Weekly Futures Recap With Mike Seery

Mexican Peso Futures

The Mexican Peso in the June contract is plummeting this Friday afternoon down 144 points all due to President Trump slapping a 5% tariff on Mexico sending the Peso near a 3 month low. I have been recommending a bearish position from around the 5177 level while adding another contract at the 5140 level and if you took those trades continue to place the stop loss above the contract high which was hit on April 18th at 5287 as an exit strategy. If you have been following any of my previous blogs, you understand that I thought a possible head and shoulders top chart pattern was forming as now it looks to be confirmed. So continue to play this to the downside as the next major level of resistance is at the March 7th low of 2019 as this market looks very bearish in my opinion. If you take a look at the daily chart, the downtrend remains intact as now the volatility has come to life so continue to place the proper stop loss as I think there is significant room to run to the downside. The Peso is now trading far below its 20 and 100-day moving average telling you that the trend has turned negative. I also have a bullish recommendation in the U.S. dollar, which is the strongest currency in the world at the current time and it is used as a flight to quality so continue to play this to the downside.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

10-year Note Futures

The 10-year note in the June contract settled last Friday in Chicago at 125 / 06 while currently trading at 126 / 23 hitting a fresh contract high as the stock market is plunging because President Trump has now placed a 5% tariff on the country of Mexico. I have been recommending two bullish positions with an average price of 124 / 25 and if you took that trade continue to place to stop loss at 124/01 as an exit strategy as I think there is still significant room to run to the upside. As I have talked about in many previous blogs, I believe the 10-year note will trade at 2% as the yield currently is at 2.18% as interest rates around the world are negative as this rate still looks exceptionally high. The 10-day note is trading far above its 20 and 100-day moving average as the trend is higher so continue to place the proper stop loss and stay long in my opinion as I see no reason to be short the bond market. There is very little inflation worldwide as deflation is more of a concern coupled with the fact of strong demand to own U.S. Treasuries.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Copper Futures

Copper prices settled last Friday in New York at 2.6995 a pound while currently trading at 2.6440 down over 500 points for the trading week while trading lower for the 4th consecutive trading session continuing its bearish momentum. I have been recommending a bearish position from around the 2.8240 level, and if you took that trade, the stop loss now stands at 2.7505 as an exit strategy, however in next weeks trade that will be lowered significantly down to the 2.7180 level as the chart structure will turn outstanding. Copper prices have hit an 18 week low and I still believe we will break the January 3rd contract low of 2.56 in the coming days ahead as President Trump has slapped a 5% tariff on Mexico as now we are engaged in 2 trade wars with our two largest trading partners as this is a very bearish situation for copper prices in my opinion. Copper is trading far below their 20 and 100-day moving average as clearly this trend is getting stronger to the downside every week and if you look at the daily chart the downtrend line remains remarkably intact so stay short as I still think prices look expensive.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING

Coffee Futures

Coffee futures in the July contract is trading higher for the 4th consecutive session currently trading at 102.70 a pound after settling last Friday in New York at 93.30 all on concerns about heavy rains and a possible frost hurting production numbers in the country of Brazil. I have been recommending a bullish position from around the 95.80 level and if you took that trade continue to place the stop loss under the contract low, and 14 year low at 87.60 as an exit strategy, however, I will raise the stop in next week's trade therefor the monetary risk will be lowered. Coffee prices are now trading above their 20 and 100-day moving average telling you that the trend has shifted to the upside as we enter the volatile possible frost season in Brazil and that could send prices sharply higher. Continue to play this to the upside as I still think prices will test the 110 level in the coming days ahead. The chart structure is terrible because prices have run up that rather quickly however next week that situation will improve and if you did not take the original recommendation wait for some type of price decline before entering as prices might be experiencing overbought conditions.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

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 settled last Friday in Chicago at 4.04 a bushel while currently trading at 4.33 extending their price gains significantly as extremely wet weather continues to pound the midwestern part of the United States. I live in the state of Illinois, and this is the worst crop I have ever seen, and I'm not even telling you the whole truth because there is no crop as the farms in my local area have given up on planting. I am not involved in corn or the grain market. However, I think higher prices are ahead as I see no reason to be a seller of corn at this time as this could be a disaster production wise. Corn is trading above its 20 and 100 moving average as clearly the trend has turned as I've never seen a market it a multi-year low and then 3 weeks later be right near at 5 year high as that's how crazy corn and the grain market is at this time. Estimates of early production numbers were around 15 billion as I have to think we're going to be about 12 billion bushels and it could even be lower as it is a very long growing season and things can change quickly, but 2019 looks to be awful. Expectations of planting for this Monday's crop report is around 72% which is extraordinary low especially that now we are entering the month of June so if you are long, stay long in my opinion.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Soybean Futures

Soybean futures in the July contract is currently trading at 8.88 a bushel after settling last Friday in Chicago at 8.29 up nearly $0.60 for the trading week all due to excessive rain in the midwestern part of the United States which is delaying planting significantly. I'm sitting on the sidelines. However, I do think higher prices are ahead as anecdotally speaking I live in the state of Illinois, and the soybean crop is the worst I have ever seen it as many farms did not even plant. Traders are keeping a close eye on the 7/10 day weather forecast as there is rain coming, but it doesn't look to be as significant as what we have experienced already as we went a couple of weeks with rain every single day. Soybean prices are trading at a 5 week high and above its 20 and 100-day moving average for the 1st time in months looking to test major resistance around the 9.05 level and if we continue to rain this market will move higher. The crop progress report was released on Tuesday stating that only 29% of the soybean crop has been planted verse the average of 66% and it doesn't look like much planting was done this week. We are in a dire situation as I see no reason to be short at this time as I will be looking at some type of price retracement to enter into a bullish position.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Sugar Futures

Sugar futures in the July contract settled last Friday in New York at 11.66 while currently trading at 11.73 slightly higher for the trading week. I've been recommending two bearish positions with an average price of 12.06 and if you took those trades continue to place the stop loss above the 2 week high which stands at 12.01 on a hard basis only. The commodity markets have been mixed over the last week as President Trump has now placed a 5% tariff on Mexico which is sending a ripple throughout many of the commodity sectors. At the current time out of the soft commodity markets, I have a bullish recommendation in coffee, which is lower in today's trade. Sugar prices remain weak in my opinion as crude oil continues to plunge daily and I think sugar will start to follow as it is used as biodiesel so stay short and continue to place the proper stop loss as the risk/reward is in your favor in my opinion. Sugar prices are trading under their 20 and 100-day moving average, which tells you that the trend is to the downside. However, for the bearish momentum to continue we have to break the May 21st contract low of 11.36 as then I will be looking at adding more contracts to the downside so stay short.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Orange Juice Futures

Orange juice futures in the July contract settled last Friday in Chicago at 100.95 while currently trading at 108.25 up about 700 points for the trading week hitting a 5 week high. I'm not involved, but I'm looking at a possible bullish position in next week's trade as the commodities seem to have bottomed out as I was stopped out of my short sugar recommendation in today's trade. I also have a bullish coffee trade which rallied significantly this week so look to play orange juice to the upside. However, I will wait for some type of price retracement, therefore, lowering the monetary risk. Juice prices are trading above their 20-day but still below their 100-day moving average which stands at the 115 level as the volatility is also starting to increase as the agricultural sectors look to move higher in my opinion. The next major level of resistance stands around the 110 area as there is room to run to the upside as weather concerns in the country of Brazil which is the largest producer of orange juice in the world is helping push prices higher.
TREND: HIGHER - MIXED
CHART STRUCTURE: POOR
VOLATILITY: AVERAGE

Trading Theory

When Should You Enter Into A Trade? I have been asked this question multiple times throughout my 25-year trading career as I try to find the trend before entering into a bullish or bearish position as my rule states. I like to buy or sell a commodity when prices hit a 4 week high or low while still maintaining the proper risk management of 2% of your account balance on any given trade as it must also have excellent chart structure.

Trading with the trend is the most successful way over the course of time and having a 4 week high or low helps establish that the trend has started, now there are a lot of false breakouts, and that's why you must manage risk as picking bottoms and picking tops is a very foolish game over the course of time.

Generally speaking, if prices hit a 4 week low or high, that means the moving averages are also in that direction signaling that a trend is being formed.