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 June contract settled last Friday in New York at 41.71 a barrel while currently trading at 43.77 up about $2 for the trading week. I’ve been sitting on the sidelines in this market as the chart structure does not my criteria to enter into a bullish position at this time. Crude oil prices are trading far above their 20 and 100-day moving average telling you that the short-term trend is higher as the bullish momentum continues despite the fact that last Sunday OPEC decided not to cut production sending prices sharply lower only to rally significantly over the last several days. That tells me that the short-term bottom is in place. At the current time the 10 day low stands at 39.00 which is too far away. However, we could be entering into a bullish position over the next couple of days once the chart structure tightens, therefore, allowing a tight stop loss lowering monetary risk as that’s what trading is all about. Many of the commodity markets were sharply lower today basically blamed on profit-taking, but oil continues to march higher as it does certainly look to me that oil prices are headed higher it’s just how much higher prices can go before production comes back online.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Silver Futures
Silver futures in the July contract are currently trading lower by 9 cents this Friday afternoon in New York after settling last week at 16.35 while currently trading at 17.05 up around $.70 for the trading week hitting a one-year high. At the current time, I’m sitting on the sidelines in this market. I have missed this trade and I am now lying in the weeds waiting for a sharp selloff to develop while then taking on a bullish position as the 10 day low currently stands at 15.84 and should start to improve later next week so let’s keep a close eye on silver prices as we could be entering a trade any day. Silver is trading above its 20 and 100-day moving average telling you that the short-term trend as prices traded as high as 17.72 an ounce then profit-taking ensued sending prices lower. The commodity sectors continue to experience a highly volatile trade including silver prices as gold continues to put a lid on silver as gold prices were lower by another $7 this Friday afternoon. The real bull market is in silver, and industrial metals in my opinion so keep an eye on this market as if we can get in around the 16.50 level I will be very interested in the upside.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Cattle Futures
Cattle futures in the June contract are trading lower for the 5th consecutive trading session continuing its bearish momentum. I’ve been recommending a short position from around the 124 level and if you took that trade continue to place your stop loss above the 10 day high which now stands at 124.10 as the chart structure will start to improve on a daily basis starting next week. Prices are trading far below their 20 and 100-day moving average as the chart structure is very poor at the current time as prices are hitting a 1 year low as I remain short as who knows how low prices could actually trade. Many of the commodity markets have been rallying substantially; however cattle has done the exact opposite as feed costs including corn and soybean meal have gone sharply higher over the last several weeks sending shockwaves into the cattle industry. Expansion is also at play so continue to play this to the downside, however if you missed this market move on as the risk/reward is not in your favor. At the current time, I’m also recommending a short position in hogs which continue to grind higher as this has been a very frustrating trade as I do think the livestock sector is still overpriced.
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
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.
Lean Hog Futures
Lean hog futures in the June contract settled last Friday in Chicago at 77.62 while currently trading at 78.70 up about 100 points for the trading week despite the fact that cattle futures plummeted trading lower for the last 5 straight trading sessions hitting a one-year low, however having very little impact on prices. At the current time I’ve been recommending a short position from around the 79.50 level and if you took that trade continue to place your stop loss which now will be lowered to today’s high of 80.45 as the chart structure has turned outstanding at the current time. Hog prices are still trading below their 20 and 100-day moving average telling you that the short-term trend is lower. However, prices have been very resilient which has been frustrating, but I will continue to place the proper stop loss as I still think prices will retest 77 possibly in next week’s trade. The commodity markets have been on a wild ride this week as I think the volatility will continue throughout most sectors, and if you have not taken this trade, I would still recommend it even at today’s price levels as the risk/reward is still in your favor due to outstanding chart structure.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Wheat Futures
Wheat futures in the July contract are trading lower for the 2nd consecutive trading session down $.13 at 4.90 a bushel. I’ve been recommending a bullish position from right around this level and if you took that trade continue to place your stop loss under the 10 day low which stands at 4.53 risking around $.37 or $1,900 per contract or $370 per mini contract plus slippage and commission. The chart structure in wheat will start to improve later next week as volatility certainly has come back into this market as prices settled last Friday in Chicago at 4.67 while currently trading at 4.89 and traded above 5.15 in yesterday’s trade as profit-taking has taken place in the grain market over the last couple of days. Wheat prices are trading above their 20 and 100-day moving average telling you that the short-term trend is to the upside as prices hit a six-month high. I do think prices have bottomed out, but make sure you place the proper amount of contracts on risking 2% of your account balance on any given trade as the grain market at present is as volatile as I’ve ever seen with high risk so respect this market.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Soybean Meal Futures
Soybean meal futures in the July contract settled last Friday in Chicago at 298 a ton while currently trading at 320. I’ve been recommending a bullish position from around the 278 level, and if you took that trade, I’m breaking all the rules because of extreme volatility. I’m now placing my stop loss at 316, and if we are stopped out, I will move on as this market has become too crazy. Soymeal futures are trading at a 10 month high as prices skyrocketed over the last three weeks due to the fact of Argentina rains flooding some of the soybean crop lowering the yield by around 5% coupled with pockets of hot and dry temperatures in the northern part of Brazil sending soymeal prices sharply higher. Prices are trading far above their 20 and 100-day moving average telling you that the short-term trend is higher. I am recommending to take profits, but I’m certainly not recommending any type of short position in this market as this should be avoided at the current time due to extreme volatility as there are now better markets that are beginning to trend then soymeal.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Sugar Futures
Sugar futures in the July contract settled last Friday in New York at 15.20 a pound currently trading at 15.88 up nearly 70 points for the trading week hitting a 3 week high. I’ve been sitting on the sidelines in this market as the chart structure is poor at present, therefore not allowing you to place a tight monetary stop. Sugar prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher as this market has been on a wild ride over the last several months as I’m not sure where prices are going, but the bullish trend is still intact. Sugar prices bottomed about 2 weeks ago around the 14.30 level as it will take a couple more weeks to improve the chart structure so keep a close eye on this market as volatility in the commodities has certainly come alive as money flows are coming back into hard assets or the commodity markets in general. The next major level of resistance in sugar is around 16.20, and if that is broken I think prices can retest the recent highs around 16.75, but the trend is not solid enough, in my opinion, to be involved so look at other markets that are beginning to trend.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
Trading Theory
Rounding Top & Bottom Formations: Rounding bottom chart patterns in the commodity markets are considered as a bullish signal which indicates a possible reversal of the current downtrend to a new uptrend and generally takes at least one month or longer to form. So patience is a virtue when you are looking for rounding bottoms. However, these indicators can be profitable because in my opinion they are 1 of the best trading indicators out there. These rounding bottom chart patterns in the commodity markets are a long-term reversal patterns that signals a shift from a downtrend to an uptrend. This pattern can also be used as a rounding top signaling that prices have peaked and look vulnerable to the downside. They are elongated and U-shaped and are sometimes referred to as rounding turns, bowls or saucers. The pattern is confirmed when the price breaks out above its moving average which also is considered a bullish trading indicator especially if the chart pattern breaks the 20 & 100 moving averages.
If you are looking for a futures broker feel free to contact Michael Seery at 312-224-8140 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
Michael Seery, President
Seery Futures
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Phone #: 312-224-8140
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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.
