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.

Crude Oil Futures

Crude oil futures in the June contract settled last Friday in New York at 67.33 a barrel while currently trading at 68.35 up about a $1 for the trading week hitting a 3 1/2 year high & in yesterdays trade prices went up as high as 69.55 before profit-taking ensued. I'm currently not involved in this market as the chart structure is terrible as the 10 day low stands at 62.01 as the monetary risk is too high, however, I am certainly not recommending any type of short position as this trend is strong as the fundamental and technical picture remains bullish. Strong demand for crude oil and the entire energy sector continues to push prices higher as I still think we will trade above the $70 level in the weeks ahead as global supplies have dwindled over the last year due to the fact that worldwide economies are improving which is a terrific thing to see in my opinion. Crude oil prices are clearly trading above their 20 and 100-day moving average as this has now become one of the strongest trends in 2018 as I think this will start to support the precious metals and the agricultural market down the road. I'm looking at a commodity rally to finish out the 2nd half of 2018 as the Trump tariffs talks have finally subsided and I do think that the U.S. dollar which remains choppy at the current time will drift lower in the future helping supporting prices.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Natural Gas Futures

Natural gas futures in the June contract finished unchanged for the trading week currently trading at 2.76 as I will be recommending a bullish position if prices break the four week high standing at 2.81 as the risk/reward are in your favor in my opinion due to the solid chart structure. Natural gas prices are trading above their 20 and 100-day moving average as the trend is higher, but really is mixed at this time so be patient and wait for the break out to occur as the energy sector as a whole continues to hit new highs this week as demand certainly has come back into this entire sector as I think the downside in natural gas is very limited. Gas prices held major support at the 2.65 level over the last several months while building a longer-term bottoming out pattern in my opinion and if the four week high is broken the next major level of resistance is last months high around 2.85 as the volatility should start to increase in my opinion as it still remains extremely low for such a historically volatile commodity. At the present time I do not have any trade recommendations in the energy sector, however I am bullish and I think that prices will crack the $70 level as I am certainly not recommending any type of short position as I do have several other recommendations in other commodity sectors as I think the bullish trends are starting once again.
TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Silver Futures

Silver futures in the May contract traded higher by 50 cents this week at 17.15 an ounce hitting an 11 week high continuing its bullish momentum following the coattails of the crude oil market which continues to hit multi-year highs as the inflationary commodities have come to life in recent days. I have been recommending a bullish position from the 16.85 level & if you took that trade the stop loss remains at 16.24, however, in Monday's trade that will be raised to 16.41 as the chart structure will start to improve on a daily basis, therefore, the monetary risk will be lowered. In my opinion, I think silver prices look to retest the January 25th high of 17.79 as a true breakout has occurred as the whole precious metals sector look strong in my opinion and if we can get some further weakness in the U.S. dollar that could accelerate the price momentum to the upside. Silver prices are trading above their 20 and 100-day moving average as the trend clearly is higher as prices held major support around the 16.25 level over the last several months & if you have read any of my previous blogs you understand that I think silver historically speaking is cheap as we are in a longer-term bottoming out pattern so continue to stay long & place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

10-Year Note Futures

The 10-year note is trading lower for the 3rd consecutive session down another 7 points at 119/18 as the yield is currently 2.95% hitting a 5 week high as I think this trend will start to get stronger to the downside in the coming weeks ahead. I have been recommending a bearish position from around the 120/18 level & if you took the trade continue to place the stop loss at 121/12 as I will lower that in next week's trade, therefore, the monetary risk will also be reduced. In my opinion, I think prices will retest the March 21st low of 119/22 & if that is broken I think we will retest the contract low which was hit on February 15th at 119.14 as I still remain bearish as I will be looking at adding more positions to the downside in the coming days ahead. As I've talked about in many previous blogs I think prices will crack the 3% level soon as economic growth in the United States is very strong while economies around the world are accelerating as these yields are way too low as the Federal Reserve is still expected to raise interest rates 3 more times in 2018 so continue to play this to the downside. The U.S. stock market has stabilized in recent weeks & looks to move even higher in my opinion as that is another negative influence on the 10-year note and bonds in general.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Mexican Peso Futures

The Mexican Peso in the June contract settled lower for the 2nd consecutive day getting crushed in today's trade down 105 points settling around 5380 as I have been recommending two bullish positions with an average price around 5410 & if you took those trades I would place the stop loss at 5345 on a hard basis as I'm not willing to give up any more room. This decline was very surprising as it was a tremendous move as we are now trading under the 20-day moving average, but still above their 100-day as I usually base entries and exits on closing basis only, however, in this case, keep it at 5345 as I'm just not willing to see another debacle such as in today's trade. The Peso is now trading below its 20-day but still above its 100-day moving average as I'm very surprised at today's trading action as I'm not sure what the main reason was for such a large decline so stick to the rules and if we are stopped out tomorrow let's move on & find other markets that are beginning to trend as the rest the commodity sectors were relatively quiet today. Volatility in the Peso has been relatively low over the last four months, but it's like somebody woke up today & just said sell sending prices down over 100 points which is very unusual so let's see what the night session does so place the stop on the aftermarket session just in case something happens crazy overnight, therefore, limiting the risk as this was a disappointing day.
TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

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 July contract traded lower by eight cents this week at 3.97 a bushel as we are right at the 50% retracement level from the recent low to the recent high as I am bullish this commodity, I'm not involved, but I'm not recommending any short position as I think prices look cheap going into spring planting. Corn prices are still trading above their 20 and 100-day moving average as the trend is higher as I think this recent downdraft in prices was basically blamed on profit-taking, but for the bullish momentum to continue we have to break the $4 level which could happen in next week's trade. Weather is now the main focus on where corn prices go & as I write this article the state of Illinois will receive another 3 inches of snow tonight as this has been one of the coldest April's I can ever remember as the Midwestern part of the United States is cold in general however, planting really doesn't get into full swing until about 10 days from now as that's when the weather market starts to increase the volatility tremendously. I still think the downside is very limited as the chart structure is starting to improve on a daily basis so let's keep a close eye on this market and if you are a farmer I certainly would not be selling at these depressed prices
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING

Cotton Futures

Cotton futures in the July contract are trading higher by 150 points at 84.33 as volatility has come to a crawl over the last several weeks as I will be recommending a bullish position if prices breakout above 83.94 while then placing the stop loss under the 10-day low standing at 81.97 as the risk will be around $1,000 per contract plus slippage and commission as the chart structure is excellent. Cotton prices are still trading above their 20 and 100-day moving average as the short-term trend is higher as the Texas Panhandle is experiencing extremely dry conditions and needs rain as that is supporting prices at the present time so look to play this to the upside as the risk/reward are in your favor. In my opinion, the commodity markets are starting to come to life & if you take a look at crude oil which is hitting another multi-year high in today's trade coupled with the fact that the precious metals also have come to life as I think that will start to support the agricultural markets. Volatility in cotton certainly will increase as planting has begun in the southern part of the United States as now this commodity has entered into a weather market. Expectations are around 13.5 million acres planted in 2018 which would be an all-time record and could produce an outstanding crop, however, weather conditions are not ideal at the current time as it is a very long growing season.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cocoa Futures

Cocoa futures in the July contract settled last Friday in New York at 2576 while currently trading at 2719 continuing its bullish momentum as I had been involved in this commodity for several months getting stopped out several weeks ago as I'm currently sitting on the sidelines, however, I do believe prices are headed towards the 3000 level as I'm certainly not recommending any type of short position. If you are long a futures contract place the stop loss at the two week low standing at 2474 as the church structure is poor due to the fact that prices are racing higher on a daily basis as my contacts in West Africa still suggest that the hot and dry weather conditions have certainly hurt the crop as it doesn't look like there's any relief anytime soon. Cocoa prices are trading far above their 20 and 100-day moving average as this is the strongest trend at the present time as who knows how high prices can go as I do think 3000 is in the cards. At the present time, my only soft commodity recommendation is a bullish orange juice trade as the commodity markets are finally starting to look like they have bottomed out as we are higher across the board today as I have several other trade recommendations in other sectors including silver which has broken out in today's session. I will be looking at a bullish position in cocoa once the chart structure improves or on any type of profit-taking, therefore, lowering the monetary risk so keep a close eye on this market as we could be involved soon.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Oat Futures

Oat futures in the July contract finished down four cents at 2.37 a bushel as I am not currently involved in this market, but I'm looking for a bullish position if prices break the four week high of 2.47 as the chart structure is excellent at the present time, therefore, the risk/reward are in your favor. Prices are trading right at their 20-day but still below their 100-day moving average as this market was trading at about 2.75 just last month and has fallen out of bed as I do think the grain market is starting to look strong to the upside as we enter spring and the volatile summer months as I think the downside is very limited. There are a lot of good indicators in the commodity sectors at this time as oil continues to hit yearly highs coupled with the fact that silver also broke out of a major trading range today as the inflationary commodities are starting to come to life so look to play this to the upside as we could be involved possibly in next week's trade. Oat prices held major support around the 2.30 level as the volatility still remains relatively low, but that will not continue for very long as my only trade recommendation at the current time is a bullish trade in rice which continues to trend higher.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Orange Juice Futures

Orange juice futures in July settled up 160 points closing at 142.70 as I have been recommending a bullish position from the 142.30 level as the stop loss remains at the same level standing at 137.25, however, that will change early next week, therefore, the monetary risk will be lowered. The commodity markets finally took a shot in the arm today as oil & silver were the leaders trading sharply higher as I think that will start to bleed into the agricultural market down the road as I still remain bullish as prices are trading above their 20 and 100-day moving average as today was blamed on profit-taking. The soft commodity markets still remain bearish except for cocoa and orange juice as cocoa prices hit another yearly high as there's no stopping that market to the upside in my opinion as juice prices look cheap as there is room to run to the upside as the next level of major resistance is at 150.00 & if you're not involved I'm still recommending it at these price levels as the risk/reward are still in your favor. The U.S. dollar I think will start to move lower as the United States passed that $1.3 trillion omnibus budget plan which should weaken the dollar which is positive towards the commodity markets across the board as in today's trade these markets are finally sensing that demand and a weak dollar are coming as prices still look cheap in my opinion especially compared to the equity markets as I will be looking at adding more contracts down the road.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Rice Futures

Rice futures in the July contract finished down five cents closing at 13.05 in a relatively quiet trade still hovering right near contract highs as many of the commodity sectors were lower in today's trade as the U.S. dollar was up about 35 points putting pressure on prices today. I have been recommending a bullish position from around the 12.85 level and if you took the trade continue to place the stop loss at 12.59, however, in Monday's trade that will be raised to 12.80 which was Tuesday's low as the chart structure will improve as the monetary risk will be lowered. Rice is my only grain recommendation at the current time, but I do think the grain market is headed higher as spring planting is upon us as the volatility certainly will expand as rice is still trading above their 20 and 100-day moving average as the trend is to the upside so continue to place the proper stop loss. The next major level of resistance is at 13.50 & if that is broken we could possibly trade up to the 14/15 level in the weeks ahead so let's see what tomorrow's trade brings as I still remain bullish. Volatility in rice has certainly expanded over the last several weeks as I think it could get very crazy in the weeks ahead as historically speaking rice can have tremendous price swings on a daily basis so make sure you risk 2% of your account balance on any given trade as the proper risk management technique.
TREND: HIGHER
CHART STRUCTURE: SOLID
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.