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.

Silver Futures

Silver futures in the March contract settled last Friday in New York at 17.03 an ounce while currently trading at 17.35 up about $0.30 for the trading week and traded as high as 17.70 in yesterday's trade before selling off. Profit-taking was to blame as that was a four-month high. I have been recommending a bullish position from around the 17.50 level and if you took that trade continue to place the stop loss under the two-week low standing at 16.73 as the chart structure will not improve for another seven trading days. You're going to have to accept the monetary risk as the volatility certainly has come back, which is a terrific thing to see in my opinion. The U.S. dollar has hit a three year low this week continuing its bearing trend which is helping support the precious metals as gold prices were also higher this week. Continue to play this to the upside, and if you did not take the original trade, I'm still recommending it at today's price level as the risk is about $750 per mini contract plus slippage & commission. Silver prices are trading above their 20 and 100-day moving average as the trend as positive as I am bullish all commodity sectors including the stock market as my only bearish recommendation is in the bond market as 2018 could see terrific trends to the upside.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

10-Year Note Futures

The 10-year note in the March contract settled last Friday in Chicago at 122/09 while currently trading at 122/09 unchanged for the week after hitting a fresh contract low in yesterday's trade at 121/31 only to rally as we are stuck in the mud at this critical level. I have been recommending two short positions from around the 123/12 level & if you took those trades, the stop loss has now been lowered to 123/05 and in Monday's trade will be lowered once again down to 123/02 as the chart structure is outstanding due to the incredibly low volatility that we are currently witnessing. The 10-year note is yielding 2.63% which is still historically low, and I genuinely believe that we will head up to the 3.50% level come year-end as the stock market is hitting another all-time high this Friday as that gravy train continues. I remain incredibly bullish the equity market as the Trump tax cuts have certainly spurred the economy for the 1st time in nearly a decade. GDP growth rates are expected to possibly hit 4% later this year and that will also influence other worldwide economies as the days of historically low interest rates are over with in my opinion. However, it would be nice to see some volatility head back into this market as I will be looking at adding more contracts to the downside if we break that 122 level on a closing basis.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Natural Gas Futures

It is rollover day in the natural gas, and I have been recommending a bullish position in the February contract from the 2.78 level, and now you have to liquidate that position because we are close to delivery at the 3.49 level then rolling over into the March contract at the 3.13 level. The stop loss on the March contract will be under the two-week low which now stands at 2.87 as the chart structure has improved. The March contract did not rally as much as the February as traders will be awaiting next week's inventory report coupled with the 7/10 day weather forecast as this market will remain highly volatile for the next couple of months. Natural gas prices are trading above their 20 and 100-day moving average as the trend is to the upside with the next major level of resistance from the 3.25 area. If that is broken, I think we can hit the contract high which was touched in the March contract on September 19th at 3.39. This still has room to run in my opinion as the entire energy sector remains very bullish. If you have any questions on how to change months, please give me a call anytime and I will be more than happy to explain the details of the process.
TREND: HIGHER
CHART STRUCTURE:SOLID
VOLATILITY: HIGH

Oat Futures

Oat futures in the March contract are currently trading at 2.65 a bushel after settling last Friday in Chicago at 2.58 up about 7 cents for the trading week having an incredibly wild trading session yesterday with a $0.20 range as we traded as high as 2.79 and then finished lower for the trading session. I have been recommending a bullish position from the 2.60 level & if you took the trade, the stop loss now has been raised to 2.49 as the chart structure will start to improve next week, therefore, lowering the monetary risk as volatility has come back into this market with a vengeance. I also have a recommendation in corn as it looks to me that we will be buying wheat on the close as the grain market has come to life as strong demand from Canada continues to push prices higher coupled with concerns about growing conditions. Oat prices are trading above their 20 and 100-day moving average as the trend clearly is to the upside, but for the bullish momentum to continue, we have to break yesterdays high of 2.79. I think if that does happen we will head into the low $3 range as this rally is not over with as yesterday was just profit-taking.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

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 is currently unchanged at 3.55 a bushel. I have been recommending a bullish position from this level & if you took the trade place the stop loss at the 10-day low standing at 3.45 as the risk is $0.11 or $550 per contract plus slippage & commission as the chart structure is outstanding. Corn has broken out of a seven-week consolidation looking to move higher with the next level of resistance at the 3.60 level, and if that is broken, I will be recommending to add more positions. The large money managed funds still have near record short positions, and I think they will start short covering, pushing prices higher as corn looks very cheap relatively speaking. Corn prices are trading above their 20-day moving average but still slightly below the 100-day which stands at 3.58. The grain market has caught fire as soybeans have now crossed the $10 level and soybean meal which is also used as a feed ingredient continues its remarkable bullish run so continue to play this to the upside as I do think a long-term bottom is at hand. I'm also recommending a bullish position in oats, and we could be involved in the wheat market if prices close above the critical 4.37 level as I am bullish the grain market and very bullish the commodity sectors as a whole.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Wheat Futures

Wheat futures in the March contract settled last Friday in Chicago at 4.22 a bushel while currently trading at 4.38 up about $0.16 for the trading week right near a seven-week high and it looks to me that wheat prices have finally ended their bearish trend. I will be recommending a bullish trade if we close above the critical 4.37 level while then placing the stop loss under the two-week low standing at 4.13 risking around $0.24 or $1,200 per contract plus slippage and commission as the chart structure will start to improve on a daily basis starting next week. Wheat prices have traded higher for the third consecutive session as there are concerns in the southern part of the Great Plains that are having a lack of moisture at the current time. We also experienced a drought last summer, and that certainly could spark prices to the upside so play this higher as I still think the volatility will increase tremendously in the weeks ahead. Wheat prices are trading above their 20-day moving average but slightly below their 100-day which stands at 4.43 as you have to remember that the large money managed funds are still heavily short corn and wheat as I think short covering alone could push prices up in the weeks ahead.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cocoa Futures

Cocoa futures in the March contract is currently trading at 1993 after settling last Friday in New York at 1931 up about 60 points for the trading week. I have been recommending a bullish position from around the 1990 level and if you took the trade continue to place the stop loss which now has been raised to 1901 as the chart structure is outstanding. For the bullish momentum to continue, we have to break the January 18th high of 2011 and if that does occur I think we can head back up to the 21/22 level rather quickly. It does look to me that a bottoming formation has taken place as the U.S. dollar continues with its bearish trend this week hitting a fresh three-year low. Cocoa prices are trading above their 20-day moving average but slightly below their 100-day which now stands at 2011 which is also critical resistance, and I still think the commodity markets across the board are headed higher. At the present time, I only have one other soft commodity recommendation which is in cotton, but I'm also keeping a close eye on orange juice and coffee. The volatility in cocoa has started to increase which is terrific, but I don't think we have seen anything yet as historically speaking this commodity can have crazy price swings on a daily basis especially if political unrest happens in West Africa so stay long & continue to place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

Coffee Futures

Coffee futures in the March contract settled last Friday at 121.25 a pound while currently trading at 125.00 up about 375 points for the trading week with a possible rounding bottom taking place on the daily chart. I am currently sitting on the sidelines waiting for a bullish trend to develop as I will not go short as the downside is very limited. Coffee prices are right at a two-week high now trading above their 20-day moving average but still below their 100-day which stands at the critical 128.50 level, which is also acting as major resistance. I think that could be tested in next week's trade as all of the fundamental bad news has already been reflected into the price. Growing conditions in Brazil are ideal, and it looks like they will produce an excellent crop, but the commodity markets, in general, continue to creep higher due to the U.S. dollar falling out of bed in 2018 and hitting a three-year low. I think that trend continues as that will bolster commodity prices including coffee so look to play this to the upside in my opinion. The chart structure in coffee is starting to improve on a daily basis as I will look for a four-week high before entering into a new position so we probably will not be involved for a couple more weeks once the risk/reward become in your favor.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Sugar Futures

Sugar futures in the March contract are currently trading higher by 10 points at 13.34 a pound in a relatively quiet trading session in New York this Friday afternoon, and I'm now sitting on the sideline's in this market as I do think prices historically are low. There is very little bullish fundamental news to push sugar prices higher except for a weak U.S. dollar which is sharply lower once again today hitting a three-year low coupled with the fact that the commodity markets are starting to rally. But sugar has two major problems at hand which include oversupply and a lack of demand. Sugar is trading under the 20 and 100-day moving average as the trend is to the downside, but I will not take a short position. I will just sit on the sidelines and wait for some type of consolidation before entering into a bullish position as ethanol remains strong and with crude oil hitting another contract high today as you would have to think that the downside is limited in sugar prices. At the present time, I have two soft commodity recommendations which include cotton and cocoa as I am keeping a close eye on orange juice and the possibility of the coffee market finally bottoming after a six-month bearish trend.
TREND: LOW
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

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.