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 is currently trading at 1,202 after settling last Friday in New York at 1,205 an ounce down about $3 for the trading week as prices are still consolidating the recent downdraft that has occurred over the last several months as I remain bearish. If you are short a futures contract continue to place the stop loss at 1,221 as the downtrend line remains intact as I still believe that we will retest the August 16th low of 1,167 in the coming days ahead as the U.S. economy is strong as we added another 201,000 jobs last month as I still see no reason to own gold. The 10-year note is now yielding 2.94% as the Federal Reserve is probably going to continue to raise interest rates which is also fundamental bearish indicator towards gold prices as I remain bearish the entire sector as it looks like silver could hit a 9-year low in the coming weeks ahead so stay short. Gold prices are trading under their 20 and 100-day moving average as the trend remains to the downside as I still think there could be significant room to run as prices still look expensive especially compared to silver historically speaking. The U.S. dollar remains strong as I still believe we will touch the 100 level in the coming months ahead which will have a negative influence on prices as gold fundamentally and technically speaking doesn't have anything going for it at this time.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Silver Futures

Silver futures in the December contract is currently trading at 14.19 an ounce down about 30 cents for the trading week continuing its bearish momentum. Prices still look to break the September 4th contract low of 14.03 and if you are short a futures contract continue to place the stop loss above the 10-day high at 15.07 as the chart structure is poor due to the recent selloff. In my opinion, I believe silver prices will retest the 3-year low which was hit on December 14th, 2014 at 13.63 and if that is breached you're looking at a 9-year low as there is absolutely no interest in owning silver at the current time or any of the precious metals. If you have read any of my previous blogs, you understand that I am bearish the precious metal sector across the board as a strong U.S. dollar continues to hamper prices in the short-term. All the interest remains in the U.S. equity market which is lower once again today on concerns about regulation for social media companies but is having minimal impact on silver prices. Silver is trading far below its 20 and 100-day moving average as the trend remains negative as I see no reason to own this commodity so stay short and place the proper stop loss. I think this commodity will weaken for the rest of 2018. If you take a look at gold prices, they look extremely expensive compared to silver as I still think gold prices will continue to trade to the downside as that will also continue to put pressure on silver prices.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: AVERAGE

S&P 500 Futures

The S&P 500 in the September contract is trading lower for the 4th consecutive trading session acting negatively to the monthly unemployment number as the U.S. added 201,000 jobs which were higher than expected sending bond yields higher which are spooking the market as good fundamental news has now become negative towards stock prices. The S&P 500 settled last Friday in Chicago at 2902 while currently trading at 2866 down about 36 points for the trading week as this is a little surprising in my opinion, but rumors about the U.S. government starting to regulate social media sent many tech companies such as Facebook lower as that has now bled into other sectors. I have been recommending a bullish position from around the 2803 level if you took that trade the stop loss now stands at 2856 on a closing basis as the chart structure is excellent. The S&P 500 is still trading above its 20 and 100-day moving average as the trend is higher. Seasonally speaking the month of September historically is the worst performing month as that has been the case so far as I will not 2nd guess as I will continue to place the proper stop loss and if we are stopped out, we will move on and look at another trend that is starting to form.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Natural Gas Futures

Natural gas futures in the October contract settled last Friday in New York at 2.87 while currently trading at 2.77 down about 10 points for the trading week continuing its bearish momentum as prices have now hit a 5-week low. If you have read any of my previous blogs you understand that I've been bearish natural gas, however I'm looking for a possible counter trend trade if prices test the July 19th low of 2.68 in the coming days ahead as I think historically speaking prices look very cheap especially going into the very volatile autumn and winter months. Unusually mild temperatures in the Midwestern part of the United States is what is putting pressure on prices as seasonally speaking the month of September is bearish natural gas as we move out of the summer months into early fall so keep a close eye on this market as we could be involved relatively soon. Natural gas prices are trading below their 20 and 100-day moving average as the trend is to the downside as it was unable to break through the 2.95 level which was hit on 1/2 dozen occasions while now is testing the lower end of the trading range. I think the downside is minimal from these depressed prices, but there could be one more leg down in my opinion so be patient.
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.

Coffee Futures

Coffee futures in the December contract settled last Friday in New York at 102.65 a pound while currently trading at 102.40 basically unchanged for the week stuck in a 3-week consolidation pattern as prices look to be bottoming out in my opinion. If you take a look at the daily chart, there may have been a double bottom that was created on September 4th around the 99 level. I will keep a close eye on this market for a possible bullish position in the coming days or weeks ahead as sugar prices which are also grown in Brazil look to have bottomed as those two commodities have followed one another over the last several months. Harvest in the country Brazil is around 93% complete as we will now start to focus on next year's crop and there should be a price premium that will be put back into this market as seasonally speaking harvest generally creates a seasonal low. Coffee prices are still trading under their 20 and 100-day moving average as the trend remains to the downside, and if you look at the daily and monthly chart, the downtrend line remains intact as I wait for a 4-week high before thinking about entering into a bullish position. I think most of the fundamental news such as 90 million bags being produced by Brazil and Vietnam combined has already been reflected in these meager prices as we are still hovering right near a 12 year low, but this bearish trend is getting long in the tooth.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Orange Juice Futures

Orange Juice futures in the November contract settled last Friday in New York at 154.90 while currently trading at 153.40 down about 150 points in a very nonvolatile trading manner as I remain bearish. I have been recommending a bearish trade from around the 163.20 level while then adding more contracts around the 154.00 level and if you took those trades, the stop loss remains at 158.75. However, in Tuesday's trade that will also be lowered to 157 as the chart structure is outstanding because prices have stagnated over the last week or so. Juice prices are still trading below their 20 and 100-day moving average as the trend remains negative as the agricultural markets are still in bearish trends as I still think there's more room to run possibility filling the gap that was created on April 24th around the 147 level. Hurricane season is upon us, and that has supported prices here in the short-term. However, the state of Florida has ideal growing conditions as weak demand fundamentally speaking is really the main covert for lower prices. I still think prices look expensive especially compared to the rest of soft commodities so stay short & continue to place the proper stop loss.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Sugar Futures

Sugar futures in the October contract settled last Friday in New York at 10.60 a pound while currently trading at 10.92 up about 32 points for the trading week continuing its bullish momentum as I haven't been able to say that for quite some time as prices are now hovering right near a 4 week high. Sugar prices are currently trading above their 20-day moving average, but still below their 100-day as the trend is mixed as it looks to me that a “V” bottom has been formed as prices bottomed out on August 22nd at 9.91 as all of the poor fundamental news has already been reflected into the price. I will be patient and wait for the chart structure to improve therefore the risk/reward will become more in your favor. Sugar prices are right at major resistance as the downtrend line on the monthly chart has finally been broken, and it looks to me at the bottom has been formed. However, the 10-day low is too far away at this time to enter into a bullish position so I will wait for some type of price retracement before entering, therefore, lowering the monetary risk. My only soft commodity recommendation is a bearish orange juice trade which continues to get squeezed on a monthly basis as I'm also keeping a close eye on the coffee market as that commodity has mirrored the sugar market and is also looking at a bottoming process as well.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Wheat Futures

Wheat futures in the December contract are trading lower for the 4th consecutive trading session currently at 5.09 a bushel after settling last Friday in Chicago at 5.45 down about $0.36 for the trading week as prices have now hit a 7-week low. In my opinion, prices will retest the contract low which was hit on July 11th at 4.90 as the entire grain market remains very bearish in my opinion as oversupply and weak demand continue to plague sector as the whole as prices are trading under their 20 and 100-day moving average. I am not involved in the wheat market as prices went straight up and then straight down as the chart structure is terrible. The risk/reward is not in your favor to take a bullish or bearish position as improving weather conditions in the Great Plains part of the United States, and Russia has pushed prices lower in recent weeks. The Russian Ruble has been week against the U.S. dollar as that also has a negative impact on wheat prices as traders are awaiting next week's USDA crop report which will send some fresh fundamental news back into this market as there is major support around 4.90/5.00. If you take a look at the monthly chart that's the only positive situation that I can think of at this time. If you have read any of my previous blogs you understand that I am also very bearish corn and soybeans as huge supplies will come about in the coming weeks ahead as harvest will begin soon as that could also continue to put pressure on the wheat market in my opinion.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Soybean Oil Futures

Soybean oil futures in the December contract is currently trading at 28.19 after settling last Friday in Chicago at 28.67 down about 50 points for the trading week looking to break out of a tight 2-month consolidation chart pattern. I will be recommending a bearish trade if prices break the 28.05 level while then placing the stop loss above the 10-day high which stands at 29.00 as the risk would be around $570 per contract plus slippage and commission as the risk/reward would be in your favor in my opinion. Soybean oil is trading under their 20 and 100 day moving average as the trend is to the downside as traders are awaiting next week’s USDA crop report which will undoubtedly send volatility back into this market as we are expected to produce around 4.65 billion bushels of soybeans which would be another all-time record. Seasonally speaking soybean prices trend lower during harvest as that will start to begin in the next 3-weeks as we have substantial worldwide supplies so look to play this to the downside as the rule states the longer the consolidation, the more powerful the breakout can occur.
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.