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 December contract continued their bearish trend down another $7 this afternoon in New York currently trading at 1,220 an ounce trading far below their 20 & 100 day moving average as I’ve been recommending a short position when gold prices broke 1,278 which was the 4 week low at the time and if you took that recommendation make sure you place your stop above the 10 day high as I think there’s a high probability that prices will retest December 31st 2013th low of 1,186 in the coming months. The U.S dollar continues to make new highs against the foreign currencies which is very pessimistic gold prices also due to the fact that the Federal Reserve is ending quantitative easing as there is very little bullish fundamental news as all the interest currently is in the S&P 500 which is hitting another all-time high so continue to play this to the downside and if you are not in this market on the short side sit on the sidelines and look for any rally to get short while placing your proper stop loss of 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the October contract finished down about $.60 this Friday afternoon in New York having another wild and crazy trading week with high volatility as I’ve been recommending a short position when prices closed below 92.50 however then prices shot up to around $95 almost getting stopped out before selling off once again as the trend still remains bearish in my opinion. Crude oil futures are trading below their 20 and 100 day moving average telling you that the trend is lower and if you took my original recommendation a stop loss now has been moved to the 10 day high at 95.15 or $2,600 risk per contract as there as major support is around the 90.50 level which was hit twice in the last 10 days only to rebound sharply due to the fact that of the ISIS problem developing in the Middle East. The commodity markets were slammed to the downside once again today including silver which was down almost $.70 and that is bearish precious metals as well as crude oil prices so continue to play this to the downside as I do think prices are headed lower as the world is awash in global supplies as the United States is becoming an exporter and that is the reason why we have not seen such price spikes due to problems in the Middle East because we don’t rely on them as much as we used to and that’s a terrific situation in my opinion also pushing prices lower in the long run.
TREND: LOWER
CHART STRUCTURE: IMPROVING

10 Year Note Futures

The 10 year notes in the December contract are currently trading at 123-26 basically unchanged for the week as the Federal Reserve announced that quantitative easing will end in the next couple of months sending yields sharply higher on Wednesday currently yielding 2.61% hitting an 8 week low in the futures contract. I’m still recommending a short position placing your stop above the 2 week high as the trend remains to the downside in my opinion as the stock market is hitting all-time highs once again today as money continues to flow out of gold and the bond market back into the S&P 500 and I do believe that trend is going to remain for the remainder of 2014 as the chart structure in the 10 year note is outstanding at the current time and if you’re not short this trade take advantage of any type of rally as I think there’s a possibility that yields could trade as high as 3% in the next month or so despite the fact that worldwide interest rates are at all-time lows due to the fact that many other countries are increasing their quantitative easing.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Copper Futures

Copper futures in the December contract had a volatile trading week in New York currently trading at 3.09 a pound after trading higher by 1000 points in Tuesday’s trade on rumors that the Federal Reserve was not going to end its quantitative easing, however they did state that they will end in the next couple of months sending copper prices right back down. I’ve been recommending a short position from 3.10 while placing your stop above the 10 day high which currently stands at 3.23 and that stop will be lowered later next week as the chart structure will start to improve. The precious metals in general have been very bearish with silver & gold hitting new yearly lows as the U.S dollar continues to pressure the precious metals and I do think copper has a high probability of breaking 3.00 in next week’s trade. I’ve been very pessimistic the commodity markets as a whole as the trends continue to go lower as all the interest is in the stock market which hit another all-time high once again today so continue to play this to the downside and take advantage of any rallies making sure you place the proper stop loss as my exit strategy is always the 10 day high if I have a short position as the theory states I don’t want something to go against me for more than 2 weeks because that tells me that the trend has changed as I am a short-term trend trader.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in the December contract posted negative price action this week settling last Friday at 184.55 currently trading at 180.10 still trading below its 20 and 100 day moving average and if prices break 180 I would be recommending a short position while placing my stop above the 10 day high of 196 risking 1600 points or $6,000 per contract as the chart structure will improve in the next couple of days and that stop will be lowered tremendously. The next level of support is 165 – 170 as the commodity markets as a whole continue to move lower due to the fact that the U.S dollar continues to move higher as investors are taking money out of Europe while putting it into the dollar as a safe haven pushing commodity prices even lower as traders are keeping a close eye on the weather in Brazil as back to back droughts are very rare in my opinion as prices look to head lower. I have been sitting on the sidelines in coffee for several months waiting for better chart pattern to develop and currently I think that situation is at hand so look to play this to the downside especially if prices settle under 180 in the December contract.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Soybeans Futures

Soybean futures in the November contract are down another $.13 this Friday afternoon in Chicago hitting multiyear lows at 9.58 a bushel as the trend remains extremely bearish in my opinion & if you are still short this market which I’ve been recommending for several months continue to place your stop above the 10 day high as an exit strategy, however the trend seems to be getting stronger to the downside on a weekly basis as harvest is about to begin. The last crop report stated that we are expecting 3.91 billion bushels which is all-time record with a carryover level historically high at 475 million bushels as the U.S dollar continues to move higher against the foreign currencies putting pressure on the soybean complex which has no bullish fundamental news so continue to play this to the downside as I do think there’s a possibility that soybeans could break $9 a bushel come harvest time. If you look at the daily soybean chart prices have not hit a 2 week high since the month of May which is remarkable that is why I use that rule as it allows you to stay in the trend as long as possible as this year’s crop is one for the record books as I’ve never seen such outstanding weather in the 20 years that I have been trading as this will be difficult to duplicate in 2015, however reports of around 86 million acres being planted next year which would be another record high which in my opinion could really punish soybean & corn prices in the year 2015 especially with outstanding weather as the grain market is entering a secular bear market.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Wheat Futures

Wheat futures in the December contract continue to plummet down another $.13 at 4.75 a bushel as crop estimates are going higher pushing prices to 4 year lows and if you took my original recommendation and went short at 5.42 a bushel place your stop above the 10 day high which currently stands at 5.34 and that stop will be lowered dramatically in the next couple of weeks as the trend certainly is very strong to the downside as prices are trading far below their 20 and 100 day moving average telling you that the trend is lower. The chart structure in wheat will start to improve dramatically in the next several days as it looks to me that the retest of 4.50 a bushel in the cards possibly next week as excellent crops around the world and a strong U.S dollar continues to pressure wheat and the rest the grain complex and I don’t think prices are going to rebound in 2014. The trend is your friend in the commodity markets and the trend is very strong to the downside but if you missed this trade sit on the sidelines and look for another market to enter as the horse has left the barn. Wheat futures have dropped about $3 since early May as this bear market seems to be relentless as many of the commodity markets continue to hit new lows in 2014 due to oversupply and lack of demand as all the interest is in the stock market currently which hit all-time highs once again so continue to place your stop at the 2 week high as this trade still has room to run in my opinion.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Corn Futures

Corn futures in the December contract hit another multiyear low currently trading at 3.34 a bushel as I continue to remain bearish corn and the grain market as we are now starting harvest which was about 4% complete as this crop is going to be one for the record books and I still think there’s a high probability that corn prices trade around $3 a bushel in the next couple of months as supply problems will continue to pressure this market as we just have too large of a carryover at the current time. This year’s crop is projected at 14.4 billion bushels with a carryover level just over 2 billion which is historically extremely high as the threat of frost has subsided so continue to play this to the downside, however if you have missed this market and have not been short sometimes you don’t want to chase markets as you’re going to have to look at new break out in another commodity as you have missed the boat to the downside. The U.S dollar continues to make new highs against the foreign currencies which is very bearish grain prices as the chart structure is outstanding and if you’re still short this market make sure you place your stop loss above the 10 day high as your exit strategy as I believe harvest pressure is starting to take place and will continue to do so throughout the next several months.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the October contract had a wild trading week still trading below their 20 and 100 day moving average settling last Friday at 13.78 while currently trading at 13.50 slightly lower for the week showing a massive reversal in Wednesday’s trade when prices traded as low as 13.32 and then rallied 70 points to close right around 14.00 as a possible spike bottom may have been created. I have been recommending a short position in sugar for many months and if you’re still short place your stop above the 10 day high which currently stands at 15.14 and that stop will be lowered on a daily basis as the chart structure will improve as this market has completely fallen off a cliff and has been one of the best trades in the year 2014. Production in Brazil could be very large this year which is pressuring prices currently while also having large worldwide supplies as the commodity markets and especially the agricultural markets continue to be bearish so play the 10 day rule currently and we will probably have to rollover into the March contract next week as sugar prices still remain weak in my opinion.
TREND: LOWER
CHART STRUCTURE: POOR

When Do You Enter A Trade? What are your rules to initiate a trade on the long or short side of the commodity market?

I have been asked this question many times throughout my career and my opinion is simply to buy on a 20-25 day high breakout in price on a closing basis only or sell on a 20-25 day low breakout to the downside also on a closing basis. Many times the price will break the 25 day high and sell off later in the day only to have your trade be negative very quickly. I would rather buy the commodity at a higher price on the close because that gives me more confidence that the market has truly broken out. However there are more ways to skin a cat and this is not the only answer because some other trading systems might rely on different breakout rules that have also been reliable. Remember always keeping a 1%-2% risk loss on any given trade therefore minimizing risks because the entry system I use always goes with the trend because I have learned over the course of time the trend is truly your friend in the long run. I also look for tight chart structure meaning a tight trading range over a period of time with relatively low volatility. I try to stay away from a crazy market that hit a 25 day high in 2 trading sessions versus the 25 high that actually took 25 days to create.

WHEN DO YOU EXIT A TRADE?

The biggest question that I have been asked is when do I exit a winning trade and when do I exit a losing trade? In my opinion the rule of thumb that I use is placing my stop loss at the 10 day high if I’m short or a 10 day low if I’m long. The other rule of thumb is to place your stop loss at the 2% maximum loss allowed in your account for any given trade.

If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

SEERY FUTURES ACCEPTS CANADIAN COMMODITY ACCOUNTS

There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: (800) 615-7649


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