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 20 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.

Crude Oil Futures

Crude oil futures in the November contract settled last Friday in New York at 50.44 a barrel while currently trading at 50.50 primarily unchanged for the trading week which is a rare occurrence as this is a very volatile commodity. I will be recommending a bullish position if prices close above 50.88 while then placing the stop loss under the 10-day low standing at 48.28 risking around $1,300 per mini contract plus slippage and commission. Oil prices are right at a 15-week high trading above their 20 and 100-day moving average telling you that the short-term trend is higher with heating oil hitting another contract high in today's trade while unleaded gasoline continues to remain firm. I am bullish the entire sector across the board. The chart structure in crude oil is excellent due to low volatility, and we could be involved in a bullish position at Friday's close so keep a close eye on this market as I think the commodities, in general, are moving higher as the bearish trends have finally come to an end in my opinion.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Natural Gas Futures

Natural gas futures in the November contract settled last Friday in New York at 3.08 while currently trading at 3.02. I have been recommending a bullish position when prices broke out of a 14-week consolidation around the 3.20 level and if you took the trade continue to place the stop loss under the 10-day low which stands at 2.96 as the chart structure is excellent due to low volatility. Natural gas prices are now trading under their 20 and 100-day moving average as Thursday's trade sent prices down about 12 points. However, I will continue to place the proper stop loss as I'm still bullish the energy sector across the board. Sometimes there are unique situations that develop and that was the main reason why I took this trade. A 14-week break out of the major consolidation does not occur very often in my opinion and that trade that should always be taken, but at the current time we are down on this trade, but over the course of time, the probabilities and the risk/reward are in your favor.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 15.17 a pound while currently trading at 14.64 down over 50 points for the trading week. I have been recommending a bullish position from around the 15 level & if you took the trade continue to place the stop loss on a closing basis under the 10-day low of 14.36 as the chart structure is outstanding. Sugar prices are trading right at their 20-day but still below the critical 100-day moving average which stands at 15.26. I still think higher prices are ahead, so place the proper stop loss as we are only about 30 points away as the chart structure was outstanding when the trade was initiated last Friday. I'm still bullish the soft commodities and commodity markets in general. Crude oil prices are right near a 15-week high coupled with the fact that the rest the energy sector continues to remain strong I think that will start to support sugar prices as they are used as biodiesel. We need some fresh fundamental news to dictate short-term price action as we have been stuck in the mud over the last 4-weeks with very little volatility.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Silver Futures

Silver futures in the December contract settled last Friday at 17.63 an ounce while currently trading at 16.99 at a 3-week low. I'm currently not involved in this commodity, and I will wait for the chart structure to improve, but I still do have a bullish bias to the upside as I think the downside is very limited. The U.S. stock market is at another all-time high as traders were awaiting the Federal Reserve's announcement on interest rates this afternoon as that will influence the precious metals and silver prices in general as North Korea did not do any nuclear tests over the previous weekend sending gold and silver prices to 3-week low. Silver is trading slightly below the 20-day moving average, but still above their 100-day which does say the short-term trend is mixed as the longer trend is still higher, but wait for the risk/reward scenario to become in your favor once again which could take a couple more weeks. I still think the U.S. dollar is headed lower and that will eventually continue to support silver prices in my opinion. At the current time I have several bullish recommendations & if you read any of my previous blogs, you understand that I am bullish the commodity markets as inflation will start to come back as global economies are improving. I'm certainly not recommending any short position in the precious metals.
TREND: 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.

Corn Futures

Corn futures in the December contract are currently trading at 3.52 a bushel after settling last Friday in Chicago at 3.54 down slightly for the week in a very nonvolatile trading manner. I'm not involved in this market, but if you are short a futures contract, I would continue to place the stop loss above the 10-day high standing at 3.59 which is just an eyelash away. Prices have gone nowhere over the last three-weeks as the harvest in full swing with estimations of it being around 15% complete after this weekend. We should produce around 14.1 billion bushels as all of the bad news has been reflected in this market, and I do think the downside is limited from today's prices. I am bullish the grain market with several recommendations to the upside at the current time. Corn is still trading below its 20 and 100-day moving average as the trend remains bearish as this is probably the weakest out of the grain market. Wheat, soybeans, and soybean meal have all started to rally in recent weeks on the perception of lower production numbers. Volatility in corn will begin to expand to the upside in my opinion once the harvest reaches about 50% which will not take much longer especially with this incredibly warm weather that we are experiencing in the Midwest.
TREND: LOWER
CHART STRUCTURE: SOLID

Soybean Futures

Soybean futures in the November contract settled last Friday in Chicago at 9.68 a bushel while currently trading at 9.78 up about $0.10 for the trading week. I will be recommending a bullish position if prices close above 9.78 while then placing the stop loss under the 10-day low standing at 9.37 risking around $0.41 or $2,100 per contract plus slippage & commission. The chart structure will improve in next week's trade & in 2 days that stop will be raised to 9.46 and in 3 days will be raised to 9.58, therefore, lowering the monetary risk as soybean prices are right near a six-week high. Soybeans are now trading above their 20 and 100-day moving average is telling you that the trend is higher with the extremely warm weather in the state of Illinois is pushing prices higher. We hit a record temperature Friday of 94° and estimates of this year's crop production number are starting to be lowered slightly; therefore, prices are moving higher. The next major level of resistance is at the $10 area. I am also recommending a bullish position in soybean meal and the wheat market as I think the grains are headed higher.
TREND: HIGHER
CHART STRUCTURE: SOLID - IMPROVING

Soybean Meal Futures

Soybean meal futures in the December contract settled last Friday in Chicago at 311.40 a ton while currently trading at 316.50 up about 500 points for the trading week. I have been recommending a bullish position from around the 313 level and if you took the trade continue to place the stop loss at 2.96 and in 2 days that will be raised to 3.05 as the chart structure is improving on a daily basis. Soy meal prices have now hit a 7-week high looking to move even higher as prices are trading above their 20 and 100-day moving average telling you the trend is strong to the upside. We have traded higher for the 3rd consecutive day due to extremely warm temperatures in the Midwest causing concerns about production numbers in 2017 as they might be lowered in next month's crop report. Soybean prices are also up $0.11, and I'm looking at a possible bullish position if they close above 9.78 in the November contract on a closing basis only. I do think the grain market is headed higher and the commodity markets in general as the giant bear markets are over with so stay long & place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Wheat Futures

Wheat futures in the December contract are trading higher for the 3rd consecutive session after settling last Friday at 4.49 a bushel while currently trading at 4.54 grinding higher and continuing its bullish momentum in my opinion. I have been recommending a bullish position from around the 4.50 level and if you took the trade place the stop loss under the 10-day low which now has been raised to 4.28. The chart structure is excellent due to very low volatility. Wheat prices are at a 5-week high with prices still trading above their 20-day moving average but slightly below their 100-day which stands at 4.72. I think that's a critical level as money managed funds are still short wheat and the grain market which could add more fuel to the fire to the upside in my opinion. I'm also recommending a bullish position in soybean meal, and I'm looking at possibly getting long soybeans as I do think the bottoms have occurred in the grain market. I think one of these days corn will start to rally to the upside as well, so continue to play this higher as the stop will be raised to 4.35 lowering the monetary risk once again.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Trading Theory

When Do You Add To Your Winning Trade? This has always been a fascinating question because it can create a situation of going from rags to riches to riches to rags in a very short amount of time. Many times I see traders abuse pyramiding or adding to positions with an utter lack of any money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse. Commodity prices can move very quickly with large gains or loses as we experienced in the 2008 crash of stock and commodity prices, so you always have to use stops and not fall in love or marry a position. My answer to this question is to only add to the trade once if that position has made you at least 1%-2% of your account balance while still having stop losses on all positions that equal 2% loss at a maximum risk. Remember your stop loses will be different on both positions because you entered those trades at a different date and price.