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 December contract settled last Friday in New York at 14.17 an ounce while currently trading at 14.23 up about 6 cents trading in a two week consolidation and if you are short the stop loss in Monday's trade will be 14.59, however in Tuesday's trade that will drop tremendously to 14.39 which is just an eyelash away. For the bearish momentum to continue, we have to break through the September 11th low of 13.96 as gold prices hit a two week high in yesterdays trade as I have now become neutral that commodity, but silver remains negative as the downtrend line remains intact as the volatility has come to a crawl. Historically speaking silver prices look cheap in my opinion as I do think a bullish trend eventually will develop as prices have dropped about 20% from June as we are right near a nine-year low as prices have plummeted from $50 an ounce in 2011 as that's how far this bearish trend has dropped. The commodity markets, in general, remain weak, but I do think a bottoming out process is coming about as the U.S. economy is excellent as global economies are also improving as you would have to think 2019 commodity prices will start to rally. However, if you are short, place the proper stop loss and if stopped out then look at other the markets that are beginning to trend.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

S&P 500 Futures

The S&P 500 in the September contract was up 28 points at 2903 this week continuing its bullish trend as prices look to retest the August 29th all-time high of 2917 possibly in tomorrow's trade as I remain very bullish the U.S. equity markets across the board. I have been recommending a bullish position from the 2803 level and if you took the trade the stop loss remains at 2865 as that will not change for another 8 sessions so you will have to accept the monetary risk at this time as I think the recent downdraft in prices is blamed on uncertainty about the Chinese tariff situation. The S&P 500 is still trading above its 20 and 100-day moving average as the trend is powerful to the upside as the uptrend line remains intact. I will be looking at adding more contracts if the all-time high is broken as adding to winners while getting out of losers is the way to trade successfully over the course of time in my opinion. At the present time earnings season is behind us and we are now awaiting the midterm elections here in the United States. That will undoubtedly bring significant volatility in November. September historically speaking is the worst month for U.S. equities, but that has not been the case so far as the U.S. economy is firing on all cylinders as all of the interest remains in the equity market so stay long and continue to place the proper stop-loss as who knows how high prices could trade.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Natural Gas Futures

Natural gas futures in the October contract is currently at 2.77 trading lower for the 2nd consecutive trading session after settling last Friday in New York at 2.77 unchanged for the trading week sitting right near a 6-week low. Natural gas prices are trading under their 20 and 100-day moving average as the trend is to the downside coupled with the fact that the downtrend line remains intact as I am currently sitting on the sidelines waiting for a possible retest of the July 19th low of 2.68 as I am looking at a counter-trend bullish trade. Volatility in natural gas remains low as September seasonally speaking is bearish as we are now entering the autumn months as mild temperatures and weak demand are keeping a lid on prices probably for the next several weeks. Historically speaking I think natural gas prices are very cheap as we have been stuck in a 30 point trading range over the last six months and that certainly will change as we head into the winter months as that's when huge price swings can occur to the upside due to freezing temperatures. I think we have a chance of that developing in 2019 so be patient & let's look at a bullish position as the risk/reward will become in your favor in the next couple of weeks.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Orange Juice Futures

Orange juice futures in the November contract settled last Friday in New York at 156.80 while currently trading at 153.60 down over 300 points for the trading week experiencing higher than average volatility due to the situation with Hurricane Florence possibly hurting orange production in the state of Florida. I have been recommending two bearish positions with an average price around the 157.50 level & if you took those trades continue to place the stop loss at 158.75 on a firm basis only which means not on a closing basis as I'm not willing to risk anymore. In my opinion, I do not think this hurricane is going to have any impact on the state of Florida as it is hitting the Carolina's which does not grow oranges so stay short and continue to place the proper stop loss. But for the bearish momentum to continue, we have to break the August 29th low of 152.25 which has acted like cement over the last several weeks. If you take a look at the daily chart, there is a price gap that was created on April 24th at the 147 level, and I still think that gap will be filled in the coming days. This is my only soft commodity recommendation as this market still is trading under its 20 and 100-day moving average telling you that the trend remains to the downside.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

Corn Futures

Corn futures in the December contract settled last Friday in Chicago at 3.67 a bushel while currently trading at 3.50. I have been recommending a bearish position initially from the 3.66 level while adding more to the downside at 3.50. I think prices are headed to the 3.00 level at the end of harvest. The next major level of support is at the August 28th, 2017 low of 3.28, and if that is broken, I think prices could retest the August 29th, 2016 low of 3.0. Stay short as this trend is getting stronger to the downside on a weekly basis. If you took these trades continue to place the stop above the 10 day high which stands at 3.70 as the crop report which was released earlier in the week was extremely bearish in my opinion as harvest starts in the next week or so bringing in around 14.8 billion bushels which should continue to put pressure on prices in the short term. Corn prices are trading under their 20 & 100-day moving average telling you that the trend is to the downside as I see nothing fundamentally or technically speaking bullish about this commodity at this time so stay short as I will looking at adding more contracts to the downside in next weeks trade.
TREND: LOWER
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.

Cotton Futures

Cotton futures in the December contract settled last Friday in New York at 81.99 while currently trading at 81.50 down about 50 points for the trading week experiencing high volatility due to the Hurricane Florence situation which is hitting South and North Carolina putting concerns on the cotton crop. I'm sitting on the sidelines waiting for a break out to occur, and if prices crack the 84.25 level, I will be recommending a bullish position while then placing the stop loss under the 10-day low. So be patient and let's see what next week's trade brings as we will start to see what type of damage was done to the cotton crop. Estimates of this year's production numbers are slightly under 19 million bales as Texas experienced a drought in certain areas and this will not be a record crop. I still have a bullish bias to the upside even though prices are still trading under their 20 and 100-day moving average as the short-term trend is lower in my opinion, but it is mixed. My only soft commodity recommendation is a bearish orange juice trade as I'm keeping a close eye on sugar and coffee both to the upside as cotton prices have now been stuck in a 5-week tight consolidation pattern as I think a breakout could happen possibly in next week's trade.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

Soybean Futures

Soybean futures in the November contract is trading lower for the 2nd consecutive trading session down 1 cent at 8.32 a bushel continuing its bearish momentum after settling last Friday in Chicago at 8.44 as prices are right at a fresh 10-year low. I've been recommending a bearish position from around the 8.39 level, and if you took the trade, the stop-loss would remain at 8.52 as the chart structure is outstanding as the risk/reward are in your favor to take a short position in my opinion. The WASDE crop report was released early in the week stating that we have a carryover level of 845 million bushels which is an all-time record high. Coupled that with the fact that we will produce around 4.7 billion bushels which is another record, as we have too many soybeans as I still see a lot of room to run to the downside. If you have been following any of my previous blogs you understand my price target is 7.50 at the end of harvest. Soybean prices are trading under their 20 and 100-day moving average as the trend is very weak, and I am also recommending bearish positions in corn and soybean oil which were both lower this week as well so continue to stay short. I will be looking at adding more contracts to the downside possibly in next week's trade as I see no reason to be bullish this sector.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Soybean Meal Futures

Soybean meal futures in the December contract settled last Friday in Chicago at 317.0 while currently trading at 310.0 down about 600 points for the week continuing its bearish momentum. Historically speaking I think prices look very expensive compared to the rest of the grain sector. If you are bearish soy meal, I would sell at today's level while placing the stop loss at the 10-day high standing at 321 risking around 1,100 per contract plus slippage and commission as the risk/reward are in your favor. However, I am recommending short positions in corn, soybeans, and soybean oil as I do not want to overload too many positions in 1 sector. The downtrend line remains intact to the downside as this recent kick back in price was due to short covering. So, play this to the downside as supplies are massive at the present time coupled with the fundamental fact of weak demand as the harvest is coming up in the next couple of weeks which will bring huge supply onto the market.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Soybean Oil Futures

Soybean oil futures finished lower for the 4th consecutive trading session down another 9 points at 27.70 as I have been recommending a bearish position from around the 28.00 level if you took that trade the stop loss remains at 29.00 as the original risk was around $600 per contract plus slippage and commission. However, the chart structure will start to improve three days from now, therefore, lowering the monetary risk. I am bearish the entire grain market, and I have bearish recommendations in corn, soybeans, and soybean oil as the WASDE crop report stated that supplies increased coupled that with the fact that production numbers exceeded estimates. I think we will continually grind lower on a daily and weekly basis as harvest is right around the bend so stay short in my opinion as the risk/reward is in your favor. Soybean oil prices are trading under their 20 and 100-day moving average as clearly the trend is to the downside as prices broke out of an 8-week consolidation pattern and as my theory states the more prolonged the consolidation, the more powerful the breakout is as there is extremely weak demand for soybean oil at the current time. Volatility remains very low as I think that situation will continue until harvest is finished around November, but I still think there is a lot of room to run to the downside as the downtrend line remains intact as soybean prices are right at a fresh 10-year low.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Trading Theory

Where Do I Place My Stop Loss? The biggest question that I have been asked is when do I exit a winning trade and when do I exit a losing trade? The rule of thumb that I use is placing my stop loss at the ten-day high if I am short or a 10-day low if I am long. If you have any questions, please call me at 630-408-3325 and I will review many basic trading rules with you.