Weekly Futures Recap With Mike Seery

Orange Juice Futures

Orange juice futures in the March contract is currently trading at 101.35 after settling last Friday in New York at 100.55 up slightly for the trading week still experiencing very low volatility.

I have been recommending a bullish position from around the 103.30 level, and if you took that trade, continue to place the stop loss under the multi-year low, which stands on December 6th at 97.90 on a closing basis only as the proper exit strategy. Volatility should start to expand to the upside as we enter the volatile winter season for the State of Florida, which could produce a frost that would decimate the orange crop, sending prices sharply higher. However, the 7/10 day weather forecast has ideal weather temperature, as that is why prices have been stuck in the mud. Juice prices are trading above their 20-day but still below their 100-day moving average as the trend is mixed at the current time, but I still do believe that the risk/reward is in your favor to take a bullish position.

I also have a bullish cotton recommendation as we were stopped out of the sugar trade yesterday as I still do believe the agricultural markets are amid bullish trends as I think the downside is limited, so stay long.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Gold Futures

Gold futures in the February contract is sharply higher this Friday afternoon as the United States killed the number 2 leader of the country of Iran sending shockwaves throughout many sectors today. That sent gold up $23 at 1,552 an ounce after settling last Friday at 1,518up about $34 for the trading week.

I have been recommending a bullish position from around the 1,495 level if you took that trade continue to place the stop loss under the 2 week low standing at 1,477 as an exit strategy. However, the chart structure will improve daily next week, therefore, lowering the monetary risk.

Gold prices have now traded higher for the 8th consecutive session looking to test the contract high, which was hit on September 4th at 1,571. I think that will happen in next week's trade as it looks like the 1,600 level is in the cards as there is so much uncertainty in the Middle East at this time as I see no reason to be short.

I also have a bullish silver recommendation as the precious metals across the board look strong as the U.S. dollar continues its bearish momentum, which is a fundamental bullish factor towards prices. Stay long as the volatility seems to expand tremendously, in my opinion, as the risk/reward remains in your favor.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Silver Futures

Silver futures in the March contract settled last Friday in New York at 17.94 an ounce while currently trading at 18.15 up about $0.20 for the trading week, continuing its bullish momentum on escalating tensions with the country of Iran.

I have been recommending a bullish position from around the 17.45 level, and if you took that trade, continue to place the stop loss under the 10-day low standing at 16.95. However, in next week's trade, the monetary risk will be lowered daily.

I also have a bullish gold recommendation, which is sharply higher as fundamentally speaking; these markets look strong. China has increased its stimulus package coupled with the fact that we could end up in a conflict with Iran as we killed their number 2 leader Thursday night, sending shockwaves throughout many different sectors.

Silver prices are trading above their 20 and 100-day moving average, hitting a 2 month high as the next major level of resistance is at the 18.50 level. I think that will be tested in next week's trade, so stay long as this trend is getting stronger weekly.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

10-Year Note Futures

The 10-year note in the March contract settled last Friday in Chicago at 128/21 while currently trading at 129/07 as prices are right near a 4 week high. I will be recommending a bullish position if prices close above 129 /14 while then placing the stop loss under the contract low which was hit on December 13th at 127 / 29 as the risk would be around $1,500 per contract plus slippage and commission as the risk/reward is in your favor.

The yield at the current time stands at 1.81% as tensions with Iran are certainly supportive towards lower yields in the coming weeks ahead. I think prices have bottomed out, and if you take a look at the daily chart, prices have bounced off major support around the 128 /00 level on a half a dozen occasions, so look to play this to the upside.

The 10-year note is trading above its 20-day moving average but still below their 100-day as the trend is mixed to higher. Volatility remains relatively low despite today's activity as I do not see the Federal Reserve raising interest rates in 2020 as rates around the world remain negative in many different countries as prices are in a bottoming out pattern at the current time.

TREND: MIXED - HIGHER
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.

Soybean Meal Futures

Soybean meal futures in the March contract is currently trading at 301.20 a ton after settling last Friday in Chicago at 300.0 unchanged for the trading week as prices have been stuck in a tight 4-week consolidation pattern.

I'm looking at a possible bullish position if prices break the December 18th high of 308 while then placing the stop loss under the contract low, which was hit on December 2nd at 296. The risk would be around $1,200 per contract plus slippage and commission, as I do believe that the risk/reward is in your favor due to the excellent chart structure.

Soy meal is trading below its 20 and 100-day moving average; however, prices continue to flip flop above and below those moving averages as we await the next crop report, which will be released in the next week or so. That indeed will dictate short-term price action as I do think the long-term bottom is at hand. The United States and China will sign their trade agreement on January 15th as that is undoubtedly a fundamental bullish factor towards the soy complex as I want to play this to the upside as the downside is minimal.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 13.54 a pound while currently trading at 13.31 down about 23 points for the trading week as prices hit a 3-week low in yesterday's trade.

I had been recommending 3 bullish trades with an average price of 12.79, getting stopped out yesterday around the 13.17 level as it is time to become neutral and wait for another trend to develop, which I believe will still be to the upside as prices hit a snag. Sugar prices are now trading below their 20-day but still above their 100-day moving average as the trend is mixed. However, the volatility remains low as I don't think that the situation is going to last much longer as I will be looking at another bullish position possibly in the coming weeks ahead while waiting for the chart structure to improve. The risk/reward also becomes more in your favor.

At the current time, my only other soft commodity recommendation is in cotton and orange juice as many of the commodities were lower today because the United States might have a possible conflict with Iran sending panic throughout many sectors. However, I still believe 2020 prices will continue to move higher.

TREND: MIXED - HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Lean Hog Futures

Hog futures in the February contact are sharply lower this Friday afternoon in Chicago down 290 points at 68.65, hitting a 2 week low after settling last Friday at 70.57. The price has now dropped about 400 points just from yesterday's high as the volatility certainly has expanded tremendously over the previous 24 hours.

I had been recommending a bullish position from around the 69.60 level as it is time to exit around the 68.65 level as this was a disappointing trade as it looked like prices were headed higher yesterday but succumbed to significant pressure in today's trade. Hog prices are now trading below their 20 and 100-day moving average as the trend is mixed as I still believe the chart structure looks excellent. Yet I think higher hog prices are ahead, but when prices hit 2 week-low and your long a futures contract, it's time to move on as the proper money management technique as I do not have any livestock recommendations.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
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.