commission from today’s price levels. The next major level of support is around the 8.65 level and if that is broken look out to the downside in my opinion. Soybean prices hit a 4 week low in Monday’s trade but now the risk/reward is in your favor at the current time so get short in my opinion. Soybean futures long-term downtrend line is still intact in my opinion as the chart structure will start to improve in the next couple of days, therefore lowering monetary risk, so take this trade as I do think a retest of 8.60 is in the cards. If you have been following any of my previous blog I have been short cotton for several months and at the current time the soybean market looks like the same situation as that market was 2 months ago so take a look and do your homework as prices look to go lower in my opinion. Brazil has currently harvested around 7% of their soybean crop as excellent weather conditions persist so I will continue to trade with the path of least resistance which is to the downside.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the May contract settled last Friday in New York at 13.14 a pound while currently trading at 13.12 basically unchanged for the trading week as I have been recommending a short position for several weeks and if you took the original trade we were short the March contract and now we have rolled over into the May contract while now placing your stop loss above the 10 day high which stands around 13.50 as chart structure is outstanding at the present time. Sugar prices are right near a 4 month low as one of my main reasons for selling this market was the fact of a rounding top on the daily chart taking about 3 months to occur, but as a trader, you must have patience as this paid off here in the short-term. The chart structure at the current time is outstanding as the 10 day low will not be lowered for another 7 days, so you’re going to have to be patient with the risk situation, as the next major level of support is around 12.75 and if that is broken I think we could test the contract low around 11.50 so remain short in my opinion as I still see no reason to own many of the commodities as currently I’m short cocoa, cotton, and, of course, the sugar market.
TREND: LOWER
CHART STRUCTURE: EXCELLENT