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 April contract settled last Friday in New York at 1,324 an ounce while currently trading at 1,317 down about $7 for the trading week near a two week low. I'm not involved in this commodity, however, I am looking for a possible short position in next week's trade once the chart structure improves. In my opinion gold prices could retest the March 1st low of around 1,303 as we are now trading under their 20-day moving average, but still above their 100-day moving average as this market remains choppy to sideways in the short-term. The U.S dollar looks to have bottomed out and that would be a negative towards the precious metals as silver remains very weak as well as the commodities, in general, have turned negative due to the Trump tariffs which are rattling the markets as we are worried about repercussions coming out of China sending prices lower. Volatility in gold remains relatively low as a double top looks to have been created around the 1,365 level so look to play this to the downside. I think the path of least resistance is to the downside, but wait for the risk/reward to become in your favor; however, I am certainly not recommending a bullish position.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY:INCREASING

Silver Futures

Silver futures in the May contract finished down 35 cents this week at 16.26 an ounce as this market continues to flip-flop on a daily basis continuing its sideways to choppy trend here in the short term. I'm looking at a bullish position if prices crack the five week high standing at 17.03 which is about $0.50 away and generally speaking, could happen in 1 day, but the volatility is so low in this commodity it's astounding. Silver prices are now trading under their 20 and 100-Day moving average which stands at 16.83 as the chart structure is excellent. I do believe prices bottomed out over the last couple months around the $16 level as I am not going to take a short position as I do think the downside is very limited. The U.S. dollar has also been extremely choppy as we have been trading in a very tight trading range over the last several months still near a three year low. We need some fresh fundamental news to push prices higher as inflation is still very low. However, expectations are that will increase but it just hasn't happened as of yet. I do not have any precious metal recommendations as the entire sector remains choppy, but I do think silver prices will still trade in the $20 range come year-end, and I believe demand will come back into silver. The precious metal sector as worldwide growth and especially in the United States will spur demand in my opinion.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Natural Gas Futures

Natural gas futures in the May contract settled last Friday in New York at 2.75 while currently trading at 2.71. I've been recommending four mini contracts with an average price of 2.70 and if you took those trades the stop loss on the closing basis is at 2.69 as we could be out of this market on the close today. Natural gas prices have been stuck in the mud as we have gone nowhere as we did hit a five week high earlier in the week around the 2.82 level and for the bullish momentum to continue we have to break that when it was first initiated. Cold weather in the Midwest has not pushed up prices which is a little surprising as many of the commodity sectors continue their bearish trends over the last several weeks as volatility remains incredibly low for this commodity. I still think historically speaking prices look cheap, but if we are stopped out this will primarily be a break-even trade & we will move on and look at other trends. The chart structure in natural gas is outstanding as we still could be involved in another trade down the road relatively soon as the risk/reward is still in your favor. Volatility will expand to the upside come summertime especially if some type of heat wave persists for a long period so place the proper stop loss and let's see what the rest of the day brings.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY:LOW

10-Year Note Futures

The 10-year note in the June contract is currently trading at 120/10 after settling last Friday in Chicago at 120/01 up about nine ticks for the trading week. I'm currently sitting on the sidelines with a bearish bias to this market as we are stuck in a five week consolidation with low volatility. The 10-year note is yielding about 2.5% as the critical level is the 3% area as we probably need some type of government report to push prices lower. I might be recommending another short position as we were involved for several months getting stopped out a couple of weeks ago, but I still believe higher interest rates are coming. The 10-year note is trading above its 20-day moving average but still far below its 100-day as I might even make a counter-trend trade recommendation if prices rally as the chart structure remains outstanding so keep a close eye on this market as we could be involved in next week's trade to the downside. The U.S. stock market has been going sideways over the last month, or so, however, the NASDAQ did all-time touch highs several days ago and that is a fundamental bearish indicator towards bond yields as economic growth is strong in the United States and is increasing worldwide as I still think that is going to increase bond yields and if your a longer-term investor I would just flat out be short with no stop.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 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 May contract settled last Friday in Chicago at 3.90 a bushel while currently trading at 3.86 down about 4 cents having its first losing week in quite some time. I have been recommending several bullish positions initially from the 3.58 level, and if you took those trades, the stop loss has been raised to 3.84 as we possibly could be stopped out in today's trade. Corn prices are barely above their 20-day moving average, but far above their 100-day as the trend still is higher and prices topped out on March 13th around the 3.95 level as we now anticipate the next USDA crop report which will be released on March 31st which will show planting intentions with estimates around 89 million acres. The grain market as a whole has started to turn negative over the last couple of weeks especially wheat which is also lower once again today, so continue to place the proper stop loss, and if we are stopped out, we will look at other markets that are beginning to trend. There is a lot of sideways to choppy trading action at the current time. For the bullish momentum to continue, we have to break the 3.95 level & for that to happen, we probably need some fresh fundamental news to push prices higher as strong demand continues to support prices as exports have been outstanding lately. Volatility in corn is starting to increase as that will certainly expand over the next several months as the spring and summer months for this commodity can become extremely volatile with huge price swings as the small trading ranges are probably over with.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

Cotton Futures

Cotton futures are currently trading at 82.76 ending the week on a sour note after settling last Friday in New York at 84.52 down nearly 200 points for the trading week as the whole agricultural sector has turned negative in my opinion as I think the Trump tariffs are spooking the market to the downside. If you are long a futures contract, place the stop loss under the 10-day low which now stands at 81.10 as that will also be raised in Monday's trade, therefore, lowering the monetary risk as the chart structure is solid. Cotton prices topped out on March 6th at 86.60 as looks to me that there is an ascending triangle pattern that has been formed over the last two weeks as that looks negative as the soft commodity sector across the board except for cocoa remains negative. Cotton prices are still trading above their 20 and 100-day moving average as the trend is higher, however, it looks to me that prices have topped out as we await the March 31st planting intentions report. Tthe volatility in this commodity will increase tremendously as we start to enter the summer months here in the United States as there will be a battle on what crop farmers will plant between grains and cotton and which one will be most profitable.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

Sugar Futures

Sugar futures in the May contract are down 9 points at 12.62 a pound as this has probably been the weakest commodity out of all the sectors in 2018. Prices are retesting the June 26th, 2017 low of 12.53 as that was also touched on February 13th, 2016 and at that level is broken you're looking at a three year low due to overproduction and weak demand. I'm currently not involved in sugar as I will not take a short position. However, this market remains on the defensive as there is a slight possibility in my opinion that we could test the August 24th, 2015 low of 10.13. That would be a stretch in my opinion as I think the downside is relatively limited by these low prices. Sugar is trading far under their 20 and 100-day moving average as clearly the trend is the downside, but I will wait for better chart structure to develop before entering into any type of bullish position and if you are short stay short and place the stop loss above the 10-day high as an exit strategy. My only recommendation in the soft commodities is a bullish cocoa trade which is hitting another yearly high in today's trade. However, sugar is grown in Brazil as another excellent crop continues to keep a lid on prices, but I am starting to think that a lot of the fundamental bad news has already been reflected into the price.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY:LOW

Soybean Futures

Soybean futures in the May contract traded higher by about 10 cents for the trading week at 10.48 a bushel continuing its short-term bearish momentum right at a three week low after topping out on March 2nd around the 10.82 level on concerns about the Argentina crop which now seems to be in the background. Soybean prices are trading under their 20-day moving average, but still above their 100-day as estimates of the 2018 planted acres are around 92 million acres which is 2 million more than in 2017 and another record. We should produce another record crop in the United States around 4.5 billion bushels which has been a major problem, and that is why prices have been stuck in the mud. The next major level of support is around the 10.20 level. I think this market will remain choppy until the actual USDA planting intentions report comes out which will be on March 31st as I'm advising clients to avoid this market at the current time as my only recommendation in the grains is a bullish corn trade which I have been involved in over the last couple months. The United States has not experienced a drought since the devastating 2012 drought sending corn and soybean prices to all-time highs as we continue to produce record crops, but the odds are increasing for some type of weather situation which could develop this year.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Trading Theory

Descending triangles are a very popular chart pattern among traders because it clearly shows that the demand for an asset is weakening, and when the price breaks below the lower support, it is a clear cation that downside momentum is likely to continue or become stronger. Descending triangles give technical traders the opportunity to make substantial profits over a brief period of time.

Most traders look to initiate a short position following a high volume breakdown from lower trend line support in a descending triangle chart pattern. In general, the price target for the chart pattern is equal to the entry price minus the vertical height between the two trend lines at the time of the breakdown. The upper trend line resistance also serves as a stop loss level for traders to limit their potential losses.

A descending triangle is the bearish counterpart of an ascending triangle which is one of the most reliable bullish chart patterns used by technical analysts.

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: 630-408-3325


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There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.