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 1,274 an ounce while currently trading at 1,284 up about $10 for the trading week and right near a four week high. I will be recommending a bullish position if prices close above 1,290 while then placing the stop loss under the 10-day low standing at 1,269 risking $2,100 per contract plus slippage and commission as the chart structure is outstanding due to very low volatility. Gold prices are trading above their 20 & 100-day moving averages as the trend is to the upside and I am also looking at entering into a bullish silver position as the U.S. dollar is near a four week low helping push prices up here in the short term. Gold prices have gone nowhere over the last month or so with extremely low volatility, and I don't think that's going to last much longer so keep a close eye on this market to the upside. If you have been following any of my previous blogs you understand that I am bullish the commodity markets as they are very cheap compared to the U.S. stock market and I think the volatility will be to the upside not to the downside as demand will start coming back into these products.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Silver Futures

Silver futures in the December contract is currently trading at 17.08 after settling last Friday in New York at 16.87 up about $0.20 for the trading week right near a four week high looking to breakout possibly in next weeks trade. I will be recommending a bullish position if prices break the four week high which now stands at 17.27 while then placing the stop loss under the two week low standing at 16.78 risking about $2,500 on the large contract or $500 on the mini contract plus slippage and commission. The chart structure is outstanding with volatility coming to a crawl. The U.S. dollar is near a four week low, and that is helping support the precious metals at the current time & if you look at the daily chart, there is a pennant flag formation in silver which is very interesting in my opinion as a breakout is looming. If prices break 17.27, I think we will retest the October 16th high of 17.50, and I still think that before years-end we could be trading between $18/$19 an ounce. I will not take a short position in silver as I think historically speaking prices look very cheap especially with worldwide economies improving which should pick up demand for many different commodity sectors including silver.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Crude Oil Futures

Crude oil futures in the December contract settled last Friday in New York at 56.74 a barrel while currently trading at 56.50 down slightly for the trading week, but it dropped nearly $3 from the contract high that was hit in last weeks trade as the volatility has come to life. I have been recommending a bullish position from around the 53.15 level, and if you took the trade, the stop loss has now has been raised to 54.81 as the chart structure has improved tremendously because prices have gone sideways over the last two weeks. The U.S. dollar is right near a four week low as the commodity markets have come to life and I am now recommending several bullish positions including gold, silver, sugar. As I have talked about in many previous blogs, I think the commodity markets are incredibly cheap compared to the U.S. stock market which is starting to push other sectors to the upside. Oil prices are trading above their 20 and 100-day moving average telling you that the trend is higher and I still think there's a possibility that prices will be trading in the low $60 range before year-end. Continue to place the proper stop loss while risking 2% of your account balance on any given trade. It's nice to see other sectors finally joining the party to the upside as there is still a lot of room to run in my opinion.
TREND: HIGHER
CHART STRUCTURE:SOLID
VOLATILITY: INCEASING

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 March contract settled last Friday in Chicago at 3.56 a bushel while currently trading at 3.52 down about 4 cents for the trading week hitting a fresh contract low still reacting negatively off of the last USDA crop report which added nearly 300 million bushels to production numbers in 2017. I still see very little activity in this commodity for the rest of 2017. One interesting fact about corn is that there is a record short position from large money managed funds as they think prices will continue to move lower and I have to agree with them as there is very little bullish fundamental news to push prices up except for short covering. The harvest in the Midwestern part of the United States should be around 85% complete as of this weekend, and that should be wrapped up in the next two weeks. We will focus on next year as there was more disappointing news announced today with private estimates stating that there will be 91.41 million acres planted in 2018 which could produce a crop around 14.6 billion bushels which is a negative factor despite today's positive trade. Corn prices are still trading below their 20 and 100-day moving average as the trend is to the downside. However, I will not take a short position as prices are limited in my opinion as we might head down to the 3.40 level, but we are squeezing blood out of a turnip at these cheap levels.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Cotton Futures

Cotton futures in the March contract are currently trading at 69.63 after settling last Friday in New York at 69.14 up about 50 points for the week. I will be recommending a bullish position if prices close above 69.67 while then placing the stop loss under the 10-day low standing at 68.34 risking around $700 per contract plus slippage and commission. The chart structure in cotton is outstanding, and we are close to breaking out of an eight week tight consolidation as prices are still trading above their 20 and 100-day moving average telling you that the trend has turned higher as the risk/reward is in your favor. Harvest in the southern part of the United States should be around 75% complete after this weekend as that should be wrapped up in the next several weeks as we will now focus on 2018's crop as demand has come back into this commodity as that is the main reason why prices have stopped their bearish trend. The U.S. dollar is near a four week low as that will start to help the agricultural markets as exports should start to increase especially if that trend continues to the downside so make sure that you risk 2% of your account balance on any given trade as a proper money management technique.
TREND: HIGHER
CHART STRUCTURE: OUTSTANDING
VOLATILITY: LOW

Soybean Futures

Soybean futures in the January contract are currently trading at 9.76 a bushel after settling last Friday in Chicago at 9.87 continuing their bearish momentum. The grain market remains negative across the board as private estimates of next year's acres are around 89.6 million which is only slightly below 2017 which could produce another 4.4 billion bushels which is frustrating. In my opinion, we have massive supplies now & on the horizon unless some type of weather situation next year cuts yields. Soybean prices are trading under their 20 and 100-day moving average. However, the chart structure is poor, and I am currently not involved in any of the grains as prices are at major support on the daily chart. The problem with soybeans and corn is the fact that we continue to plant near-record acres year after year while producing record crops almost every single year as we did this year once again in soybeans as worldwide supplies continue to balloon. Brazil also produces a record crop every year as for the American farmer to survive we need higher prices & if we produce 4.4 billion bushels in 2018 soybean prices could be much lower from today's price levels in my opinion.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: LOW

Wheat Futures

Wheat futures in the March contract settled last Friday in Chicago at 4.49 a bushel while currently trading at 4.41 down about 8 cents for the trading week continuing its bearish momentum looking to possibly retest the October 31st low of 4.33 in the coming days ahead. I am not involved in this market, but it does look to me that lower prices are ahead as large money managed funds are heavily short wheat as they believe a bottom has not been created just yet. Prices are still trading under their 20 and 100-day moving average telling you that the trend is to the downside. Corn prices hit another contract low this week as that is also putting pressure on wheat prices as ideal weather conditions in the Great Plains of the United States could produce an excellent crop once again as there is very little bullish fundamental news to push prices higher except for short covering. Volatility in wheat is extremely low just like it is in many commodity sectors as we have entered the holiday markets with Thanksgiving is next week, and I don't see anything exciting in this commodity until 2018 arrives or unless some type of weather market develops. I think the bearish trend continues in a slow grinding manner as I am not recommending any bullish position at this time.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

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.