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 August contract settled last Friday in New York at 1,256 an ounce while currently trading at 1,256 in a pretty uneventful trading week. I'm not currently involved in this market, but I'm looking at a possible short position in next week's trade. Gold prices hit a 5-week low in Wednesday's trade. However, the 10-day high stands at 1,284 which is a little too far away in my opinion so I will wait for the chart structure to tighten up with a rally or a couple more days off the calendar then I will be looking at getting short. I'm still bearish gold and the precious metals in general. The next major level support is at 1,225 with prices trading right at their 20 & 100-day moving average telling you that there is no trend at this time. The commodity markets, in general, remain weak except for the stock market which continues to move higher. I am also recommending a bullish position in the Dow Jones as I still think money flows will enter that market & out all the gold market in the coming weeks, so keep a close eye on this market for a possible short position.
TREND: MIXED
CHART STRUCTURE: IMPROVING

Natural Gas Futures

Natural gas futures in the July contract settled last Friday in New York at 3.03 while currently trading at 2.93 down about 10 points for the week as I have been recommending a short position from the 3.17 level as I have been involved in this market for quite some time as prices have stalled out in recent days. If you took this trade, continue to place the stop loss above the 10-day high standing at 3.08. However, in Monday's trade, we will roll over into the August contract as I will update where the new stop loss will be located as prices are still trading under their 20 and 100-day moving average telling you that the short-term trend is lower. Extremely mild temperatures in the Midwestern part of the United States over the next 7/10 days could continue to put pressure on this market in the short-term so continue to play this to the downside. The energy complex is slightly higher this Friday afternoon as the bearish trend week over the week seems to be accelerating as over supply issues continue to hamper this sector. That's the problem with natural gas as well as we have vast supplies as the United States is the largest producer in the world so let's see what Monday's trade brings.
TREND: LOWER
CHART STRUCTURE: SOLID

Dow Jones Futures

The Dow Jones in the September contract is continuing its remarkable run to the upside up another 6 points at 21,360. I was initially recommending the June contract from the 21,000 level rolling over into the September contract and if you're still in this trade which we have been involved in for about a month continue to place the stop loss under the 10-day low which stands at 21,081. That will start to improve on a daily basis later this week therefore lowering the monetary risk. The commodity markets in general are lower across the board today and many sectors are hitting contract lows as the money flows are going into the stock market & out of commodities at least here in the short-term and I think that trend is going to continue. The Dow Jones is trading far above it's 20 and 100-day moving average telling you the short-term trend is higher as this market broke out of a 3-month tight consolidation in late May and has not looked back ever since. Continue to place the proper stop loss as who knows how high this market could go, but I think it's still going higher.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Wheat Futures

Wheat futures in the September contract settled last Friday in Chicago at 4.81 a bushel while currently trading at 4.77 down slightly for the trading week. I'm not involved in this market, but still, have a bullish bias to the upside & if you do have a long futures contract place the stop loss at the 10-day low which in Monday's trade will be 4.50. The chart structure will start to improve in next week's trade therefore lowering monetary risk. Wheat prices are still hovering right near a 4-month high as there is a real drought situation in the Dakotas which is pushing prices higher as this is the only grain that has a bullish trend as corn and soybeans continue to go lower on a daily basis. However, wheat is a different commodity & can trade in opposite directions. I talk to many farmers throughout the day, and there is a real situation in certain parts of the Great Plains as well as Minneapolis as wheat continues to trade higher which is now at 6.70 a bushel and is the leader in this complex. Continue to play this to the upside as the volatility will certainly start to expand over the next several weeks as wheat trades above its 20 had 100-day moving average telling you that this trend remains higher.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

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.

Corn Futures

Corn futures in the December contract settled last Friday in Chicago at 4.02 a bushel while currently trading at 3.79 down $0.23 for the trading week lower for the last five trading sessions. This is all due to the excellent weather in the Midwestern part of the United States with rain almost on a daily basis ending the possibility of a drought here in the short-term. I was recommending a bullish position from around the 3.96 level getting stopped out around 3.88 taking a relatively small loss as I think lower prices are ahead as prices are looking to test the December 23rd low of 3.75. The entire grain market looks weak in my opinion, and the whole commodity sector looks weak in my opinion. Traders are awaiting next week's USDA crop report which will show actual planting which will send more volatility into this market. The 2017 crop is off to an excellent growing season and unless some extremely hot & dry weather comes upon us in the month of July this market will continue to grind lower for the rest of 2017. However, at the current time, I am not recommending a short position so avoid this market in the near future as the chart structure is poor.
TREND: LOWER
CHART STRUCTURE: POOR

Soybean Futures

Soybean futures in the November contract which is considered the new crop & is currently being grown in the Midwestern part of the United States settled last Friday in Chicago at 9.50 a bushel while currently trading at 9.16 down about $0.45 for the week and trading lower 4 out of the last 5 trading sessions. At the present time I am not involved in this market , but I am recommending a short position in soybean meal which is highly correlated as prices are trading under their 20 and 100-day moving average telling you that the trend is lower. I think prices could retest the February 2016 low around 8.50 as growing conditions are outstanding at present. We continue to have above average rain and below average temperatures which helped this crop get off to an excellent start, and it could produce another record crop, therefore, pushing supplies to another record. There is nothing bullish about the soybean complex at this time. If you are short this market stay short & place the proper stop loss risking 2% of your account balance on any given trade as I still think lower prices are ahead.
TREND: LOWER
CHART STRUCTURE: POOR

Sugar Futures

Sugar futures in the October contract are trading at 13.16 a pound continuing its bearish momentum this week as the soft commodities are weak across the board. I think the whole sector continues to head lower as sugar prices have now hit a 16-month low. Sugar prices are trading far under their 20 & 100-day moving average as this trend has been strong over the last six months. I do think prices are going to retest the February 22nd 2016 low of 12.45 & if that is broken I believe that we can retest the August 24th 2015 low of 10.13 as overproduction coupled with the Brazilian Real which seems to tumble on a daily basis continuing to put pressure on this commodity. The agricultural commodities including the grain market all look weak across the board including the energy sector which is hitting another fresh low. Sugar is used as a bio diesel and many times can follow prices of crude oil as that market also looks to head sharply lower. If you are short, continue to stay short as who knows how low prices can go. I'm certainly not going to recommend any bullish position as that would be counter-trend trading, and I do not think a bottom has formed yet.
TREND: LOWER
CHART STRUCTURE: POOR

Coffee Futures

Coffee futures in the September contract settled last Friday in New York at 125.95 a pound while currently trading at 123.10 down around 300 points for the trading week experiencing extremely high volatility in the last two trading sessions. Friday afternoon we are up over 600 points after making a new yearly low in Thursday's trade. I'm currently not involved in coffee as I'm not convinced that the short-term bearish trend is over. I think today's trading action was significant short covering due to oversold conditions and as I have talked about in many previous blogs, I will not take a short position in this market because the volatility will be to the upside. Coffee is in the midst of a frost possibility in the country of Brazil which is the largest producer. However, the chances are slim to none that it will occur in 2017 and that is why prices have headed lower. The soft commodities still remain very bearish because the Brazilian Real continues to hover near all-time lows against the U.S dollar which is devaluating anything grown in that country. I still think there's a chance prices can go to 105/110 as a possible bottom which still could take a couple more weeks.
TREND: LOWER
CHART STRUCTURE: POOR

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.