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 December contract settled last Friday in New York at 1,294 while currently trading at 1,306 up about $12 for the trading week breaking the critical 1,300 level now looking to retest the April 17th high of 1,307 as this bullish trend remains intact in my opinion. I'm currently not involved in gold, however, if you do have a bullish position continue to place the stop loss under the 10-day low standing at 1,257. The chart structure will start to improve over the next couple of days, therefore, lowering the monetary risk as low-interest rates in the United States continue to help push up the precious metals here in the short-term. A major terrorist attack in Spain on Thursday is also helping push prices higher as the world is on alert for more attacks in the coming weeks. Prices are trading above their 20 and 100-day moving average telling you that this trend is to the upside with the next major level of resistance all the way at 1,350 which was touched in last November during the U.S election. At present my only precious metal recommendation is still a bullish position in the copper market, but it looks like higher prices are ahead across the board.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures in the September contract is currently trading at 17.28 an ounce after settling last Friday in New York at 17.12 up about $0.16 in a very volatile week reversing steep losses earlier in the trading week only to rally right near recent highs. If you are long a futures contract, I would place the stop loss under the 10-day low which now has been raised to 16.20 as that will start to improve on a daily basis next week, therefore, lowering the monetary risk as the chart structure is starting to improve. Silver prices have now hit eight-week highs and are mirroring the gold market as low-interest rates in the United States continue to push the precious metals higher. The 10-year note is now yielding 2.18% and it looks to go even lower in my opinion as there as there is so much uncertainty worldwide at present. Money flows are starting to come back into the silver and the precious metals. If you take a look at the daily chart it certainly looks like a spike bottom at 15.14 was created on July 10th and ever since that occurred prices have been in a slow grind higher as it would not surprise me to see silver prices back up in the low 20s eventually. I still think historically speaking silver looks cheap at these levels and has held major support at the 15 level over the past year.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Copper Futures

Copper futures in the September contract settled last Friday in New York at 2.9120 a pound while currently trading at 2.94 up about 300 points for the trading week as we have to roll out of the September into the December contract as expiration is upon us. I have been recommending a bullish position from around 2.71 and if you took the trade continue to place the stop loss now in the December contract at 2.8935. The chart structure is outstanding at present as copper hit another yearly high in yesterday's trade. This market remains bullish, and I think 300 will be cracked in next weeks trade. There has been extreme volatility in the stock market over the last several days creating volatility in copper which has ridden the coattails of a strong U.S. economy and strong physical demand of copper due to a very bullish housing market. Continue to play this to the upside. I still think there is room to run possibly up to 3.30 level in the weeks ahead as this has been one of the strongest trends over the last several months coupled with excellent chart structure, therefore, lowering the monetary risk for such a large and volatile commodity.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Crude Oil Futures

Crude oil futures in the October contract settled last Friday in New York at 48.97 a barrel while currently trading at 48.57 up about $0.40 for the trading week rallying about $1.30 in today's trading session as prices hit a four week low in yesterday's trade. At present, I'm not involved in the crude oil as this market remains choppy & has had a tough time cracking the $50 level. I think sideways action probably is still at hand as prices are trading slightly above their 20-day but right at their 100-day moving average. I'm avoiding the energy sector at the current time. Volatility in oil is relatively low despite today's trading action as rig counts in the United States continue to increase on a weekly basis as we are producing more and more every month which is a good thing in my opinion. We are relying less on Middle Eastern oil as that is why we are experiencing lower volatility as price spikes just don't occur anymore like they used to. At the current time, I only have two recommendations with bullish trades in copper and orange juice as there is a lot of choppiness as that has been the case in 2017, but I've been doing this for nearly 25 years & patience is the key as the trends will come back in bunches.
TREND: MIXED
CHART STRUCTURE: SOLID

Natural Gas Futures

Natural gas futures in the October contract settled last Friday at 3.00 while currently trading at 2.94 down about 6 points for the trading week slightly lower this Friday afternoon. I'm currently sitting on the sidelines waiting for a trend to develop. Gas prices bottomed out on August 4th around 2.79 and prices have gone sideways over the last eight weeks trading in a consolidation that eventually will be broken as were starting to enter the volatile winter season which can push prices up rather dramatically. At the current time the trend is mixed as we are trading slightly above their 20-day moving average but still below their 100-day so avoid this market, but keep a close eye on this as the volatility certainly will expand starting in October. Very mild weather conditions in the Midwestern part of the United States continue to keep a lid on prices as this has been one of the mildest Augusts I can ever remember in Illinois with every day being between 75/80° which is way below normal. August is the hottest month of the year seasonally speaking. If you take a look at the monthly chart, you will see some tremendous spikes to the upside which generally can occur December through February as I think we're setting up that type of scenario once again so keep this market on your radar as I think the downside is limited.
TREND: MIXED
CHART STRUCTURE: SOLID

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.

Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 4.67 a bushel while currently trading at 4.42 dropping another $0.25 this week while trading lower for the last six days and now has dropped a $1.50 from the July 5th high of 5.92. This market remains extremely bearish in the short term. Wheat prices have hit a contract low this week hitting a new yearly low due to weak demand & large worldwide supplies with improving crop conditions putting pressure here in the short-term. I'm certainly not recommending any bottom fishing as who knows how low prices can go and I'm currently not involved as the chart structure is poor and the monetary risk is too high to enter into a short position. The grain market, in general, continues to head lower as the USDA crop report that was released last week sent shock waves through the whole sector because the crops had performed much better than expected. The winter wheat crop currently is finished with harvest & seasonality speaking that generally creates a bottom. However, wait for some type of chart pattern to develop before looking at any type of bullish position as catching a falling knife can be very dangerous.
TREND: LOWER
CHART STRUCTURE: POOR

Corn Futures

Corn futures in the December contract are trading at 3.66 lower by 8 cents for the trading week continuing its bearish momentum. I'm currently not involved in this market, but I do think prices are headed lower as outstanding weather conditions persist and this crop should improve on the next USDA crop report. Corn prices are trading under their 20 and 100-day moving average is looking to retest the August 31st, 2016 low around 3.58 & if that is broken we could go all the way down to the $3.20 level over the course of time especially when harvest begins. I think there is the possibility of 14.5 billion bushels being produced which is higher than expectations as this market remains very defensive in my opinion. The whole grain market in general looks extremely weak as soymeal hits another contract low while the wheat market has completely fallen out of bed & goes down on a daily basis as who knows how those prices can go, but do not get involved on the long side in the grain sector as clearly the trends are negative as I am also very negative soybean prices which I still think have further room to run to the downside.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Orange Juice Futures

Orange juice futures in the November contract settled last Friday in New York at 134.65 while currently trading at 136.00. I recommended a bullish position from around the 138.60 level while placing the stop loss under the 10-day low which stands at 130.50 as the chart structure is outstanding at present. If you did not take the original recommendation, I'm still recommending it at today's price level where the risk is around $900 plus slippage & commission as prices bottomed out in my opinion on July 20th around 126.90. We are entering the hurricane season which generally sends huge volatility into the orange juice market. Juice prices are trading above their 20-day but still under their 100-day moving average which stands at 141.30 with prices near a six week high. That was the main reason why I recommended the trade was the fact that the risk/reward was in your favor in my opinion as orange juice can have large daily price swings as we are heading into the volatile autumn and winter months.
TREND: HIGHER - MIXED
CHART STRUCTURE: EXCELLENT

Live Cattle Futures

Live cattle futures in the October contract is trading lower for the 3rd consecutive trading session after settling last Friday in Chicago at 107.40 while currently trading at 105.75 in an extremely volatile trading week. I am currently not involved as I missed two opportunities to get short, but was unable to get executed. I remain bearish cattle prices here in the short term. I think cattle will retest the February 2016 lows of around 100 as we are currently trading at four-month lows trading far below their 20 and 100-day moving average telling you that this trend is to the downside. I'm also bearish the hog market as the livestock sector seasonally speaking declines during August and September, and I'm certainly not recommending any bullish position. If you are short a futures contract place the stop loss above the 10-day high which now stands at 111.57 as the chart structure is poor because prices have dropped rather dramatically in recent days. I still don't see a bottom at this time as this trend is getting stronger on a weekly basis so stay short place the proper stop loss while risking 2% of your account balance on any given trade.
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.