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 1,323 an ounce while currently trading at 1,336 as I was recommending a short position getting stopped out in Tuesday's trade around the 1,347 level as gold prices rallied sharply off of the monthly unemployment number which was released last Friday. I’ve been recommending a short position from around 1,333 and added more contracts around the 1,320 level as this was a frustrating trade as prices traded as low as 1,307 earlier in the week as this market remains very choppy as I’m now sitting on the sidelines looking at other markets that are beginning to trend. Gold prices continue to react off what the Federal Reserve says and what the most recent rumor developing so avoid this market at present as there is no trend as who knows where interest rates are going at this time. I was also recommending a short position in the 10-year note getting stopped out around the 131/13 level as uncertainty continues to wreak havoc on many of these markets as I only have one trade recommendation currently with very few trends currently developing.
TREND: MIXED
CHART STRUCTURE: POOR
Crude Oil Futures
Crude oil futures in the October contract settled last Friday in New York at 44.44 a barrel while currently trading at 46.72 up over $2 for the trading week despite the losses in today’s trade. Crude oil prices are still trading right at their 20-day but still below their 100-day moving average telling you that this market's trend is mixed & has been very choppy over the last several months as I’m currently sitting on the sidelines waiting for better chart structure to develop. Volatility at present is relatively high as we have had many $1 or more moves on a daily basis recently as I think that will continue because of the fact that the Federal Reserve flip flops on interest rates and until that decision is made we will constantly see choppiness in my opinion. Oil futures are probably in a longer term bottoming out pattern, but record supplies are still going to continue to keep a lid on prices probably throughout 2016, however as a trader, I look for the risk/reward to be in your favor as this commodity does not meet that criteria at the current time.
TREND: MIXED
CHART STRUCTURE: POOR
S&P 500 Futures
The S&P 500 in the September contract is currently down 23 points trading at 2154 as I’ve been writing about this commodity for several weeks looking at enter a possible short position if prices close under 2155 while then placing my stop loss above the 10 day high which currently stands at 2192 risking around 37 points or $1,850 per mini contract plus slippage and commission. The S&P 500 is trading below its 20-day but still above its 100-day moving average hitting a 5 week low in today’s trade as rumors are circulating that interest rates are on the rise, but in all honesty who knows as I certainly don’t as this changes on a daily basis which I think is very embarrassing to the Federal Reserve. I’m a technical trader as the reason that I am bearish has nothing to do with fundamentals, but has something to do with the risk/reward in your favor coupled with the fact that the chart structure is excellent as that meets criteria as I’m also still short the NASDAQ 100 which now stands at a 6 week low as the trend in that market is lower in my opinion after breaking major support. Volatility in the S&P 500 is right near at a 2 year low as generally speaking September and the month of October can be highly volatile, and that is starting to play out already & if your account balance meets the criteria of 2% risk on any given trade take it, but wait for the close to take a shot at the downside if prices break 2155.
TREND: LOWER - MIXED
CHART STRUCTURE: EXCELLENT
10-year Note Futures
The 10-year note in the December contract are currently trading down 10 ticks at 130/12 as I’ve been recommending a short position getting stopped out in Tuesday's trade around 131/13 risking around 3/4 quarters of a point in a very disappointed trade as prices have returned to their bearish trend. The monthly unemployment number came out last Friday & was construed as negative therefore the Federal Reserve would not raise rates sending the 10-year note rallying stopping us out, however now rumors are sending the 10-year note lower at this time as I’m sitting on the sidelines waiting for another trend to develop. I absolutely hate day in and day out rumors as the Federal Reserve is creating extremely choppy markets due to the fact that nobody knows anything including myself as I only have one trade recommendation out at the current time so let’s be patient & see what develops.
TREND: LOWER - MIXED
CHART STRUCTURE: SOLID
Nasdaq 100 Futures
The NASDAQ 100 in the September contract settled last Friday in Chicago at 4795 while currently trading at 4767 down about 30 points for the trading week at the time of writing this article as I have been recommending a short position from the 4757 level while placing your stop above the 10 day high which continues to stand at 4338 on a closing basis. In my opinion, there could be a triple top created on the daily chart, but prices need to break critical support at 4750 to build momentum to the downside as prices remain in a very tight trading range over the last 5 weeks. The stock market in general continues to move sideways as there is very little fresh fundamental news to dictate short-term price action as I’m also still looking at a possible sale of the S&P 500 around the 2157 level on a closing basis as that market is having a hard time making all-time highs. The 10-day high will not be lowered for another 8 trading days so your going to have to accept the monetary risk as the original risk was $1,600 per mini contract plus slippage and commission as the NASDAQ 100 mini contract is rather large with tremendous swings accept for the last 5 weeks, but that won’t last much longer as volatility will come back.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
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.
Corn Futures
Corn futures in the December contract settled last Friday in Chicago at 3.28 a bushel while currently trading at 3.36 up about 8 cents for the trading week as I’m currently sitting on the sidelines in this market as prices remain choppy over the last several months. Corn prices are trading above their 20-day still far below their 100-day moving average as prices have hit a 2 week high after making contract lows last week just under 3.15 a bushel only to rally sharply on rumors that this Monday’s USDA crop report will show lower production numbers. Weather conditions in the country of China hurt their production numbers rather considerably pushing up prices higher, however, in my opinion, the rest of 2016 prices should basically trade sideways as we have huge supplies coming on the market as harvest is a couple of weeks away as 15.1 billion bushels is an amazing crop. I do think there is light at the end of the tunnel in 2017 as the corn prices could be entering a bullish trend as lower acres will produce lower production numbers as 2017’s crop will not be a record in my opinion, however for the rest of 2016 I just don’t think the risk/reward is on your side in either direction.
TREND: MIXED
CHART STRUCTURE: SOLID
Sugar Futures
Sugar futures in the October contract settled last Friday in New York at 20.18 a pound while currently trading at 20.03 down slightly for the trading week still stuck in a relatively narrow trading channel over the last 2 months. Sugar prices have been trading between 19.50/21 as you would have to see one of those levels broken to continue its trend as I don’t know where prices are headed at the current time as I’m sitting on the sidelines waiting for a new breakout to occur. Sugar prices are trading below their 20 but still above their 100-day moving average telling you that the short-term trend is mixed, but keep a close eye on this market as we could be entering a bullish or bearish position sometime next week. Volatility in sugar is still relatively high despite the fact that prices have gone nowhere as the commodity markets in general experience higher volatility throughout the autumn months. The U.S dollar is also stuck in a trading range, and that’s why many commodities have been going sideways with very few trends developing, but trends always come back eventually as trading is about patience not just trading to trade as you might have to go couple weeks before another situation develops as it’s a long trading year as there will be many situations throughout.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Soybean Futures
Soybean futures in the November contract are trading higher by 5 cents this Friday afternoon in Chicago after settling last Friday at 9.52 a bushel now at 9.82 up $.30 for the trading week as a possible double bottom may have been formed around 9.40 on the daily chart. At present I’m sitting on the sidelines in this market as soybeans remain very choppy and difficult to trade successfully in my opinion; however, a trend is going to develop relatively soon as traders are awaiting Monday’s highly anticipated USDA crop report which will certainly send short-term price direction back into this market. In my opinion, I do believe that soybeans are creating a bottom, but that doesn’t mean prices can’t head even lower as trading is all about risk and risk only in my opinion so avoid this market at present. Rumors are circulating that the USDA’s corn and soybean production are too high as heavy rains in recent weeks have lowered production numbers in key growing sections in the Midwestern part of the United States so take my advice & avoid this market at present and see what Monday’s trade brings.
TREND: LOWER - MIXED
CHART STRUCTURE: POOR
Trading Theory
What’s the difference between old crop & new crop in the agricultural commodities? When analysts and traders talk about agricultural commodities such as soybeans & corn, the one thing they generally mention is old crop versus new crop, and that might confuse some beginners on what exactly is the difference. I will keep it simple because the only difference between old crop and new crop is that old crop in soybeans is any month other than November as an example is March or May and all months that were grown last year while the new crop is the November soybeans and will be harvested this October of 2016 and will be grown this summer. That’s why sometimes there is a price difference between the old crop and the new crop because of the fact that this year’s harvest in soybeans could be as high as 4.1 billion bushels pushing prices lower in the November contract as old crop, and new crop can also have different carryover levels or supply levels. Old crop corn is any month other than the December contract while the new crop is only the December contract which will be grown this summer and harvested in October and sometimes there’s a price difference between old crop and new crop as well because as we will be harvesting around 15 billion bushels in October which is the reason why the December corn can be lower than the May corn because that was old crop which was harvested last October also having a different supply situation. Many of the agricultural commodities are affected by old crop & new crop including the grains, meats, coffee, and cotton so if you need help understanding which month you should be trading feel free to give me a call at any time & I will be more than happy to make sure that you are trading the correct month.
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.
