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 April contract settled last Friday in New York at 1,230 while currently trading at 1,245 as I was recommending a short position and stopped out early in the week taking a very small loss as the momentum continues to the upside due to the fact that the U.S dollar is now near a 7 week low pushing up the precious metals in the last couple of weeks. At present, I'm sitting on the sidelines waiting for a trend to occur as prices are now trading above their 20 and 100-day moving average looking to retest the February 27th high of 1,265 & if that is broken you have to think prices would continue to move higher. The main catapult was the fact that the Federal Reserve stated that they will slow down on interest rate hikes sending gold prices from 1,200 up to today's price levels, but this market remains choppy in my opinion as the risk/reward is not in your favor as there are very few trends at present. The Obama care replacement has caught a couple of snacks also sending the stock market lower this week and gold prices higher, however, I still believe that will be resolved as money flows have been entering the bonds and gold this week.
TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures in the May contract settled last Friday in New York at 17.41 an ounce while currently trading at 17.62 up about $0.20 for the trading week right near a 3 week high as I am currently not involved in this market as we are still in a trading range as the trend is mixed at present time. Silver prices are trading above their 20-day and right at their 100-day moving average reacting positively to the fact that the U.S dollar is near a 7 week low as there is very little fresh fundamental news to dictate short-term price action, as I don't think I'll be involved in this market for quite some time as the chart structure is poor at present, therefore, the monetary risk is too high to enter. Silver prices have rallied about $0.70 from recent lows as the Federal Reserve basically stated they will slow down on interest rate hikes as that was the main reason silver prices rebounded. Longer term I'm still bullish prices as I think historically speaking prices are cheap. However, I'm a short-term trader as there is no trend at present so look at other markets that are beginning to trend with better risk/reward scenarios.
TREND: MIXED
CHART STRUCTURE: IMPROVING

Crude Oil Futures

Crude oil futures in the May contract are trading lower for the 5th consecutive trading session currently down $0.10 at 47.60 a barrel as I am currently not involved in this market, but I do have clients that have initiated short positions so place your stop loss above the 10-day high which stands at 50.14 as the chart structure is solid at present as volatility remains low. Prices are trading at 4 months low far below their 20 and 100-day moving average telling you that the short-term trend is lower as I'm certainly not recommending any type of bullish position as I do think prices will retest the contract low which was hit on November 14th at 45.77 as the commodity markets still look weak in my opinion despite a weak U.S dollar. OPEC continues to try to support this market sending prices near $57 in the month of January, however the main problem is massive oversupply issues as the United States is also looking to expand their production and if you are still short stay short & place proper stop loss as I still think lower prices are ahead, however, the chart structure will not improve for another 5 trading sessions.
TREND: LOWER
CHART STRUCTURE: SOLID

Natural Gas Futures

Natural gas futures in the May contract settled last Friday at 3.00 while currently trading at 3.10 up slightly for the trading week hitting a 5 week high as I'm currently not involved in this commodity at present. If you are long a futures contract, I would place my stop loss at 2.94 as an exit strategy as prices are now trading above their 20 and 100-day moving average telling you that the short-term trend is higher after bottoming out in last month's trade. The high volatility in natural gas is generally in the winter months as we are now officially in spring as volatility should remain low until the summer months as I will wait for a true trend to develop as I think this is just a kickback from lower prices. Many of the commodity markets have been mixed in recent months with very few trends including natural gas as the trends will come back, in my opinion, it's just a matter of time, but we need a spark to get things going in my opinion, however, avoid this market and look at other markets with tighter chart structure and a better risk/reward scenario
TREND: MIXED - HIGHER
CHART STRUCTURE: SOLID

Cocoa Futures

Cocoa futures in the May contract settled last Friday at 2013 while currently trading at 2154 up about 140 points for the trading week hitting a 7-week high rallying sharply off of multi-year lows. Prices are trading above their 20-day but still below their 100-day moving average which stands at 2209 as I'm currently sitting on the sidelines in this market as the chart structure is terrible as the 10-day low stands at 1933 risking too much money in my opinion at this time. I'm looking at a possible bullish position when the chart structure tightens up which could take several more days to the Ivory Coast of West Africa will most likely produce a record crop. However, the concerns are with the quality of the beans as that is why we've seen the rally in recent weeks. The chart structure will start to improve later next week as I'm looking to possibly buy cocoa if prices dip 50/75 points so keep a close eye on this market as we could be involved very soon as the soft commodity still look weak in my opinion as many of the agricultural markets continue to head lower.
TREND: HIGHER - MIXED
CHART STRUCTURE: POOR

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

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 settled last Friday in Chicago at 10.00 a bushel in the May contract while currently trading at 9.78 down $0.13 in today's trade breaking major support as I've been recommending a short position from the 10.48 level so continue to place your stop loss at the 10-day high standing at 10.09 as the chart structure will not improve so you will have to accept the monetary risk at this time. I am also recommending a short position in the November soybeans which is the new crop from around the 10.01 level & if you took that trade continue to place your stop loss at the 10-day high of 10.04 as this market continues to move lower due to the fact of massive acreage being planted here in the Midwestern part of the United States in 2017 totaling possibly between 88/90 million acres which should produce another record crop. Soybean prices have traded lower for the 3rd consecutive day as I do think the May contract can go to 9.50 & the November contract looks to go down to 9.40 so stay short as this trend is getting stronger to the downside on a weekly basis as the fundamental picture remains extremely bearish in my opinion.
TREND: LOWER
CHART STRUCTURE: SOLID

Corn Futures

Corn futures in the May contract are trading lower for the 5th consecutive trading session after settling last Friday in Chicago at 3.67 a bushel while currently trading at 3.55 continuing its bearish momentum as I have been recommending a short futures position from the 3.80 level so continue to place your stop loss above the 10-day high at 3.71 as this market remains bearish in my opinion. The next level of support is 3.50 which I think will be tested in next week's trade as estimates of acres in next Friday's USDA crop report are between 90/92 million as the fundamentals remain bearish despite the fact that we probably will not produce a record crop in 2017. The grain market in general remains on the defensive as I am also short soybeans which continue to move lower as we have just produced too much in recent years and that has been the main problem. I do think lower prices are ahead so continue to place the proper stop loss as the trend is your friend when you trade commodities & clearly this trend is getting stronger in my opinion as we enter spring planting in the next couple weeks.
TREND: LOWER
CHART STRUCTURE: SOLID

Sugar Futures

Sugar futures in the May contract settled last Friday in New York at 18.17 a pound while currently trading at 17.83 down about 30 points for the trading week continuing its bearish momentum despite trading higher for the 3rd consecutive trading session. The chart structure in sugar has improved as the 10-day high now stands at 18.53 as I have not been involved in this market, however if you are short a futures contracts continue to stay short & place the proper stop loss as prices are still trading under their 20 & 100-day moving average telling you that the short-term trend is lower. Sugar prices hit a low in Wednesday's trade around 17.02 as increased production in Brazil coupled with weak demand continues to hamper this market as I still think there is more room to run to the downside. The agricultural markets in general continue to move lower although with very low volatility as I do think that the 17 level will be retested in next week's trade as prices continue to drift lower despite the fact that the U.S dollar is at a 7 week low which is generally supportive to commodity prices, but the problem is we have too much production, therefore, the supply/demand tables are bearish.
TREND: LOWER
CHART STRUCTURE: SOLID

Coffee Futures

Coffee futures in the May contract is currently trading at 138.60 after settling last Friday in New York at 142.05 a pound down over 300 points for the trading week right near a 3 month low looking to retest the contract low which was hit on December 28th at 135.20 as this market remains on the defensive in my opinion. I am currently not involved in coffee as we have been in a sideways channel over the last 4 weeks as prices are now trading below their 20 and 100-day moving average as the coffee crop in Brazil looks to be excellent at this point. The agricultural markets continue to remain week as I'm currently short corn and soybeans as there are also very few trends at present as I do think the downside is limited in coffee as I will be patient. Coffee has been mixed for quite some time despite the fact that the U.S dollar is at a 7 week low as it has not helped support prices as we are starting to enter the extremely volatile spring months for coffee prices as a possible frost can occur in the country of Brazil sending prices sharply higher, however at the present time weather conditions remain ideal and the trend is now to the downside.
TREND: MIXED - LOWER
CHART STRUCTURE: SOLID

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.