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 May contract settled last Friday in New York at 15.40 an ounce while currently trading at 15.16 down about $0.24 for the trading week bouncing off of major support which was also right near a three month low. I don't have any precious metal recommendations as silver continues to remain in a choppy chart pattern as we are now trading under their 20 and 100-day moving average as the trend has turned to the downside. However, I do believe the downside is limited. The U.S. dollar is right near a two year high this week as that is what has put pressure on silver and the entire precious metal complex as there are very few strong trends out of the commodity sectors at this time. If you are long a futures contract, I would place the stop loss under today's low as an exit strategy of 14.95 because if that level is broken, you do not want to have any type of bullish position in my opinion.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Crude Oil Futures

Crude oil futures in the May contract is currently trading at 60.14 a barrel after settling last Friday in New York at 59.04 up over $1 for the trading week continuing its bullish momentum. Oil prices have now hit a 4/1/2 month high on strong demand coupled with the fact that Russian output has been lowered which was kind of a surprise as the fundamental picture for crude oil remains bullish. Oil prices are trading above their 20 and 100-day moving average as clearly the trend has been higher in 2019 with the next level of resistance at the 65 level as there is still room to run to the upside in my opinion. If you are long a futures contract, I would place the stop loss under the March 25th low of 58.17 as an exit strategy as this is the strongest commodity to the upside. Oil prices have been following the stock market higher as the recession talk, in my opinion, was way overblown in December. If you have been following my previous blogs, you understand that I'm very bullish the equity market and I think prices will hit all-time highs which should continue to support oil.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE

Natural Gas Futures

Natural gas futures in the May contract is currently trading at 2.67 down about 4 points for the trading day lower for the 4th consecutive session hitting a five week low. I don't have any energy recommendations as I do think natural gas will test major support at the 2.60 level, but I do think the downside after that is very limited as we start to enter the volatile summer months. Natural gas prices are trading under their 20 and 100-day moving average as the short term trend is lower. However, prices have gone nowhere over the last three months as they continually bounce off of major resistance at the 2.90 level as I think that area will be broken sometime this summer. Volatility remains average, but that will change soon as today a lot of a commodity sectors were lower across the board so sit on the sidelines. Wait for better chart structure to develop as the risks/reward are not in your favor to take a short or long position in my opinion.
TREND: MIXED - LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

S&P 500 Futures

The S&P 500 in the June contract is currently trading at 2831 after settling last Friday in Chicago at 2810 as this market still looks to move higher in my opinion. The 10-year note is yielding 2.40% as that is a fundamental bullish factor towards commodities and especially towards stock prices as historically speaking interest rates are very low and don't look to move higher anytime soon. The S&P 500 is trading above its 20 and 100-day moving average as the trend is higher as we will await earnings season in early April as I still think corporations are doing extremely well and I do believe all-time highs in stocks will come about soon. The Nasdaq 100 is extremely strong as major technology companies such as Apple, Google, and Amazon have all rallied significantly in 2019 as these companies look to expand even further as they continually grow as I see no reason to be short the stock market at this time. If you are long a futures contract, I would place the stop loss under the March 25th low of 2789 as an exit strategy as the United States has an outstanding economy which is the envy of the world and that's going to continue for quite some time.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Coffee Futures

Coffee futures in the May contract Is trading higher for the 2nd consecutive session up another 50 points at 94.50 a pound still hovering right near a 14 year low. Many of the commodity sectors have started to rally, but coffee remains in the most bearish trend at the current time, but there is a possibility that yesterday may have created a short term low as prices traded at 92.60 before rallying forming a possible small spike bottom. I'm still sitting on the sidelines waiting to enter into a bullish position as the downtrend line remains intact over the last two months as the volatility remains remarkable low in my opinion, but I don't think there's much more downside ahead. As I have talked about in many previous blogs I thought coffee could go down to the 90 level as there is still that chance, however, if the rest of the commodity markets start to rally coffee will follow so keep a close eye on this market for a possible bullish position soon.
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 was sharply lower this Friday afternoon in Chicago reacting negatively off of the USDA crop report stating that we should plant 92.79 million acres which was 3.66 billion more than 2018 sending prices down nearly $0.18 a bushel. Corn futures are trading at 3.66 hitting a new contract and yearly low as it looks to me that prices could test the 3.50 level as that report had nothing bullish as carryover levels were also construed as negative. I have been talking about corn in many previous blogs looking to buy around the 3.70 level, but I did not initiate the trade as I'm recommending to sit on the sidelines at the current time as that report changed everything at least in the short term. Weather will be the main focus come May 1st as this report will be forgotten about, but in the meantime, nothing looks bullish agriculturally speaking except for cotton so be patient.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Cotton Futures

Cotton futures are sharply higher this Friday afternoon in New York up 146 points at 78.34 in the July contract as the USDA planting intentions report showed only 13.78 million acres for 2019. The average trade guess was around 14.5 million as last year was around 14.1 million as it looks to me that higher prices are ahead. I have been recommending a bullish position from around the 76.70 level, and if you took that trade continue to place the stop loss under the contract low which was touched on February 12th at 72.33 as an exit strategy, however, that will be raised in next week's trade, therefore, the monetary risk will be lowered. Cotton prices have hit a three month high as we are in the midst of spring planting, especially in the deep south as this will now become a weather market as that certainly will dictate where short term price action heads. Cotton prices are trading above their 20 and 100-day moving average as clearly the trend is to the upside so continue to play this higher as I will possibly be looking at adding more contracts if major resistance is broken.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING

Trading Theory

What type of trading indicators do you use? There are dozens of trading indicators which include short term and long term scenarios and too many to mention in this article, but there have been some basic indicators that have been around for many years such as the basic moving average, stochastic, RSI, and Bollinger bands which have become more popular in recent years.

However, there are dozens more that people can use as well, and it depends on your type of trading system if you are a short term day trader you then might use different indicators that a person who's holding positions overnight and doesn't need all the sort short term data.

People also look at volume and open interest which I think is important especially open interest showing you how many people are trading that specific commodity. There are many overbought indicators such as RSI and stochastic which are overbought/oversold indicators if things have had 10 or 12 straight up days there could be overbought conditions and the price might tend to decline or vice versa on the downside if you had many down days a row it could be in an oversold condition causing the prices to move higher.

In my opinion, in the last 20 years, there have been so many new indicators that it's impossible to follow 50 or 75 at once possibly, so my advice is to come up with a trading system use indicators that you are familiar with and paper trade.