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 1,275 an ounce while currently trading at 1,264 down about $11 for the trading week after reacting negatively to a higher U.S. dollar hit a six week high putting pressure on silver and gold prices here in the short term. The United States lost 33,000 jobs in September due to the hurricane situation down south, but that is having minimal impact to support gold as the short-term trend is to the downside. If you take a look at the 10-year note which is now yielding 2.45% as yields continue to climb which is a negative towards precious metals prices plus tensions with North Korea have subsided over the last several weeks as money flows are coming out of gold and into the stock market once again which hit all-time highs this week. I'm advising clients to avoid the precious metals as they remain choppy with poor chart structure. Gold prices have now dropped about $100 from the September 8th high around 1,362 as this market has been incredibly choppy in 2017 as we are headed towards major support at the 1,250 level as lower prices look to be ahead in my opinion.
TREND: LOWER
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the December contract is currently trading at 16.46 an ounce after settling last Friday in New York at 16.67 down about $0.20 for the trading week right near a two month low as it continues to ride the coattails of gold to the downside here is a short term. Silver prices topped out on November 8th at 18.29 as a strong U.S. dollar higher & higher U.S. bond yields continue to hamper prices here in the short term. I'm currently not involved in this market while advising clients to avoid it. The next major level of support is at 16.25 that if that is broken, it could trade in the high 15s in my opinion as the strongest precious metal is copper which is just following the stock market to the upside as gold & silver is used as a flight to quality when problems happen worldwide. However, tensions with North Korea have subsided here in the short term, but I don't think they're going away anytime soon, and I still believe historically speaking that silver is cheap if you have a longer-term view. Prices are trading under their 20 and 100 day moving average telling you that the short-term trend is to the downside as the trend in the U.S dollar seems to be getting stronger on a weekly basis and has more room to run to the upside so look at other trends that are beginning as this market has also been very choppy in 2017.
TREND: LOWER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures are down $1.53 a barrel currently trading at 49.28 as I have been recommending a mini contract from around the $51 level and if you took the trade place the stop loss on a closing basis at 49.76. Prices last Friday in New York settled at 51.67 down about $2.30 for the week right near a 3 week low now trading below its 20 & at the 100-day moving average as the trend has become mixed. Prices were unable to crack above the 52.5 level and now we are testing the bottom end of the trading range. The U.S. dollar has hit a 6 week high, and I think that is putting pressure on oil prices as high volatility has entered the market which is a good thing in my opinion. The chart structure is still relatively solid, and we could be involved once again in a couple of weeks down the road. However, you must have an exit strategy in mind as when prices hit a two week low which is what's occurring in today's trade its time to move on. Crude oil prices have been range bound over the last six months as it looked like a breakout had occurred about two weeks ago as choppiness has been the case for many commodities in 2017.
TREND: MIXED
CHART STRUCTURE: SOLID

S&P 500 Futures

The S&P 500 in the December contract is breaking a 7-day winning streak down 6 points this past Friday afternoon in Chicago after settling last Friday at 2516 while currently trading at 2544 up about 28 points for the trading week continuing its record-breaking streak to the upside. I'm undoubtedly bullish the entire equity market. If your long a futures contract continue to place the stop loss under the 10-day low which in Monday's trade will be 2492 as that will improve on a daily basis, therefore, lowering the monetary risk as prices are still trading above their 20 and 100-day moving average as this trend is very strong. The United States lost 33,000 jobs in September blamed on massive hurricanes that we've experienced in the last month or so and even that poor number doesn't put much pressure on prices as this is a strong demand market as investors continue to buy on any price dip. As I have talked about in previous blogs if this market does not selloff in the historically bearish month of October look for much higher prices in November and December as generally speaking, we do not selloff during the holiday months. Continue to play this to the upside as who knows how high prices can go, but they are going higher in my opinion across the board.
TREND: HIGHER - MIXED
CHART STRUCTURE: POOR - 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.

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 14.10 a pound while currently trading at 13.94 down about 15 points for the week right near major support at 13.70. I'm sitting on the sidelines waiting for another trend to develop his prices remain in a choppy to a sideways pattern. Prices are trading under their 20 and 100-day moving average at present as the short-term trend is lower as large worldwide production continues to keep a lid on prices keeping volatility relatively low as we been stuck a tight range over the last several months looking for some fresh fundamental news to push prices in either direction. Historically speaking sugar prices are relatively cheap at these levels and I think the downside is very limited. However, the U.S. dollar continues to march higher, and that is negative towards all agricultural commodities at least here in the short-term. La Niña will start to enter the picture which is a weather phenomenon that can cause droughts in certain parts of Brazil as traders will keep a close eye on weather conditions over the next several months.
TREND: LOWER
CHART STRUCTURE: SOLID

Coffee Futures

Coffee futures are trading higher for the 2nd consecutive trading session up 180 points at 129.00 a pound after settling last Friday in New York at 128.05 up about 100 points for the week still right near a 14 week low as I am not involved in this market. However, I'm still looking for a possible bullish position as I will not go short as I think we are right near the bottom. There is major support around the 125 level over the last several months as traders will keep a close eye on weather conditions as La Niña which is a weather phenomenon can cause droughts in certain sections of Brazil which could send prices sharply higher over the next several months. I still think this is a sleeping giant to the upside it's just a matter of when. Coffee prices have been very choppy over the last several months with large swings to the upside and then prices seem to fall out of bed as that has been the pattern, but I do think we are bottoming out as I still think higher prices are ahead as I am waiting for better chart structure and a better risk/reward scenario before entering so keep a close eye on this market as we could be involved relatively soon.
TREND: LOWER
CHART STRUCTURE: POOR

Lean Hog Futures

Lean hog futures in the December contract settled last Friday in Chicago at 59.95 while currently trading at 62.50 up about 230 points for the trading week right near a 7 week high. I am not involved in the livestock sector as the chart structure is very poor & the monetary risk is too high at this time. Hog prices look to retest the July 5th contract high of 65.67 as a triple bottom has occurred around the 56 level and I will explain what a triple bottom is in the next blog which is a technical chart pattern that occurs from time to time. Hog prices are now trading above their 20 and 100-day moving average telling you the trend has turned to the upside as cattle prices have remained strong in recent days as well, but wait for the monetary risk to improve before entering any bullish position as trading is all about risk & nothing else. Short covering was to blame for some of this recent rally as prices have rallied about 600 points from the most recent bottom as the trend was bearish and now is bullish, but basically this trend is mixed to choppy in my opinion.
TREND: HIGHER - MIXED
CHART STRUCTURE: POOR

Soybean Meal Futures

Soybean meal futures in the December contract settled last Friday in Chicago at 315 a ton while currently trading at 318 up 300 points for the trading week holding major support around 310. If you took the original trade from the 313 level continue to place the stop loss under the 10-day low at 309.70 as the chart structure will not improve for another eight trading sessions, so you're going to have to accept the small monetary risk at this time. For the bullish momentum to continue we have to break the September 22nd high of 321 as I will be looking at adding more positions if that is breached as prices are trading above their 20 and 100 day moving average due to the exceptionally strong demand for this commodity at these relatively cheap prices so continue to play this to the upside. Soybean meal prices bottomed out on August 23rd around the 2.95 level as all of the bad news has already been reflected as we should produce a record crop of soybeans as harvest will be in full swing over the next several weeks and if there is any surprise in next week's crop report we could move significantly higher rather quickly in my opinion.
TREND: HIGHER
CHART STRUCTURE: MIXED

Trading Theory

What Is A Triple Bottom Chart Pattern? A pattern used in technical analysis to predict the reversal of a prolonged downtrend. The pattern is identified when the price of commodity creates three sell-offs at nearly the same price level. The third bounce off the support is an indication that buying interest (demand) is outweighing selling interest (supply) and that the trend is in the process of reversing.

Once the first bottom is created, the price reaches a peak and retraces back toward the prior support. This is when buyers enter again and push the price of the asset higher, creating bottom No.2. The price of the asset then creates another peak and heads lower for its final test of the support.

The final bounce off the support level creates bottom No.3 and traders will get ready to enter a long position once the price breaks above the previous resistance (illustrated by the black line on the chart). This pattern is considered to be a very reliable indication that the downtrend has reversed and that the new trend is in the upward direction.