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 April contract is now trading above its 20-day but still below its 100-day telling you that the short-term trend is mixed as I was recommending a short position getting stopped out around the $35 level taking a relatively small loss as prices are hovering right near a 4 week high. Crude oil prices settled in New York last Friday at 32.78 a barrel while currently trading at 34.75 up about $2 despite the fact of a the huge build in crude oil inventories which generally puts pressure on prices, but that may have already been factored into the price as all the bearish news is pretty much baked into the cake. Volatility in crude oil is relatively low as prices have been choppy in recent weeks as I’m now sitting on the sidelines waiting for another trend to develop as I do think the upside is limited as producers will start to produce more once higher prices arrive keeping a lid on prices once again. Crude oil is starting to enter the demand season of spring and summer as gas prices here in the city of Chicago have gone from about $1.30 to 2.00 a gallon very quickly as the summer blend pushes up prices due to a mandate for cleaner gasoline in the summer months.
TREND: MIXED
CHART STRUCTURE: SOLID

Natural Gas Futures

Natural gas futures in the April contract settled last Friday in New York at 1.79 while currently trading at 1.66 down about 13 points for the trading week going out on a positive note up 3 points this afternoon. I’ve been recommending a short position from around the 2.15 level as prices have absolutely collapsed as I’m remaining short as I still don’t think a bottom has been created. If you took this trade place your stop loss above the 10-day high which has been lowered to 1.89 as the chart structure will start to improve on a daily basis, therefore, lowering monetary risk. Natural gas prices are trading far below their 20 and 100-day moving average telling you that the short-term trend clearly, in my opinion, is to the downside as extremely warm weather in the Midwestern part of the United States continues to put pressure on prices coupled with the fact that massive oversupply issues continue to hamper this market in the short term. As I constantly stress in my blogs is that you must trade with the trend as trading with the path of least resistance is the best way to go in my opinion and if you look at the natural gas chart it literally has traded lower every single day as who knows where the bottom is so definitely do not buy this market despite the fact that many of the commodities look like they have bottomed as this Friday afternoon stocks and commodities were all sharply higher including the crude oil market.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures in the May contract settled last Friday in New York at 14.71 an ounce while currently trading at 15.30 up about $.60 for the trading week as I was recommending a bullish position getting stopped out at the 2 week low which was last Friday as I’m now sitting on the sidelines waiting for better chart structure to develop as that trade ended up pretty neutral. Silver prices are trading above their 20 and 100 day moving average telling you that the short-term trend is to the upside, however the chart structure is terrible at the current time which means that the risk/reward is not in your favor as silver is following the coattails of gold which continues its bullish momentum as the precious metals certainly have bottomed in my opinion. Copper prices are hitting a 3 month high in today’s trade also helping support silver prices as many of the commodity markets have bottomed here in the short-term as trading is all about risk and at this point in time this trade does not meet my criteria to enter into another bullish position so be patient as volatility has certainly increased over the last several weeks.
TREND: HIGHER
CHART STRUCTURE: POOR

Gold Futures

Gold futures in the April contract is trading above its 20 and 100 day moving average telling you that the short-term trend is higher as prices settled in New York last Friday at 1,220 an ounce while currently trading at 1,266 up over $45 for the trading week hitting a 14 month high with the next major level of resistance between 1,280/1,300 as this has been a very impressive rally. I have missed this trade to the upside as the chart structure never met my criteria to enter as the risk was too high, however I’m certainly not recommending any type of bearish position as that would be countertrend as who knows how high prices could go as the momentum seems to be getting stronger on a weekly basis as demand certainly has arrived. If the 1,300 level is broken there is very little resistance until around 1,400 as you have to remember prices have dropped from $1,900 over the last several years as volatility is huge at the current time and if you have missed this market on the upside I certainly would avoid this market at the current time as the risk/reward is not in your favor, but it certainly looks to me that the precious metals are moving higher including copper prices as well.
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.

Live Cattle Futures

Live cattle futures in the April contract settled last Friday in Chicago at 137 while currently trading at 135.22 down about 200 points for the trading week topping out at the 138 level which is major resistance as I’m currently sitting on the sidelines waiting for a trend to develop. If you take a look at the daily chart there is a gap around 132 as I think there’s a possibility that prices will go back down to that level as prices are still trading slightly above their 20 and 100-day moving average telling you that the short-term is mixed as I think we will be entering into a position possibly in next week’s trade. Volatility in cattle over the last 6 months has been extremely high with huge price swings to the upside and to the downside as I’m waiting for better chart structure to develop therefore lowering monetary risk as being patient is the key to successful trading as trading just to trade is a bad habit to develop. Cattle and hog prices have been extremely resilient over the last several months, but I do believe once Easter passes I think prices will head lower as all of the positive fundamental news has already been priced into this market in my opinion. If you are a producer I’m certainly recommending some type of hedge taking off some risk as protecting your livelihood is always the most important factor.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Cocoa Futures

Cocoa futures in the May contract is trading above its 20-day but still slightly below its 100-day moving average as I have been recommending a bullish position from last Friday at 2900 and if you took that trade continue to place your stop loss below the 10 day low which in Monday’s trade will be 2837 as the chart structure is outstanding at the current time. Cocoa prices hit a 7 week high bottoming out around the 2750 level after settling last Friday at 2900 while currently trading at 2970 as a possible bottom certainly looks to be at hand. As a trader you must trade with the trend as I had been recommending a short position in cocoa several months back and now I’m recommending a bullish position as the trend has changed as the risk/reward is in your favor as trading is all about risk and nothing else in my opinion so place the proper stop loss while risking 2% of your account balance on any given trade. The commodity markets, in general, have rallied this week as the U.S dollar may have topped out in the short-term bottom so continue to play this to the upside and if you have missed this trade wait for some price weakness to enter therefore lowering monetary risk.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in the May contract settled last Friday in New York at 57.53 while currently trading at 56.50 down about 80 points for the trading week continuing its bearish momentum as I’ve been recommending a short position over the last several months and if you took that trade continue to place your stop loss above the 10 day high which in Monday’s trade will be 59.00 as the chart structure has tightened up. Cotton futures are trading far below their 20 and 100-day moving average hitting a fresh contract low in Monday’s trade when prices actually went limit down trading as low as 54.53 before profit-taking pushed prices back up, but I still remain bearish as the fundamental picture is also extremely bearish at the present time. Many of the commodity markets have rallied in the last week or so but cotton continues to head lower due to the fact that we are going to plant more acres in 2016 that we did in 2015 coupled with the fact that China is not importing as much as they used to and are actually selling some of their massive reserves keeping a lid on prices in the short-term. Planting is underway in certain sections of the state of Texas as spring planting is upon us and if we do produce another record crop prices could even head lower so stay short and place the proper stop loss as who knows how low prices could actually trade.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Coffee Futures

Coffee futures in the May contract settled last Friday in New York at 115.20 while currently trading at 118.75 a pound forming a possible double bottom around the 114 level as I’m still sitting on the sidelines in this market as the trend has not yet developed as this market has remained choppy over the last several months. Coffee prices are trading above their 20-day but still below their 100-day moving average telling you that the short-term trend is mixed as prices hit a one-week high in today’s trade, but the breakout will be above 121.05 which is only an eyelash away as we could be entering into a bullish position any day. Volatility in coffee is relatively low as coffee historically speaking is one of the most volatile commodities so this sleeping giant will wake up one day and, in my opinion, I think it will be to the upside as prices have been depressed over the last several years as all the bad news has already been reflected in the price at the current time. The chart structure in coffee is outstanding as prices have gone nowhere as this will allow you to place a tight monetary stop loss, therefore, lowering monetary risk and as a trader that is one of the most important indicators before entering into a new trade.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Corn Futures

Corn futures in the May contract are trading below their 20 and 100-day moving average telling you that the short term trend is lower settling last Friday in Chicago at 3.59 a bushel while currently trading at the same price unchanged for the trading week with very low volatility. I have not talked about corn for quite some time as I still think prices will go nowhere over the next 6 weeks until spring planting starts to arrive as the volatility will certainly come back into this market in the summer months, but at the current time there are better markets with higher profit potential in my opinion. Traders are awaiting next week’s USDA crop report which will show approximately how many acres will be planted in 2016 as this year reminds me of 2012 when we had a terrible drought in the Midwestern part of the United States, as we have been extremely warm this winter as I do see a possible weather market developing this summer as it would not surprise me if hot and dry temperatures occurred this summer as the same weather pattern happened in 2012 as what’s occurring at the present time. The problem with corn and the grain market is the fact of over supplies and a strong U.S dollar keeping demand very low and if we do produce another 14 billion bushels you can see 2.50 in the cards come harvest time this October as that would be a real problem for U.S farmers.
TREND: LOWER - MIXED
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

Michael Seery, President
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There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.