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 February contract settled last Friday in New York at 1,181 an ounce while now trading at 1,175 hitting a fresh 8 month low as prices continue to move southward on a weekly basis as I am kicking myself as I am not short, however, I have not been picking a bottom either. At present, I'm telling investors to avoid this market, but certainly, do not be buying this commodity as I do believe lower prices are ahead as I'm still very bullish the U.S dollar and the stock market as a whole since both of those are negative towards gold prices. The 10-year note today broke 2.40% which is the highest yield since January and I do believe interest rates are going higher which is not another negative influence towards gold prices. Gold futures continue to move lower despite the fact that crude oil is about $6 in the last 2 trading sessions which generally is very bullish most inflationary commodities, however, that shows you how weak gold is at present as demand is lacking.
TREND: LOWER
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the March contract settled last Friday in New York at 16.55 an ounce while currently trading at 16.53 basically unchanged with the week trading in a very nonvolatile manner as prices are stuck in a 2-week consolidation after hitting a 5 month low. Silver prices are trading below their 20 and 100-day moving average telling you that the short-term trend is lower as I'm currently sitting on the sidelines waiting for another trend to occur which could develop in the next couple of weeks as the chart structure is improving on a daily basis, therefore, lowering monetary risk. Gold prices have been falling rather dramatically ever since the Trump election as that has put severe pressure on silver prices ,however if we are going to expand the economy & do huge infrastructure stimulus I would think that silver prices look cheap as copper prices are still right near recent highs and sharply higher from their 2016 lows. Trading is all about risk/reward and at present I just don't see a trade in this commodity as trading to trade is a very dangerous over the course of time as you must be patient and wait for probabilities to improve in your favor.
TREND: LOWER - MIXED
CHART STRUCTURE: IMPROVING

Crude Oil Futures

Crude oil futures in the January contract settled last Friday in New York at 46.06 a barrel while currently trading at 50.55 up about $4.50 for the trading week all due to the fact of OPEC cutting 4.5% of production sending prices in Wednesdays and Thursdays trade sharply higher now hitting a 5 week high. Prices bottomed out around November 14th at 42.74 & now has rallied about $8 as this market remains extremely choppy and has gone nowhere over the last 6 months as I am currently sitting on the sidelines as the chart structure is poor therefore the monetary risk is too high to enter in my opinion. The energy sector has caught fire including natural gas as winter is now upon us which is the high demand for heating oil as well, however I still think this market remains choppy for the rest of 2016 as a strong U.S dollar could limit prices to the upside in my opinion so look at other markets that are beginning to trend with less risk. Crude oil is now trading above its 20 and 100 day moving average with major resistance around the $52 level which was hit in the month of October on a couple of different occasions and if that level is broken you have to think that the bullish trend would continue, but at present I'm recommending no position.
TREND: HIGHER
CHART STRUCTURE: POOR

Natural Gas Futures

Natural gas futures in the January contract settled last Friday in New York at 3.20 while currently trading at 3.46 up significantly for the trading week hitting a 5 week high. At the current time, I'm sitting on the sidelines as I wrote about this market 2 weeks ago as I was looking to get into a bullish position. However, the chart structure did not meet my criteria as the monetary risk was too high at the time. Natural gas prices are trading above their 20 and 100 day moving average telling you that the short-term trend is higher as prices look to retest the contract high which was hit on October 18th at 3.67 as we enter the extremely volatile winter season which can cause tremendous price spikes due to very cold weather in the Midwestern part of the United States. Natural gas has been on a wild roller coaster bottoming out on November 9th at 2.72 as I'm looking for a consolidation before entering as the entire energy sector has caught fire over the last several weeks. There is a price gap between 3.22/3.25 and that makes me nervous if you have a bullish position as I do think that gap will be closed within the next week so let's keep a close eye on that price level.
TREND: HIGHER
CHART STRUCTURE: POOR

Cocoa Futures

Cocoa futures in the March contract settled last Friday in New York at 2415 while currently trading at 2400 down about 15 points for the trading week still stuck in a 3-week consolidation as prices look to be bottoming in my opinion. Cocoa prices are trading below their 20 and 100-day moving average right near contract lows as the ideal weather in the Ivory Coast which is considered West Africa is pushing production numbers higher, therefore, pushing prices lower here in the short-term. I am looking at possibly entering a bullish position next week if prices hit a 4 week high, however, if prices break the contract low around 2358 you would then have to think lower prices are ahead despite the fact that we are entering the strong demand season of Christmas. Cocoa prices are trading at 3 year lows with major support around the 2000 level which is still quite a distance away, but be patient & let's see if a bottoming pattern does occur for a possible breakout to the upside as the chart structure is excellent at present, therefore, the monetary risk is relatively low as cocoa can be an extremely volatile high-risk trade at certain times of the year but at this time volatility is low.
TREND: LOWER - 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.

Soybean Futures

Soybean futures in the January contract settled last Friday in Chicago at 10.46 a bushel while currently trading at 10.34 down about $0.12 for the trading week after hitting highs that we haven't seen since mid-July last week as I'm still sitting on the sidelines at present. Soybean oil has rallied significantly to a multi-month high which is pushing soybeans higher. However, the chart structure is very poor currently as I'm advising clients to avoid this market at present as this market really does remain choppy. Soybean prices are now trading above their 20 and 100-day moving average telling you that the short-term trend is higher as I do think this commodity is in a bottoming pattern but limited in price. Traders are awaiting the next USDA crop report as we produced another record here in the United States of around 4.3 billion bushels and I would have to believe that next year we will not plant as many acres and that is very supportive in my opinion. A strong U.S dollar has put volatility to a crawl here in recent weeks except for the night sessions which are having some unusual price action occurring. However, I probably will not be involved in this market for a couple more months.
TREND: MIXED - HIGHER
CHART STRUCTURE: POOR

Corn Futures

Corn futures in the March contract settled last Friday in Chicago at 3.58 a bushel while currently trading at 3.44 down about $0.14 for the trading week right near a 2 month low. I'm sitting on the sidelines in this market as I think prices are limited to the upside and the downside as I am advising clients to avoid corn at this time. Corn prices are trading below their 20 and their 100-day moving average which tells you the short-term trend is lower, however, prices really haven't gone anywhere over the last 5 months as there is very little fresh fundamental news to push prices in either direction so look at other trades with higher expectations in my opinion. The U.S dollar continues to move higher while currently trading around the 101 level which is a 13 year high as that certainly is a negative towards grain prices here in the short term as traders await the next USDA crop report which is still about 2 weeks away. There are really only two major things that can turn the corn market to the upside & one is a drought possibility in 2017 or less acres being planted which could definitely support prices, but we will have to see what those numbers actually are which is still several months away.
TREND: MIXED - LOWER
CHART STRUCTURE: IMPROVING

Cotton Futures

Cotton futures in the March contract settled last Friday in New York at 71.25 while currently trading at 70.90 down slightly for the trading week still stuck in a 5-month consolidation as the chart structure has turned outstanding at present. I am looking at a bullish position if prices breakout above 72.75 if that does happen and I would place my stop loss at the 10 low which stands at 70.40 risking around 135 points or $1,200 per contract plus slippage and commission. Harvest is in full swing and almost complete in the southern part of the United States as we will now focus on next year's crop as prices are still trading below their 20-day but still above their 100-day moving average which tells you that short-term trend is mixed so keep a close eye on this market as we could be involved relatively soon. If you take a look at the daily cotton chart its very similar to many of the grain charts as well as prices continue to move sideways as we really don't have any news to dictate short-term price action as the next USDA crop report is still 2 weeks away as this is strictly a technical trade at present.
TREND: HIGHER - MIXED
CHART STRUCTURE: POOR

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 19.84 a pound while currently trading at 18.94 down about 90 points for the trading week as I've been recommending a short position from around the 21.67 level & if you took the trade continue to place your stop loss at the 10 day high which stands at 20.45 as the chart structure will not improve until later next week. Sugar prices continue to move lower on oversupply issues & larger production numbers as China is in the market to sell their sugar reserves which means they are not importing at present coupled with the fact that a major company named Nestlé said that they found a breakthrough to put less sugar in their food products which is another very bearish fundamental situation developing so stay short & continue to place the proper stop loss. Sugar prices are trading far below their 20 and 100-day moving average, and I think the next major level of support is all away down around 18, and as I've talked about in previous blogs I think sugar can trade into the low 17's relatively soon as volatility remains high despite the fact of lower prices.
TREND: LOWER
CHART STRUCTURE: POOR

Coffee Futures

Coffee futures in the March contract settled last Friday in New York at 155.0 a pound while currently trading at 145.60 down about 900 points from trading week with prices not seen since mid-August as prices topped out last month around the 1.80 level, but at the current time I'm sitting on the sidelines as the chart structure has been poor in this market for months. Coffee prices are trading below their 20 and 100-day moving average for the 1st time in months & that tells you that the short-term trend is lower with the next major level of support around the 140 level as I do believe coffee prices are getting cheap. A strong U.S dollar is certainly keeping a lid on many agricultural products including coffee, but my only short position in the soft commodities is a short sugar position which also continues to move lower. However, the volatility will be to the upside in coffee as were starting to enter the very volatile and critical winter growing season in the country of Brazil. Many of the commodity markets have been very choppy over the last several months, and that's why I only have 1 trade recommendation as I'm waiting for better chart structure to develop across many different sectors as that might take some time.
TREND: LOWER
CHART STRUCTURE: POOR

Lean Hog Futures

Lean hog futures in the February contract are trading lower by about 300 points this week in Chicago currently trading at 53.75 as I'm currently sitting on the sidelines looking at entering into a short position if price break 52.35 which is still 160 points away so your going to have to be patient and wait for the trend to occur. Hog prices are trading below their 20 and 100-day moving average despite the fact that prices have rallied around 15% from the recent lows only to sell off over the 3 trading sessions as the livestock sector has been relatively strong over the last several months, but I do think lower prices are ahead. The chart structure will start to improve in this market later next week so keep a close eye on a possible short position as I do think a possible retest around the 46 level could be in the cards over the next several weeks as the U.S dollar remains very strong, as most commodities continue to go lower except for the energy sector as that's all due to an OPEC production cut.
TREND: MIXED
CHART STRUCTURE: IMPROVING

Trading Theory

If you follow this rule you will have a chance of being successful over the course of time, if you don’t follow this rule you will be sure to lose your money quickly. This rule is simple Do Not OVERTRADE EVER for this is an easy way to lose all your capital quickly. My definition of over trading is risking too much money on any given trade, for example if you are trading a $100,000 dollar account and you place a gold trade today you should limit your loses to 2% of the account value which in this case is $2,000 which allows you to be wrong on many trades and still be around to play another day. In futures and option trading you will have losing trades that is for certain so make sure you manage those losses and move on to another trade.

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
Facebook.com/seeryfutures
Twitter–@seeryfutures
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.