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 future prices in the August contract is currently trading at 1,303 an ounce still stuck in a 3-week tight consolidation pattern. I am not involved in this market, but I do have a bullish bias toward silver and the copper market which is higher once again today. Volatility in gold is extremely low as we are right near major support on the daily chart. However, one thing that does concern me is that there is a price gap around 1,280 which was hit in late December 2017. I don't like gaps as they are generally filled so be patient and let's see if that situation occurs. Gold prices are still trading under their 20 and 100-day moving average as the short-term trend is to the downside. The U.S. dollar is still hovering right near a 5-month high and has been the main culprit for depressed gold prices as all of the interest remains in the U.S. equity market which is right near another all-time high today as money flows continue to go into that sector and out of gold. The highly anticipated summit between North Korea and the United States is next week and tensions have eased as there is a possibility that North Korea could end their nuclear program. If that is the case, you would probably have to think that gold prices would head lower in the short term, however, avoid this commodity and look at other markets that are beginning to trend.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

S&P 500 Futures

The S&P 500 in the June contract settled last Friday in Chicago at 2733 while currently trading at 2766 up about 33 points for the trading week continuing its points bullish momentum hitting a 3-month high. I'm not involved in this market, but I do think higher prices are ahead. The NASDAQ 100 hit all-time highs this week. However, the S&P 500 is still about 125 away from new highs, and I think that will be touched down the road as low-interest rates and a robust U.S. economy will propel prices higher. The S&P 500 is trading above its 20 and 100-day moving average as the trend is to the upside as the Russell 2000 which is the small-cap index hit all-time highs again this week, and that tells you that small businesses are doing exceptionally well and have optimistic attitudes towards the future which is very important. President Trump has a meeting with the G7 this afternoon as the trade talks are continuing and if anything positive comes out of this situation, I think you will see the stock market move higher to the upside. I guess that is somewhat keeping a lid on prices in the short term & if you are long a futures contract stay long as this trend is strong to the upside in my opinion. Interest rates are still low historically speaking as the 10-year note yield is at 2.93% which is a still bullish component toward large corporations coupled with the fact of the massive tax breaks which is helping large corporations hit record earnings as I don't see that stopping anytime soon.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: LOW

Natural Gas Futures

Natural gas futures in the July contract finished lower by 7 points for the week closing at 2.89 in a very quiet trade this week in New York as the volatility certainly has come to a crawl here in the short term. I have been recommending a bullish trade from around the 2.83 level & if you took the trade continue to place the stop loss at 2.86 which is just an eyelash away as we are awaiting tomorrow's inventory report which could stop us out as this market has gone nowhere over the last 3-weeks. The energy sector was lower across the board once again today as crude oil continues with its bearish momentum, however for the bullish momentum to continue in natural gas prices have to break last week's high of 3.00 in my opinion as that is acting as major resistance. Mild temperatures in the Midwestern part of the United States is one reason why volatility is so low as we are only about 70° in the state of Illinois as the 7/10 day forecast still has average temperatures. Volatility in natural gas is exceptionally low at this time as I don't see that trend lasting much longer so stay long as I do not like to 2nd guess as there are very few trends as these markets continue to trade in a sideways pattern. I still believe that the summer rallies are on the horizon as the U.S stock market is where all the excitement is as the NASDAQ 100 hit another all-time high in today's trade as I think that will start to bleed into the depressed commodity markets.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Copper Futures

Copper futures in the July contract settled last Friday in New York at 3.0985 a pound while currently trading at 3.2955 up about 2000 points for the trading week hitting a 5-month high as this market has exploded to the upside due a robust housing market in the United States causing strong demand for this commodity. I had written about copper earlier in the week as I was bullish. However, the stop loss was too far away as the risk was around $5,000 which was too much to enter into a bullish position. However, I was certainly not recommending any bearish position as I still think higher prices are ahead. Copper prices are trading above their 20 and 100-day moving averages as the trend is to the upside and it looks to me that we could retest the contract high which was hit on December 28th at the 3.3465 level as there is still room to run to the upside in my opinion despite the fact that the rest of the precious metal sector remains stagnant. Volatility has undoubtedly expanded tremendously, and I think that is here to stay which is a terrific thing to see. I'm also keeping a close eye on a possible bullish silver position which is near a critical level in my opinion and if you are long a futures contract in copper stay long as I still think prices could hit the 3.50 level in the coming weeks ahead.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Coffee Futures

Coffee futures in the July contract at 117.25 and if coffee could talk it would bark as that is how big of a dog this commodity has been in 2018. Prices are right near a 2-week low, and I am not involved as I am still waiting for a bullish trend to develop. I've been trading the commodity markets for nearly 25 years, and I can't remember such a low volatile trading manner for such an extended period for this historically volatile commodity as there seems to be very little interest at this time, but I can't imagine this will last much longer. Coffee prices are trading under their 20 and 100-day moving average as the trend is clearly to the downside as the longer-term downtrend line remains intact. I will not go short as I still think the path of least resistance will be to the upside eventually, but there is the possibility that we could retest the April 17th contract low at 115.30 in the coming days ahead. The agricultural markets have remained weak over the last several weeks as the Trump tariffs have certainly cast a spell over many of those sectors as I think positive results will eventually come about so keep a close eye on this market as we are at major support. I still think we could break through major resistance at 125/126 down the road.
TREND: LOWER
CHART STRUCTURE: IMPROVING
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 July contract which is considered the old crop has traded lower for the 3rd consecutive session after settling last Friday in Chicago at 3.91 a bushel while currently trading at 3.75 down about $0.16 for the trading week hitting a 4-month low. I'm not involved, but I do think corn prices are getting very cheap as excellent growing conditions in the Midwest coupled with the Trump tariff talks igniting once again continue to put pressure on this market. We are right near major support as it is still a very long growing season and a weather problem still could develop. Corn prices are trading under their 20 and 100-day moving average as the trend is clearly to the downside. However, we are starting to enter oversold territory as this market has flat-out gone south over the last week with the next major level of support around the 3.70 area and if that is broken, there's a possibility we could retest the January 12th low of 3.62. Prices have now dropped $0.35 from the May 24th high which is around an 8% move as there is nothing bullish about this commodity except for the fact that prices are historically cheap. I will not take a short position at this time as I will be looking at a counter-trend trade to the upside as once the hot and dry weather conditions arrive you could see massive short covering in this market in my opinion.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Cotton Futures

Cotton futures in the December contract which is considered the new crop and is currently being grown in the southern part of the United States settled last Friday in New York at 92.36 while currently trading at 93.83 up about 150 points for the trading week hitting a 4-year high in today's trading session continuing its bullish momentum. Cotton by far is the most active agricultural market at this time as the grain market continues to move lower as hot and dry conditions in the Texas Panhandle and the southern Great Plains part of the United States continue to push prices higher. If you are long a futures contract, the chart structure has improved so place the stop loss at the 2-week low standing at 88.40. I think there's a possibility we will trade above the 100 level in the coming weeks ahead. Traders are awaiting next week's USDA crop report as the volatility remains exceptionally high and that will stay all summer long as the weather will be the main impact on prices. Strong demand also is a main influence in supporting prices and I still think higher prices are ahead. I'm certainly not recommending any short position as prices are trading far above their 20 and 100-day moving average as picking bottoms and tops is extremely difficult to do over the course of time as trading with path of least resistance is the way to trade in my opinion.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Soybean Futures

Soybean futures in the July contract has now traded lower for the 5th consecutive session currently at 9.70 a bushel after settling last Friday in Chicago at 10.21 down about 50 cents for the trading week hitting a 10-month low. The grain market across the board except for wheat continues to slide on a daily basis due to outstanding growing conditions in the Midwestern part of the United States. The Trump tariff talks are also putting pressure on this market as China is the largest importer of U.S. soybeans and this situation doesn't seem to have an end at this time. However, I do believe a favorable situation eventually will develop as traders are keeping an eye on next week's USDA crop report as the 7/10 day weather forecast remains with ample rain and mild temperatures as there is no weather problem on the horizon at this time. The next major level of support is around the contract low at 9.40/9.50 as prices are in oversold territory at this time as I think lower prices are ahead but are limited to the downside as I will not take a short position as I still feel a summer rally is coming especially at these depressed levels. Soybean prices are trading below their 20 and 100-day moving average as the trend is to the downside as planting should be 100% completed as the good/excellent rating is outstanding as we should produce around 4.4 billion bushels once again increasing global supplies which are already historically high.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Wheat Futures

Wheat futures in the July contract is ending the week on a sour note down $0.12 at 5.14 a bushel after settling last Friday in Chicago at 5.23 down about 9 cents for the trading week. Wheat remains the strongest out of the grain sector which continues to melt on a daily basis as the excellent weather is putting pressure on the grain sector at this time. Wheat prices are still trading above their 20 and 100-day moving average and if you are long a futures contract place the stop loss under the 2 week low standing at 5.03 which is just an eyelash away as the NAFTA talks continue to be a headwind towards prices as President Trump might withdraw as that is spooking the market at the current time. For the bullish momentum to continue we have to break the May 29th high of 5.54 as there are still weather problems in the southern Great Plains of the United States as this market remains bullish as we are still right near a 1-year high as I still think prices could break the $6 level in the coming weeks ahead. Corn and soybean prices continue to go lower on a daily basis and that is keeping a lid on prices, but there are hot & dry temperatures in the southern part of the United States as it is a very long growing season as I remain bullish. However, if the 5.03 level is broken, it's time to move on & look at other markets that are beginning to trend. Traders are awaiting next week's USDA crop report which should send more volatility into this market as volatility at the current time remains high as it's going to get even more violent in the weeks and months ahead.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

Trading Theory

This rule is extremely important and I witness it being abused constantly creating tremendous loses that are sometimes difficult to come back from.

Never add to a losing position because if the position continues to go against you and now you have added even more contracts which are all losing money your account will suffer loses much more than 2% and in some case adding positions and never getting out of a losing trade has wiped peoples trading accounts down to zero because of 1 or 2 bad trades.

Remember always play for another day you will have losing trades and the good traders manage losses and move on to the next possible trade.