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 June contract are trading higher by $10 this Friday afternoon after settling last Friday at 1,253 while currently trading at 1,267 up about $14 for the trading week and hitting a four-week high. Gold is trading above its 20 and 100-day moving average telling you that the short-term trend is to the upside as a weaker U.S dollar coupled with a terrorist attack this week helped propel prices higher. The next major level of resistance is at 1,275 & if that is broken, I would have to think that prices will retest the April 17th high of 1,297 as this is one of the only few bullish trends out of the commodity sectors. I am not involved in this market at present as the chart structure remains poor. The U.S dollar is right near a seven-month low as that has certainly helped gold prices come off recent lows as that trend seems to be strong to the downside. The stock market hit all-time highs once again in Thursday's trade having very little effect on gold prices as money flows seem to be going into both sectors which is very unusual, but can happen periodically with investors being interested in both sectors. In my opinion, I still believe gold prices are limited to the upside as all the excitement is in the equity markets, but there are so many problems worldwide right now that prices are supported in the short term.
TREND: HIGHER
CHART STRUCTURE: POOR - CHOPPY

Silver Futures

Silver futures in the July contract settled last Friday in New York at 16.79 an ounce while currently trading at 17.30 up about $0.50 for the trading week right near a four-week high and this market remains very choppy in my opinion. Silver prices are trading above their 20-day but still below their 100-day moving average which stands at 17.43 which is just an eyelash away with the next major level of resistance at the 18/18.50 level. Terrorism throughout the world and tensions with North Korea have bolstered the precious metals in recent weeks including silver prices. Silvers chart structure is poor, meaning the monetary risk is too high and the trend is too choppy to enter into a new trade, so be patient as we could be involved over the next couple of weeks. It's time to look at other markets that are beginning to trend as there are few and far between. Silver historically speaking is an inflationary commodity, but at present inflation is still under 2% in the United States with many of the agricultural markets near recent lows once again. Silver has had a hard time sustaining any real type of rally in 2017.
TREND: MIXED
CHART STRUCTURE: POOR - CHOPPY

Crude Oil Futures

Crude Oil futures in the July contract are trading lower for the 2nd consecutive trading session after settling last Friday in New York at 50.67 a barrel while currently trading at 48.82 down nearly $2 for the trading week right at a two-week low. Crude oil has remained incredibly choppy in 2017, and I'm not involved in this market. Traders were disappointed with OPEC's decision in Thursday's trade that sold off oil nearly $3 a barrel as Rig counts in the United States continue to climb. Oil's fundamentals remain bearish with prices still trading under their 20 and 100-day moving average telling you that the short-term trend is lower. I am advising clients to avoid this commodity at present. I don't have any trade recommendations for the 1st time in over two decades because of how choppy the commodity markets are presently. However, things will change as we enter the summer months when historically speaking volatility comes back and the trends do as well.
TREND: MIXED
CHART STRUCTURE: POOR - CHOPPY

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 in the November contract, which is around 65% completed which is right at historical standards is trading lower for the 4th consecutive trading session after settling last Friday in Chicago at 9.51 a bushel while trading currently 9.34. I am not involved in this market, but I am bearish soybeans as I think lower prices are ahead. Soybean prices are trading below their 20 and 100-day moving average as the Brazilian Real certainly has thrown a wrench into the closet. I think $9 is coming in the next week or so and I'm certainly not recommending any bullish position. I also think soybean meal prices are headed lower as this complex has nothing going for it to the upside. The Midwestern part of the United States is off to an ideal start to the growing season with no warm temperatures on the horizon. We should produce another record crop of around 4.4 billion bushels, and I see no reason to own soybeans at the current time as clearly, the trend is to the downside & if you are short place your exit strategy above the 10-day high.
TREND: LOWER
CHART STRUCTURE: POOR - IMPROVING

Corn Futures

Corn futures in the December contract which is around 90% completed in the Midwestern part of the United States which is right at historical standards settled last Friday in Chicago at 3.90 a bushel while currently trading at 3.90 in a very slow nonvolatile trading action as we enter the Memorial Day holiday weekend. As I've talked about in many previous blogs, I am looking for a breakout above 3.96 before going into a bullish position as the chart structure is outstanding and prices have gone sideways for several months while still trading above their 20 and 100-day moving average telling you the short-term trend is higher. However, be patient and wait for the true breakout to occur as we are still stuck in a tight consolidation. Soybean prices have hit a new contract low due to the Brazilian Real plummeting in the last week causing a devaluation of anything grown in Brazil. However, Brazil does not produce a lot of corn especially compared to the United States and that is why you see corn prices stay rather firm over the last couple of weeks, but if soybean prices continue to move lower they certainly will put pressure on corn over the long haul. The 10-day weather forecast has moderate rain coupled with average temperatures as we are off to an excellent start to the growing season as hot temperatures are not in sight presently.
TREND: HIGHER - MIXED
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton prices in the December contract which is considered the new crop & is currently being grown in the southern part of the United States settled last Friday in New York at 73.45 while currently trading at 73.20 in a very nonvolatile trading week as we enter the very volatile summer months. Estimates of this year's planted acres are around 12.2 million which could produce a massive crop and oversupply issues could come about as we are still stuck in the mud between 72/75 over the last two months and unable to break out in either direction. Cotton prices are trading under their 20 and 100-day moving average telling you the short-term trend is lower. However, this market has been incredibly choppy over the last two months with price direction going straight up and then straight down on multiple occasions so avoid this until a real breakout occurs which could be soon as volatility certainly will increase over the next several months. The 7/10 day weather forecast has average temperatures coupled with moderate rain as the growing season is off to a solid start.
TREND: LOWER
CHART STRUCTURE: SOLID

Sugar Futures

Sugar futures in the July contract settled last Friday in New York at 16.38 a pound while currently trading at 15.10 down about 125 points for the trading week hitting a one year low continuing its bearish momentum. I am not involved in sugar at present. Sugar prices were right near a four-week high in last week's trade then the Brazilian Real dropped 7% in one day sending anything grown in the country of Brazil sharply lower. It looks to me that sugar prices have not bottomed out just yet, but the chart structure is very poor and the risk/reward is not in your favor. However, I'm certainly not recommending any bullish position as that would be counter trend trading which is very dangerous for the long haul. Sugar prices are trading under their 20 and 100-day moving average as this market has been choppy over the last several weeks, but the longer-term downtrend is still intact as prices still could head substantially lower in the short term as the commodity markets and especially the agricultural markets remain weak.
TREND: LOWER
CHART STRUCTURE: POOR

Coffee Futures

Coffee futures in the July contract settled last Friday in New York at 132.10 a pound while currently trading at 130.00 down about 200 points for the trading week continuing its slow grinding bearish momentum to the downside. I'm not involved in this market and will not take a short position and I'm advising clients to avoid coffee at present. The agricultural markets continue to look weak and the Brazilian Real is the main culprit and has put pressure on sugar, coffee, orange juice and soybean prices as these markets all look to head lower in my opinion. However, I do think the downside is limited as that is the reason I am not going short. Coffee's trading under its 20 and 100-day moving average telling you that the short-term trend is to the downside as large production numbers are coming out of the country of Brazil which is the biggest producer in the world as a weak currency and abundant supply continues to keep a lid on prices. The chart structure in coffee is still is very solid and as I've written about in previous blogs, I'm interested in a bullish position if prices break the 137.75 area which is still quite a distance away so keep a close eye on this market as the volatility will not stay this low for much longer.
TREND: 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.