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 June contract is currently trading at 1,295 an ounce unchanged for the trading week as the trend remains sideways. If you are long a futures contract, I would place the stop loss under major support which now stands at 1,284 as an exit strategy as I still have a bullish bias towards gold, but the risk/reward is not in your favor to take a position at this time. Gold prices are trading slightly under their 20 and 100-day moving average as the trend is lower to mixed as prices have gone nowhere over the last three months. Volatility remains average as prices topped out last month slightly above the 1,350 level as I still think longer-term gold prices look attractive. However, all the interest remains in the U.S. equity market which is hovering right near all-time highs once again. For the bullish momentum to continue prices have to break the March 25th high of 1,330 in my opinion so be patient and let's see what next week's trade brings as I do believe bullish trends across the board will start to develop soon.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Silver Futures

Silver futures in the July contract is trading at 15.05 bouncing off of major support around the 15.00 level last week as I think a possible short-term bottom is at hand. I do not have any recommendations in the precious metals, but I do believe prices will move higher even though the IMF lowered global growth earlier today putting pressure on prices, but then rallied towards the closing bell. Silver prices are trading right at 20 and 100-day moving average as the trend is mixed. However, the chart structure will start to improve in next week's trade therefor the risk/reward will become more in your favor to enter into a bullish position. Historically speaking as I've talked about in many previous blogs, I think silver prices are cheap as I will not take a short position and if we can get some bullish news, I think that could spark a significant rally to the upside. If you take a look at platinum, it hit a contract high in recent days, and I think that will also start to support silver prices coupled with the fact that the ratio between silver and gold also is historically wide. Volatility at the current time remains relatively low so keep a close eye on this market as we could be involved in a bullish position soon.
TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: LOWER

Natural Gas Futures

Natural gas futures in the May contract is currently trading at 2.66 still hovering near major support at the 2.60 level as snowy conditions have entered several Midwestern states once again helping support prices in the short term. If you take a look at the daily chart prices, have been trading between 2.60 / 2.90 over the last six months as this has been stuck in a very long tight consolidation pattern and I still do believe the breakout will be to the upside. If you take a look at the daily chart we continue experiencing higher lows as that is a bullish technical indicator so look to play this to the upside as the chart structure will start to improve in the next week's trade therefor the risk/reward would be in your favor at that time. Volatility in natural gas remains very low, however once we enter the summer months that situation could change very quickly coupled with the fact if China and the United States agree on trade that would be very bullish towards gas as they have stated in the past that would be one of the major commodities that would be purchased.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

S&P 500 Futures

The S&P 500 in the June contract settled last Friday in Chicago at 2896 while currently trading at 2903 as prices have broken out to levels that we have not seen since early October. If you are long a futures contract, continue to place the stop loss under the two week low which now stands at 2844 as the chart structure will improve daily as I see no reason to be short this market. In my opinion, I do believe prices will break the all-time high which was hit on September 21st at 2961 as fundamentally and technically speaking this market remains very strong. The volatility at the current time is very low as the Vix or the fear index as it's popularly known as is trading at 14 which historically speaking is low and tells you higher prices are expected. The S&P 500 is trading above its 20 and 100-day moving average as the trend remains strong to the upside as we were only about 2% away from making a fresh all-time high & if we can get any bullish surprise next week with some major corporations that could add more fuel to the fire.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Coffee Futures

Coffee futures in the May contract is trading at 93.00 a pound as prices still look to be forming a bottoming out pattern in my opinion. Coffee inventories remain at 2.493 million bags as we are still right near a 4 3/4 year high as inventory levels have been the main culprit for these depressed prices as we are still hovering right near a 14 year low. The chart structure is outstanding at the current time as prices really have gone nowhere for weeks as it still looks to me that a possible bottom was created on April 2nd at 91.25 as the breakout to the upside stands at the 4 week high which is at 98.70 which could be touched on any given day due to the low volatility. Coffee prices are now trading right at their 20-day but still below their 100-day moving average which stands at the 104 level as I can't imagine this volatility is going to remain at these historically low levels for much longer. Ideal weather conditions in the countries of Vietnam and Brazil which are the two largest coffee producers in the world also continues to put pressure on prices. However, I do believe all of this poor fundamental news has already been reflected in the price as I still think the downside is minimal.
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.

Corn Futures

Corn futures in the December contract finished unchanged at 3.89 a bushel which is considered the new crop and is currently being planted in the midwestern part of the United States as I will now focus on this contract with the rest of the growing season. The WASDE crop report was released this week stating that carry over levels increased slightly now over 2 billion bushels up about 200 million more than expected. However, frigid and snowy weather is entering the western corn belt that could delay some planting as we are now really entering a weather market my opinion. At the current time, 2% of the corn crop has been planted mostly in the southern part of the United States as we will be in full swing next week in my opinion as we will plant around 92 million acres this year as we could produce another outstanding crop unless a drought develops. The last weather problem we experienced was in 2012, and that was devastating especially to corn as prices went up to the 8.50 level. That rally started in mid-June as we had disastrous yields across the midwestern part of the United States and that situation could occur again as I'm very reluctant to take a short position at these depressed prices. I will be looking at a possible bullish position soon, and if you look at the weekly chart, there could be a quadruple bottom that has occurred around the 3.80 level so look to play this to the upside as I think the risk/reward is in your favor to be bullish.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Cotton Futures

Cotton futures in the July contract is ending the week on a positive note up 126 points at 79.00 after settling last Friday in New York at 78.59 continuing its bullish momentum. I have been recommending a bullish position from around the 76.70 level, and if you took that trade, the stop loss has now been raised to 77.41 as the chart structure is excellent due to the low volatility. The cotton crop report was released earlier in the week and was somewhat bearish as prices sold off, but now have rallied to a five-month high as it looks to me that prices will test the next level of resistance between 81 / 83 soon. Cotton prices are trading above their 20 and 100-day moving average as the trend is to the upside as we are now entering the very volatile spring and summer months and if any weather situation develops you could see prices turn sharply higher in my opinion. I will be looking at adding more contracts to the upside possibly in next week's trade as the risk/reward remains in your favor so stay long.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Sugar Futures

Sugar futures in the July contract is trading at 12.92 a pound still hovering right near a 5 week high as I will be recommending a bullish position if prices at the 13.03 level while then placing the stop loss at the contract low which was hit on January 3rd at 11.99 as the risk is around $1,200 per contract plus slippage and commission. The volatility in sugar remains relatively low as it looks to me that prices have finally bottomed out and if you take a look at crude oil that commodity continues to move up daily hitting a five-month this week which is supporting sugar prices as well. Sugar prices are trading above their 20 and 100-day moving average as the trend is to the upside as the chart structure will also start to improve in next week's trade therefor the monetary risk will also be lowered, however I would like to give this trade some room as I do think prices will retest the 13.50 level soon.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Orange Juice Futures

Orange juice futures in the May contract is trading lower for the 9th consecutive session down another 70 points at 106.45 as prices have collapsed over the last several weeks. Ideal weather conditions in the state of Florida coupled with the fact that we have the largest carryover level that we've seen in years as fundamentally and technically speaking this market remains negative. My only soft commodity recommendation is a bullish cotton trade, but it does look to me that prices will retest September 28th, 2015 low of 103.45 and if that is breached we could break 100 in the coming days ahead. Orange juice prices are trading far below their 20 and 100-day moving average as the frost season is now behind us as I see no reason to be bullish juice. Juice prices are experiencing oversold territory, but it looks to me that any kickback will probably be another selling opportunity and if you are short my recommendation would be to stay short and continue to place a trailing stop loss.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: AVERAGE

Live Cattle Futures

Live cattle futures in the June contract settled last Friday in Chicago at 120.35 while currently trading at 121.45 right near a three week high. I have talked about cattle in many previous blogs as I still believe higher prices are ahead and if you are long a futures contract continue to place the stop loss under the two week low standing at 118.70 as I still believe prices will test the March 22nd high of 124.90 possibly in next week's trade. Cattle prices are now trading above their 20 and 100 day moving average as the trend remains to the upside as there is still a lot of uncertainty about the devastation that took place especially in the state of Nebraska so continue to place the proper stop loss as I still believe there is significant room to run to the upside. Another round of snow and blizzards has entered the Great Plains area once again, and that is also helping support prices coupled with the fact that we are entering the strong demand season for pork and beef as hog prices are right near a contract high as well. If the 118.70 level is broken, it would be time to exit move on and wait for better chart structure to develop, but at the current time, it looks to me that another leg to the upside is underway.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

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.