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 February contract is currently trading at 1,261 after settling last Friday at 1,241 in New York hitting a 5 ½ month high continuing its bullish momentum. The stock market has utterly collapsed this week as money flows are continuing to exit and I do believe new money will start to enter into the gold market. However, I'm surprised that gold prices have not reacted more bullish to the recent sell-off in equities. I have been recommending a bullish position from the 1,252 level and if you took that trade continue to place the stop loss under the 10-day low standing at 1,236 as the chart structure is solid due to the fact of the extremely low volatility which is very surprising as craziness is upon us. Gold prices are trading above their 20 and 100-day moving average as clearly this trend is to the upside as I also have a bullish silver recommendation. There is absolute panic as I think the volatility in gold will expand tremendously to the upside in the coming weeks and months ahead so continue to stay long as I see no reason to be short.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Silver Futures

Silver futures in the March contract is currently trading at 14.70 an ounce hitting a six week high this week continuing its slow grinding bullish momentum. I have been recommending a bullish position from around the 14.83 level and if you took that trade continue to place the stop loss under the contract low at 13.98 as I will raise that stop in next week's trade therefor the monetary risk will be lowered. The next major level of resistance is around the 15.05 level, and if that is broken, I think there's significant room to run to the upside as historically speaking silver prices still look very cheap in my opinion. Silver is trading above their 20 and 100-day moving average as the trend is to the upside as we are awaiting the highly-anticipated Federal Reserve announcement on interest rates which will be released later this afternoon as that certainly will send volatility back into this market. I also have a bullish gold recommendation as I do think the precious metals are headed higher as I'm keeping a close eye on platinum as I believe that the situation looks very interesting. The U.S. dollar has sold off recently as that is also helping support silver at the current time so stay long and continue to place the proper stop loss.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Crude Oil Futures

Crude oil futures in the February contract settled last Friday in New York at 51.47 a barrel while currently trading at 45.86 down about 10% for the week continuing its absolute collapse over the last several months due to massive oversupply issues. The U.S. stock market and crude oil continue to mirror each other to the downside with estimates of a major recession coming in 2019 has been thrown upon us as there is absolute panic in both sectors at this time. OPEC has agreed to cut 1.2 million barrels starting January 1st as that might help support prices here in the short-term as I think a lot of the bad news has already been reflected into the price, but I'm advising clients to avoid any type of futures position at this time. Oil prices are trading far below their 20 and 100-day moving average as clearly the trend is to the downside, but the chart structure is terrible as the risk-reward is not your favor as I still think there will be bullish trends come 2019 despite all of this absolute craziness that is circling around at this time.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Platinum Futures

Platinum futures in the January contract is currently trading lower by $4 at 792 an ounce after settling last Friday in New York at 785 up slightly for the trading week. I'm keeping a close eye on this market as I have bullish recommendations in gold and silver. However, platinum is right near a three month low with major support between 760 / 780 as I think prices will catch up to the rest of the sector to the upside. Platinum is still trading far below its 20 and 100-day moving average as clearly the trend is to the downside after topping out on November 7th at 881. However, I think the downside is very limited from these depressed prices. Currently, there are very few trends in the commodity sectors as I'm hoping that 2019 will establish bullish trends as there is just the lack of Interest across the board at this time, but I don't see that lasting much longer so be patient. Volatility at the current time remains relatively low as historically speaking platinum can have large price swings with extreme risk as I think that situation will develop once again.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

S&P 500 Futures

The S&P 500 in the March contract is trading lower for the 7th consecutive trading session hitting a 14 month low and now is trading about 16% off of its all-time high. The S&P 500 is currently trading at 2470 after settling last Friday in Chicago at 2605 having its worst month of December since 1931 as that's how dismal this market has acted in recent weeks. There is absolute panic in my opinion as nobody wants to own anything as the S&P 500 is trading at about 14 times earnings which historically speaking remains relatively cheap as there are major concerns that the United States is going to head into a major recession due to the fact that the Federal Reserve continues to raise interest rates. The S&P 500 is trading far below its 20 and 100-day moving average as clearly the trend is negative as I think it will probably trade at a 20% decline from its all-time high, so there is still room to run to the downside in my opinion. I am currently not involved as the risk/reward is not in your favor to take a bullish or bearish position, but it still looks to me that lower prices are ahead.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

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

TREND: LOWER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY:

Cocoa Futures

Cocoa futures in the March contract is trading at 2271 right near a 5 week high and if you take a look at the daily chart a possible head and shoulders bottom chart pattern may have developed coupled with the fact of a possible rounding bottom as I am looking at a possible bullish position on some type of retracement. The 10-day low stands at major support around the 2100 level as the risk at this point would be around $1,700 which is too much for this commodity at this time. I will be patient and wait for the risk/reward to become more in your favor, but I am certainly not recommending any bearish position as I think cocoa prices have bottomed. Cocoa is trading above its 20 and 100-day moving average as the trend has turned to the upside with major resistance at the double top around the 2400 level as volatility remains very low as we head into 2019.
TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 12.65 while currently trading at 12.27 a pound hitting a 2 ½ month low breaking major support in today's trading session. In my opinion, I believe sugar prices will retest the September 27th low of 10.80 as sugar is used as biodiesel and can follow the price of crude oil over time as that commodity has utterly collapsed and looks to move even lower as nobody wants to own anything. Sugar prices are trading below their 20 and 100-day moving average as the trend is to the downside as prices have broken out of a four-week tight consolidation pattern as overproduction continues to hinder prices here in the short-term. I do not have any soft commodity recommendations as they all continue to sell off as coffee prices hit a 12 year low in today's trading session. If you are short sugar, continue to place the stop loss above the 10-day high which stands at 12.90 as an exit strategy as I am certainly not recommending any type of bullish position as I've talked about sugar on many occasions always with a bearish bias.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Coffee Futures

Coffee futures in the March contract is trading higher for the 2nd consecutive trading session up another 180 points at 102.65 creating a possible double bottom around the 98.60 level. I do not have a coffee recommendation, but I do think prices are minimal from these multi-year lows as I believe 2019 will be a different story as the weather in the country of Brazil will be the main factor to determine where short-term price action goes. Coffee prices are trading for under their 20 and 100-day moving average as clearly the trend is to the downside, but I do think there's a high probability that the contract low will hold, but I will wait for better chart structure to improve as the risk/reward is not in your favor at this time. The Vietnamese harvest is around 85% complete as that should be wrapped up in the next couple of weeks as that will be a favorable situation for coffee prices as seasonally speaking that's generally when a bottom can occur. It will be interesting to see if El Nino in the country of Brazil will have any impact on coffee production as there are pockets of dryness at the current time.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: LOW

Wheat Futures

Wheat futures in the March contract traded lower by 15 cents this week at 5.14 a bushel as this market remains choppy. I have been recommending a bullish position over the last several weeks from around the 5.32 level and if you took that trade continue to place to stop loss under the contract low standing at 5.03. There is very little fresh fundamental news to push prices in either direction as holiday markets are upon us. For the bullish momentum to continue, we have to break the December 13th high of 5.38 as there are still some concerns about Australia's crop losing some production due to drought, however ideal weather conditions in the United States continue to put a lid on prices. Wheat is trading above its 20-day, but still below their 100-day moving average as the trend at the current time is mixed as I will continue to place the proper stop loss as I think the volatility will increase once we enter 2019.
TREND: MIXED - HIGHER
CHART STRUCTURE: SOLID
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.