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 hit a 2 month low currently trading at 1,215 an ounce after settling last Friday in New York at 1,242 down over $25 for the trading week continuing its bearish trend breaking the May 9th low of 1,217 as it looks to me that prices as I've stated in previous blogs prices are headed towards the 1,200 level. The monthly employment number came out today stating that we added 220,000 new jobs sending the stock market higher once again as money flows continue to come out of the precious metals & into the equity market. I think this trend will continue with the possibility that we will retest the January 5th low around 1,189 as this market is getting stronger to the downside on a weekly basis. Gold prices are trading under their 20 and 100-day moving average telling you that the short-term trend is lower as silver and platinum prices continue to move lower as well. The trend is your friend in the commodity markets and if you are short stay short & place the proper stop loss as I see no reason to own gold at the current time. The U.S dollar is near a 10 month low coupled with major problems with North Korea, however that is still not able to support gold as that tells you how weak this market actually has become.
TREND: LOWER
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the September contract are lower by about $0.55 this Friday afternoon currently trading at 15.45 an ounce hitting a 15 month low after settling last Friday at 16.62 down about $1.20 for the trading week and trading lower 5 out of the last 6 trading sessions as the precious metals remain on the defensive. In my opinion it looks to me that prices will retest the March 2016 low around 14.78 as all the interest is in the stock market as we added another 220,000 jobs as the monthly employment report was released sending the stock market sharply higher and the precious metals sharply lower as this trend is for real to the downside. Silver prices are trading far below their 20 & 100-day moving average telling you this trend is lower and is getting stronger on a weekly basis as I see no reason to own any of the precious metals at the present time. Volatility in silver has certainly expanded over the last week as we've had two 50 cent down days with larger volume than normal which is not a good sign if you're bullish as I'm certainly not recommending any type of bullish position as catching a falling knife can be very dangerous and if you are short stay short as you are on the right side of this trade.
TREND: LOWER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the August contract settled last Friday in New York at 46.35 a barrel while currently trading at 44.75 down about a $1.60 for the trading week despite the fact that this week's EIA report showed a 6.3 million barrel draw down as the short-term and longer-term trend remains weak. The United States continues to increase production, and that is the main problem as the Trump administration wants to become a major exporter. I'm not involved in oil, but I still have a bearish bias to the downside as prices are still trading under their 20 and 100-day moving average telling you the trend is lower as there were rumors that Russia might be against production cut sending prices lower to end the trading week. The commodity markets, in general, remain choppy and this is not the same oil market from 10-years ago with the U.S. changing the dynamics as we continue to produce more and more. It looks to me that production will increase over the next several years as OPEC is not nearly as powerful as they used to be which is a good thing for U.S. security. I still think prices will test the contract low which was hit on June 21st around $42 in the coming weeks.
TREND: LOWER - MIXED
CHART STRUCTURE: IMPROVING

Sugar Futures

Sugar futures in the October contract currently are trading at 13.90 a pound while settling last Friday in New York at 13.81 basically unchanged for the trading week and hovering near a 4 week high after bottoming out on June 28th at 12.74 as a possible new trend to the upside could be developing. Sugar prices are now trading above their 20-day moving average of the 1st time in several months, but still far under their 100-day moving average which stands at 15.90 as this market remains mixed and I am sitting on the sidelines waiting for a fresh trend to develop. The agricultural sector across the board including the grain market is moving higher as the bear markets finally might be over. I will wait for the chart structure to improve as volatility is relatively low as we could be involved in this market to the upside in next week's trade so keep a close eye on sugar. All of the bad news in the soft commodities has already been reflected in price as coffee, orange juice, and sugar prices have all rallied off of recent lows as the long-term bearish trend might have come to an end.
TREND: MIXED
CHART STRUCTURE: IMPROVING

Coffee Futures

Coffee futures in the September contract are trading right near a three-week high after settling last Friday in New York at 125.35 a pound while currently trading at 128.80 up about 300 points for the trading week. Coffee is now trading above its 20-day moving average, but still below its 100-day which stands at 136.60 as the trend remains mixed. I am keeping a close eye on this market to the upside as the agricultural sectors have all come alive as it looks to me that short-term bottoms are in place as the chart structure is starting to improve with the 10-day low standing at 123.30. It will improve on a daily basis as the spike bottom which happened on June 22nd at 115.50 looks to be the short-term low in my opinion. Volatility in coffee has come to a crawl once again which is a good thing therefore lowering the monetary risk as all of the bad news has already been priced into coffee & many of the soft commodities so keep a close eye on this for a bullish position possibly in next week's trade as this sleeping giant will awaken once again just like what happened in the grain market.
TREND: MIXED
CHART STRUCTURE: SOLID - 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 3.92 a bushel while currently trading at 4.06 up about $0.14 for the trading week all due to weather problems in the Western part of the Midwestern part of the United States. The grain market has caught fire to the upside on drought concerns. Private estimates for production are around 14.2 billion bushels which is an outstanding crop as here in the state of Illinois some crops are 5 feet tall while others are 2 feet tall as there is a huge divergence at this time so what is developing is traders are putting a price premium into the market as we still have a long growing season ahead. Corn prices are trading above their 20 and 100-day moving average possibly creating a double top at 4.09, but it looks to me that higher prices are ahead. I certainly think the downside is very limited and I will not take a short position in this market as the volatility certainly will continue to expand as we will see what Monday brings. Wheat prices have certainly propelled corn prices higher coupled with the fact that soybeans and soybean meal also hit recent highs as the trends across the board are higher at this time.
TREND: HIGHER
CHART STRUCTURE: SOLID - IMPROVING

Cotton Futures

Cotton futures in the December contract settled last Friday in New York at 68.59 while currently trading at 68.80 basically unchanged for the trading week as I have been recommending a bearish position from the 71.85 level getting stopped out in today's trade at 68.70 as prices have now hit a 2 week high so it is time to move on and look at other markets that are beginning to trend. Cotton prices have traded higher for the 3rd consecutive day bottoming out around the 66 level as the agricultural markets especially the grain market have surged to the upside as prices are now trading above their 20-day moving average but still far below their 100-day which stands at 71.71 as this trend remains mixed. Weather conditions in the southern part of the United States are still ideal, however we are having problems in some of the Western states as there could be a hot & dry dome entering certain cotton growing regions as that is why we are seeing the price rally, but only time will tell see if it truly does develop as this market is consolidating the recent downdraft in prices which was rather steep.
TREND: MIXED
CHART STRUCTURE: SOLID

Wheat Futures

Wheat futures in the September contract is trading higher by 3 cents at 5.42 a bushel after settling last Friday in Chicago at 5.26 up about $0.16 for the trading week in an extremely volatile and wild trading manner as this volatility will continue to explode over the next couple of months due to a massive drought in the Dakotas and the state of Montana as the Minneapolis spring wheat crossed over $8.50 as this trend remains very strong in my opinion. If you take a look at the daily chart there is a price gap around the 5.25 level as that concerns me as I think that could possibly be filled as prices traded as high as 5.74 earlier in the week all due to the fact that crops look absolutely terrible in certain states as there has been very little rain across the board. Wheat prices are trading far above their 20 and 100-day moving average as they are dragging up the rest of the grain market as soybeans, soybean meal, and corn are all hitting new highs as there are major concerns about production. However, if the rains come back into town prices will move lower as this is an extremely risky trade, but if you are long the wheat market stay long as the trend is higher as the 7/10 day forecast has very little rain in sight with hotter temperatures coming about.
TREND: HIGHER
CHART STRUCTURE: POOR

Soybean Futures

Soybean futures in the November contract is currently trading higher by 14 cents at 10.13 a bushel up 9 straight trading sessions rallying over a $1.00 during that stretch as a bullish USDA crop report which was released last Friday coupled with the fact that the good/excellent crop rating dropped to 64% spurring prices higher. If you take a look at the daily chart there is a price gap that was created on July 3rd around the 9.60 level and I think that will be filled as this is strictly a weather market & if rains come into the Midwestern part of the United States, lower prices come about. However, if hot and dry weather conditions persist you will see this market rally substantially higher. Soybean prices are trading above their 20 & 100-day moving average as this bear market turned on a dime & now turned bullish. I'm not involved as the chart structure is terrible at the present time. However, I am not convinced of higher prices as we planted nearly 90 million acres and could still produce a record crop. The wheat market has rallied substantially over the last couple weeks as that has helped propel corn and soybean prices higher so keep a close eye on the 7/10 day weather forecast as average temperatures and rain are predicted.
TREND: HIGHER
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.