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 at 1,297 an ounce while currently trading at 1,286 down a little over $10 for the trading week. The sell-off is due to several factors including the 10-year notes now yielding 2.30% which is a fundamental bearish indicator towards the precious metals coupled with the fact that the U.S. dollar has now hit a 5-week high putting pressure on the precious metals here in the short term. Gold prices are trading under their 20-day moving average and right at their 100-day testing major support around the 1,275 level. I am currently not involved in any of the precious metals as this market remains in a seesaw pattern. Gold prices had rallied earlier this month due to major tensions between North Korea and the United States, and I don't think that situation is going away anytime soon, but things have settled down, and that is why are also seeing a selloff in the bond market. The flight to quality has come to an end at least here in short-term so look at other markets that are beginning to trend with a better risk/reward scenario at the present time.
TREND: CHOPPY - LOWER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the November contract are currently trading lower by $0.5 at 51.55 a barrel. I have been recommending a bullish position from the $51 level & if you took that trade continue to place the stop loss under the 10-day low which now stands at 49.68 as the chart structure is outstanding. Oil prices are still right near a five-month high has demand has come back into this market despite the fact that the entire energy sector is lower across the board today blamed on profit-taking as the trends are clearly still to the upside as prices are above their 20 and 100-day moving average. The next major level of resistance is around the 52.50 level & if that is broken on a closing basis, I still think we could retest the 55 level which was hit on April 12th as the momentum is still higher despite today's trading action. Many of the commodity sectors remain extremely sideways and choppy which has been frustrating in 2017 as in years prior we had some terrific trends to the upside & the downside. Mathematically speaking trends will come back & they will come back with a vengeance in my opinion & I do believe it will be to the upside.
TREND: HIGHER
CHART STRUCTURE: SOLID

Cotton Futures

Cotton futures in the December contract settled last Friday in New York at 68.46 while currently trading at 68.81 up slightly for the trading week stuck in a tight 2-week nonvolatile trading manner looking for some fresh fundamental news to dictate short-term price action. I'm not involved in cotton as this market has been relatively choppy over the last several months spiking above the 75 level due to Hurricane Harvey then plunging right after that as there was very little damage done to the cotton crop in the southern part of the United States. As we await the USDA crop report which is still about two weeks away, Cotton prices are still trading under their 20 and 100-day moving average as the short-term trend is lower. However, if you take a look at the daily chart, there is major support between 66/68 and I have a hard time believing prices will crack that level unless some surprising bearish number comes about off of that report. We already are expecting a huge crop as the harvest is in full swing & should wrap up in the next several weeks as the U.S. dollar hit a five-week high this week also keeping a lid on prices and keeping volatility low.
TREND: LOWER
CHART STRUCTURE: SOLID

Cocoa Futures

Cocoa futures in the December contract is currently up 50 points at 2030 after settling last Friday at 1983 up about 50 points for the trading week. I have been recommending a bullish position from the 2010 level and if you took that trade continue to place the stop loss at 1944 & in Monday's trade that will be raised to 1960 as the chart structure is outstanding because prices have been grinding higher. Cocoa prices are right near a 7-week high, but for the bullish momentum to continue, we have to break the September 22nd high of 2047. If that does occur, I think we're headed above the 2100 level as prices are still trading above their 20 & 100-day moving average telling you that the trend is to the upside. Cocoa is my only recommendation out of the soft commodities as there has been a lot of sideways action. However, we're headed into the strong demand season as the risk/reward are still in your favor, so continue to play this higher while placing the proper stop loss and if you did not take the original trade wait for some price retracement before entering.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

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.

Coffee Futures

Coffee futures in the December contract are currently trading at 128.00 after settling last Friday in New York at 134.45 as this market has been a real roller coaster trading from 127 all the way up to 143 in 2 weeks and then from 143 down to 128 in 2 weeks straight up and straight down. I'm currently sitting on the sidelines waiting to enter into some type of bullish position. The chart structure in coffee is poor due to extreme choppiness as we are still trading under the 20 and 100-day moving average with major support around the 127 level and if that is broken, we could test the June 22nd low of 119. I will not take a short position as I have stated in many previous blogs as I think the downside is very limited. Weather conditions in Brazil are ideal as we will start focusing on next year's crop as volatility has been relatively high which is a good thing to see. You had to remember in 2014 we suffered a drought sending prices sharply higher in a matter of weeks as the weather will be the primary factor determining where prices go in the months ahead. However, avoid this commodity at the current time.
TREND: CHOPPY - LOWER
CHART STRUCTURE: SOLID

Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 4.49 a bushel while currently trading at 4.57 up about 8 cents for the trading week as traders are awaiting the crop report which will be released this afternoon which could send volatility back into this market. Wheat prices are trading above their 20-day but still slightly below their 100-day moving average which now has dropped down to 4.70 which is a critical level in my opinion as there are concerns about dry weather conditions in the Great Plains which has pushed prices up methodically over the last several weeks. I have been recommending a bullish position from the 4.50 level & if you took the trade continue to place the stop loss at 4.35 which is the two-week low & in Monday's trade will be raised to 4.44. The chart structure is outstanding due to very low volatility despite the fact that we are entering the volatile seasonal time for wheat. If you take a look at the daily chart, there is still room to run to the upside especially if some type of bullish number comes out today or if we get any type of weather situation as prices were near $6 in July. I still think wheat looks cheap at the present time. Continue to play this to the upside while placing the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Soybean Futures

Soybean futures in the November contract are up $0.14 this Friday afternoon reacting positively off of the USDA crop report. However, prices settled last Friday in Chicago at 9.84 and are still down about $0.10 for the trading week. I have been recommending a bullish position from around the 9.85 level & if you took the trade continue to place the stop loss under the 10-day low on a closing basis at 9.55 as the chart structure is excellent. Soybean prices are still trading slightly above their 20 and 100-day moving average as the trend is higher. However, it's mixed due to the decline in prices as the harvest is around 20% complete in the United States as we should produce another record crop of 4.4 billion bushels as today's rally was based on profit-taking and short covering in my opinion. I am also recommending a bullish position in soymeal which is sharply higher in today's trade. I do think that the grain complex, in general, is in a bottoming process and should move higher especially if we see any production cuts off the USDA crop report which will be released in 2-weeks. We have been incredibly dry in the Midwestern part of the United States with record temperatures, so stay long and continue to play this to the upside as I do think we can crack $10 possibly in next weeks trade.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Soybean Meal Futures

Soybean meal futures in the December contract settled last Friday in Chicago at 319 while currently trading at 314 down about 500 points for the trading week reacting positively off of the crop report which was released Friday afternoon. I have been recommending a bullish position from the 313 level & if you took the trade continue to place the stop loss under the 10-day low standing at 307 as the chart structure is very tight. Soymeal prices are still trading above their 20-day & slightly below the 100-day moving average, and I still believe the soy complex moves higher. I also have a bullish recommendation in soybeans at the current time as they are up 9 cents in a quiet trade and if you have not taken the trade the risk/reward is still in your favor. The risk is around $700 per contract plus slippage and commission which is relatively low for such a volatile commodity. Harvest is in full swing in the Midwest which should be around 20% complete over the weekend as dry weather is pushing the combines onto the field rather quickly. We're still looking to produce 4.4 billion bushels which is another record crop for soybeans which directly influences soymeal prices. I think all of the bad news has already been reflected so continue to play this to the upside.
TREND: HIGHER
CHART STRUCTURE: EXCELLENTG

Trading Theory - Double Top

The double-top pattern is found at the peaks of an upward trend and is a clear signal that the preceding upward trend is weakening and that buyers are losing interest. Upon completion of this pattern, the trend is considered to be reversed and the security is expected to move lower.

The first stage of this pattern is the creation of a new high during the upward trend, which, after peaking, faces resistance and sells off to a level of support. The next stage of this pattern will see the price start to move back towards the level of resistance found in the previous run-up, which again sells off back to the support level. The pattern is completed when the security falls below or breaks down the support level that had backstopped each move the security made, thus marking the beginnings of a downward trend.