Weekly Futures Recap With Mike Seery

Chart Structure, Futures Trading, gold futures, how to trade futures, mike seery, seeryfutures.com, weekly futures recap, Guest Bloggers, Risk Management,

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 settled last Friday in New York at 1,276 ending the week on a positive note up $11 to close around 1,290 an ounce. Gold prices hit a 4 month low earlier in the week only to rally the last four trading sessions as I think it's just a kickback due to the oversold conditions as the downtrend line remains intact. Gold prices are now trading under their 20 and 100-day moving average as the trend has turned south in the short term with the next major level of support around the 1,250 area as the U.S. dollar hit a fresh yearly high this week as that has put pressure on the precious metals. Low inflation in the United States continues to keep a lid on gold as prices have gone nowhere over the last 6 months as the commodity markets, in general, are lacking trends and excitement at this time. If you are bullish gold I would buy it at today's price level while placing the stop loss under the most recent low which was hit on April 23rd at 1,267 as an exit strategy as the risk would be around $2,300 per contract plus slippage and commission, however like I've stated before I'm recommending clients to sit on the sidelines.
TREND: MIXED - LOWER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE

Silver Futures

Silver futures in the May contract is currently trading at 15.03 an ounce after settling last Friday in New York at 14.95 in a very quiet and non-volatile trading manor. Silver prices are mirroring gold if you take a look at the daily chart as silver also hit a 4 month low this week. However, now has rallied off of major support around the 14.70 level as the trend remains mixed in my opinion. Silver prices are trading right at their 20-day but still below their 100-day moving average as the U.S. dollar has been the main culprit for these depressed prices. However, historically speaking silver still looks very cheap in my opinion and if you're a long-term investor with a buy and hold mentality, I think silver could be the play. The chart structure in silver is outstanding at present due to the extremely low volatility. We could be involved in a bullish position once again as I have a hard time selling silver below $15 and I think we're squeezing blood out of a turnip, so look to play this to the upside once the risk/reward become in your favor.
TREND: MIXED - LOWER
CHART STRUCTURE: OUTSTANDING
VOLATILITY: AVERAGE

S&P 500 Futures

The S&P 500 in the June contract is currently trading at 2927 after settling last Friday in Chicago at 2889 up about 38 points for the trading week continuing its bullish momentum as the NASDAQ-100 hit an all-time high this week. Microsoft and Amazon reported outstanding earnings as that has helped push up prices here in the short-term as fundamentally and technically speaking this market has everything going for it at the current time as I still think there is significant room to run to the upside. If you are long a futures contract, continue to place the stop loss under the 2 week low standing at 2889 as an exit strategy as the chart structure is outstanding due to the fact of extremely low volatility. Earnings season is in full swing, so we will be receiving fresh fundamental news daily as extremely low-interest rates in the United States continue to support prices as it looks like the Federal Reserve will not raise interest rates in 2019 so stay long.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Coffee Futures

Coffee futures in the July contract settled last Friday in New York at 92.90 while currently trading at 93.90 up about a 100 points as prices are now right near a 2 week high. Coffee prices are trading right at their 20-day but still below their 100-day moving average which stands at 103 as I think there's a possibility that a spike bottom was created on April 17th at 89.00 as I will be looking at a possible bullish position in next week's trade. Large money managed funds are short around 81,000 contracts as there are also heavily short the grain market as they believe lower prices are still ahead. However, if we had some spark of bullish news, there could be massive short covering which would send prices higher. The volatility in coffee remains exceptionally low as the soft commodities across the board remain bearish as the U.S. dollar continues to strengthen against the Brazilian Real which is having a negative impact on prices. Coffee has an oversupply issue as the International Coffee Organization has raised carryover levels from 2.29 million bags to 3.1 million, but I do believe all of this fundamental negative news has already been reflected into the price as that's why prices are near a 14 year low.
TREND: MIXED - 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.

Live Cattle Futures

Live cattle in the June contract finished lower for the 5th consecutive session down another 45 points at 114.90 as this market has absolutely collapsed over the last several days dropping about 700 points hitting a 4 month low. I have been talking about cattle for quite some time as I had a bullish bias and if you were long a futures contract, I was recommending that you place the stop loss at 119.60 on a closing basis as you should have exited earlier in the week as there is no reason to be bullish at this time. The chart structure is terrible as there is no reason to take a bullish or bearish position in my opinion as it's time to sit on the sidelines as prices are now trading under their 20 and 100-day moving average as the trend has changed. Damage from the floods in Nebraska looks to not have been as bad as 1st reported as that is why you are seeing lower prices coupled with the fact that hogs have turned quickly finishing limit down in today's trading session which is also putting pressure on cattle as the agricultural markets continue to remain weak. The volatility is exceptionally high as that situation won't change as we enter the strong demand summer season as beef and pork are favorites for Americans during this time frame as I think the downside is limited, however, wait for a better risk/reward situation to develop.
TREND: MIXED - LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Cotton Futures

Cotton futures in the July contract are currently trading at 77.37 after settling last Friday in New York at 78.27 down about 90 points for the trading week as prices are right near a 3 week low. Harvest is in full swing in the southern part of the United States as ideal weather conditions are at hand as prices are now trading below their 20-day but still above their 100-day moving average as the trend is mixed as I am currently sitting on the sidelines waiting for something to develop. Volatility in cotton has come to a crawl over the last several weeks. However, that situation will change dramatically as we enter the summer months as that historically speaking is the most volatile time for cotton because we can experience adverse weather conditions. For the bullish momentum to continue prices would have to crack the April 9th high of 79.57 and for the bearish momentum to accelerate prices would have to break the April 15th low of 76.30 as a breakout is looming due to the tight chart structure.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Orange Juice Futures

Orange juice in the July contract settled down about 600 points for the trading week settling around 104.10 hitting a 7 year low and in my opinion, looks to break the 100 level in the coming days ahead. Juice prices are trading far below their 20 and 100-day moving average as the trend is bearish as fundamentally & technically speaking I see no reason to own orange juice as weak demand and large supplies should continue to weigh on prices. If the 100 level is broken prices could drop down to the 90 area as the trend is strong to the downside and if you are short a futures contract stay short in my opinion. The soft commodities remain bearish as the agricultural markets across the board are having a tough time rallying because there is no agreement between the United States and China on trade. If you are short a futures contract, I would place the stop loss at the 2 week high standing at 114.35 as an exit strategy. However, the chart structure will improve later this week therefor the monetary risk will also be reduced.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE

Soybean Futures

Soybean futures in the July contract is trading lower for the 2nd consecutive session down another 15 cents at 8.75 a bushel hitting a 6 month low as the bearish trend is accelerating to the downside. The next major level of support is the contract low which was hit on September 18th at 8.63, and I believe that will be tested possibly this week as I see no reason to be bullish soybeans or the grain market in general. The planting progress report was released yesterday showing that 1% of the crop has been planted as the majority of soybeans are not planted until May as that had minimal impact on prices today. Weak demand coupled with the fact of huge supplies continues to weigh on this commodity as I remain bearish over the next 3/4 weeks. Soybean prices are trading far below their 20 and 100-day moving average as the trend is to the downside as the trade agreement with China looks to be on hold at this time, and that is also having a negative influence on prices, so if you are short, a futures contract stay short. Corn futures are hitting a fresh contract low in today's trade as the large money managed funds are short across the board and look to be right in my opinion.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: AVERAGE

Trading Theory

What Is A Rounding Top Chart Pattern? A chart pattern used in technical analysis which is identified by price movements that, when graphed, form the shape of an upside down "U." A rounding top may form at the end of an extended upward trend and indicates a reversal in the long-term price movement.

The pattern can develop over several weeks, months or even years, and is considered a rare occurrence by many traders.

This pattern is also described as an inverse saucer. A rounding top represents a sell signal to technical analysts. The initial upwards trend becomes exhausted as the demand for the stock dries up.

The reversal to the downward slope of the rounding top indicates that demand has tapered off and a surplus supply is present; basically, there are more sellers than buyers.