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.

S&P 500 Futures

The S&P 500 is trading at 2789 after settling last Friday in Chicago at 2777 up another 12 points hovering near a 12-week high as the bullish momentum is continuing to get stronger. I do not have any recommendations in the equity markets, but I do believe higher prices are ahead as you have to remember the Federal Reserve now looks like they will not raise interest rates and that's another fundamental bullish factor towards stock prices. The next major level of resistance is around 2820 / 2825 and if that is broken, I would think prices will hit all-time highs once again as I remain bullish the equity market as I see no reason to be short. The S&P 500 is trading above its 20 and 100-day moving average as clearly the trend is to the upside as the U.S. economy is doing exceptionally well as I shake my head and wonder what the heck happened in December when stock and oil prices plummeted only the rebound sharply in 2019. If you take a look at the S&P 500 as a whole it's only trading at about 16 times earnings which historically speaking is not that expensive as this is not a bubble in my opinion while still having room to run to the upside.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE

Silver Futures

Silver futures in the March contract is currently trading at 15.91 an ounce blamed on profit-taking. Silver prices tested the January 31st high of 16.20 in Wednesday's trade as prices were right near a 7-month high. I'm currently sitting on the sidelines, but I do have a bullish bias towards this commodity as I think the downside is minimal. The entire precious metal sector is higher across the board as gold is also trading up by $5 as the metals look strong in my opinion as I'm certainly not recommending any short position. Silver prices are still trading above their 20 and 100-day moving average telling you that the trend is higher, but for the true breakout to occur prices have to close above the 16.20 level if that does happen, I think prices could head into the 17’s as historically speaking prices look cheap. If you take a look at the weekly chart, the trendline remains intact as the volatility is starting to increase which is a terrific thing to see as silver can have huge price swings on a daily basis with large risk, and I think those days are coming back so look to play this to the upside.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Orange Juice Futures

Orange juice in the May contract is currently trading at 121.90 after settling last Friday at 115.20 up nearly 700 points while trading higher for the 4th consecutive session. In my opinion, I believe orange juice prices are starting to bottom out as this has been languishing in a bearish trend over last six months or so as the commodity markets I think we'll start to rally once this trade agreement comes to fruition in next week's trade. Orange juice is trading above its 20-day moving average but still far below its 100-day which stands around the 132 level as the breakout to the upside stands at 122.80 on a closing basis which was the February 1st high. The trade war between the U.S and China certainly has been problematic towards many agricultural sectors including orange juice, however, if something neutral comes about just the fact that that situation would be finished would be a positive fundamental factor towards all U.S agricultural products. I'm keeping a close eye on this market as the chart structure is excellent due to the low volatility as I think the downside is limited.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Natural Gas Futures

Natural gas futures are currently trading at 2.71 after settling last Friday in New York at 2.65 up slightly for the trading week right near a 3-week high. I am now sitting on the sidelines as it looks to me that prices bounced off major support between 2.55 / 2.60 in my opinion possibly creating a short term bottom. If you are bullish natural gas you could buy a futures position at today's price while placing the stop loss under the 2.57 level as the risk would be around $1,500 per contract plus slippage & commission. However, I am currently patient. The chart structure will start to improve in next week's trade as we could be involved in a bullish position with the next major level of resistance at the 2.90 level. Traders are keeping a close eye on the developing story between the United States and China on a possible trade agreement as that would be a bullish situation for natural gas as that is one of the major commodities China is looking to purchase. Natural gas prices are trading right at their 20-day but slightly below their 100-day moving average as the trend is mixed and we're starting to exit the winter season when volatility generally slows down. That's what I anticipate in the coming weeks ahead.
TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Mexican Peso Futures

The Mexican Peso in the March contract is currently trading at 5214 up 48 points to end the week on a positive note, however still stuck in a 6-week consolidation. I'm keeping a close eye on this currency for a possible short position in next week's trade as prices are right at major resistance around the 5225 level as the risk/reward is starting to become in your favor due to the fact of the extremely low volatility. The Mexican Peso has rallied substantially since late November and looks to be topping out in my opinion as higher oil prices have supported the Peso in recent months. The Peso is trading above its 20 and 100-day moving average as the trend is higher as prices broke out to the upside in the 2nd week of December right around the 4900 level so keep this currency on your radar as we could be involved soon.
TREND: HIGHER - MIXED
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 May contract is currently trading lower by 190 points this Friday afternoon in New York at 72.11 after settling last Friday at 71.86 unchanged for the trading week. I am now sitting on the sidelines waiting for the chart structure to improve as the volatility has come to life over the last several days as prices cracked the 75 level only to sell off 300 points from today's high. Prices are still trading below their 20 and 100-day moving average as the trend is to the downside as prices are still hovering right near a 2-month low. Cotton prices certainly have been hampered by the trade talks with China, and if any favorable situation comes about next week, you would have to think that a bottom would be created in this commodity as demand would come back big time as China is a massive importer of U.S. cotton. Spring planting is right around the corner as the volatility certainly is going to increase as I do believe many of the agricultural markets look cheap especially compared to the powerful U.S. economy.
TREND: MIXED - LOWER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Sugar Futures

Sugar futures in the March contract is currently trading at 13.37 a pound up 23 points for the week as prices are creeping near a 4-month high. I have been recommending a bullish position from around the 12.57 level and if you took that trade continue to place the stop loss under the January 25th low of 12.37 as an exit strategy. Next week we will have to roll over into the May contract as the stop loss will be changed due to expiration so stay long as I still think higher prices are ahead. Crude oil was unchanged in a relatively quiet trading session lending very little support towards sugar. Prices are trading above their 20 and 100-day moving average as the trend has turned higher as prices are right near a 4-month high as I still think prices are looking to test the 14 level soon. The chart structure will not improve for another seven trading sessions so you will have to accept the monetary risk at this time as this is my only soft recommendation as we were stopped out of the coffee trade which did not materialize.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Soybean Futures

Soybean futures in the May contract settled last Friday in Chicago at 9.21 a bushel while currently trading at 9.25 as this market has been stuck in a 4-month consolidation with no trend in sight. Soybean prices are trading right at their 20 and slightly above their 100-day moving average as the longer term trendline remains intact, but in my opinion, wait to see what develops with this March 1st deadline between China and the United States on trade. If some type of positive result comes about on trade, you will see the entire agricultural market rally as they are stuck in the mud right now waiting in limbo. Estimates of this year's planted acres are around 86 million which is about 3 1/2 million less than 2018 as we should not produce a record prop in 2019, but I don't think this market goes anywhere until April as the volatility should also pick up to the upside. I do not have any grain recommendations as the entire sector is moving sideways to lower. However, I do think we are in a bottoming out process as the bearish trends are coming to an end soon.
TREND: MIXED - LOWER
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.