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 April contract are up $13 this afternoon in New York currently trading at $1,233 an ounce after settling last Friday around $1,235 basically unchanged for the trading week still right near 4 week lows is I’m recommending investors to sit on the sidelines in this market as the trend is currently mixed. Gold futures are trading below their 20 but just barely above their 100 day moving average as the S&P 500 had a terrific week as the Dow Jones cracked 18,000 to the upside as that’s where the interest lies currently as the next major level of support is between $1,180 – $1,220 but sit on the sidelines as the chart structure is absolutely terrible at the current time. If you have followed any of my previous blogs I constantly stress the fact to avoid markets that are choppy as I think the success rate is very low unless you are some type of day trader but I hold positions overnight so look for another market that is beginning to trend and keep an eye on gold as I don’t think we will be trading this market for quite some time. The U.S dollar is still right near 11 year high and that’s always pessimistic commodities in general especially the precious metals but at the current time I just don’t have an opinion on this market as I think we will chop around in the short term.
TREND: MIXED
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the March contract are up $.55 this afternoon still trading below their 20 but above their 100 day moving average telling you this trend is mixed as I’m also advising traders to sit on the sidelines in this market as we were stopped out at the 2 week low around 16.71 last Friday as this market remains extremely volatile but prices continue to move sideways. Silver prices settled last Friday at 16.70 currently trading at 17.35 up about $.65 an impressive week in my opinion as many of the commodity markets are sharply higher today due to the fact that crude oil is up another $2 which is beneficial and supportive to many commodity prices thinking that the giant bear markets might be finished. As a trader I’m always looking for a breakout but at the current time silver looks like it’s in a bottoming pattern in my opinion with no breakout occurring as the real level that you want to look at is 18.50 if prices break above that level I would be recommending a bullish position but at the current time the chart structure is poor so look elsewhere. The one bullish fundamental reason for silver to move higher is the fact that it’s used in electronic components and that business is going to be here for a long time to come so theirs actual demand for silver unlike gold which is just primary used in jewelry as the electronic market should get larger and grow exponentially over the next 10/20 years in my opinion.
TREND: MIXED
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the March contract are trading above their 20 but still below their 100 day moving average settling last Friday at 51.69 a barrel while trading up $1.80 this Friday afternoon currently trading at $53 a barrel right near a 6 week high as the chart structure is starting to improve. I have been advising traders to sit on the sidelines and avoid this market as volatility is extremely high but it does look to me that prices are bottoming here in the short term still waiting for a breakout to occur while maintaining the proper risk management as I do need to see better chart structure as volatility is too high for my blood at the current time. The U.S dollar is still right near 11 year highs as that market is also trending sideways giving little direction for crude oil as prices look to consolidate that massive move down in my opinion over the next several months as I think volatility is going to remain extremely high but avoid this market and look for another trend that’s just beginning. Crude oil has been the leader in recent months to the downside so when you start to see a bottoming formation possibly occur now you’re starting to see many of the other commodities like grains and metals move higher but only time will tell to see if this is a dead cat bounce or the long-term bottom being created
TREND: HIGHER
CHART STRUCTURE: IMPROVING

NASDAQ 100 Futures

The NASDAQ 100 is up for the 4th consecutive trading session hitting a 15 year high and a new contract high as prices continue their torrid pace to the upside this week rallying about 160 points from last Friday’s settlement as the trend is your friend in the commodity markets. I’ve been recommending a bullish position and if you took that trade I would place your stop below the 10 day low which is at 4165 risking around 200 points or $4,000 per contract plus slippage and commission on the mini contract. The chart structure will start to improve in the next week tightening up the stop minimizing risk almost on a daily basis as Apple Computer hit another all-time high this week and many other stocks are hitting all-time highs as well as there’s nowhere else to park your money at the current time since treasury rates are incredibly low forcing investors to buy stocks and I do believe prices will continue to head higher & retest the all-time highs in the next couple of months. The NASDAQ 100 is trading far above its 20 and 100 day moving average after bottoming out around the 4100 level as earnings were relatively solid propelling prices higher but the catalyst has been Apple Computer which has been carrying the NASDAQ on its back at the current time so continue to take advantage of any price dips while maintaining the proper stop loss as I think this market is headed higher.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Orange Juice Futures

TREND: LOWER
CHART STRUCTURE: IMPROVING

Oat Futures

Oat futures in the March contract finished up $.05 this Friday afternoon in Chicago to close around 2.79 a bushel as I’ve been recommending a short position and I also recommended adding on to this position as the chart structure is excellent at the current time as prices are down about $.05 for the trading week continuing its bearish trend. Oat futures are trading below their 20 and 100 day moving average and if you look at the longer-term downtrend line it’s still intact, however many of the grains have broken out to the upside as the bear markets across the board may have ended but as a trend follower I have to stick to the rules and this market has not hit a 10 day high at the current time so remain short. If you didn’t take the original recommendation the stop loss is at 2.91 a bushel risking around $.12 or $600 per contract plus slippage and commission as the next level of major resistance is Thursday’s low around 2.68 and if that level is broken I can see a possible retest of the contract low 2.62 next week but stick to the rules and if we are stopped out at 2.91 then we move on and look for other markets that are beginning to trend.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Corn Futures

Corn futures in the March contract are trading above their 20 and 100 day moving average telling you that the short term trend is higher as I was recommending a short position in this market for quite some time as we got stopped out in Monday’s trade around 3.90 a bushel as this was a very disappointing trade as I thought a special situation developed when prices broke 3.77 however, prices rebounded quickly as I’m sitting on the sidelines waiting for another trend to develop. In my opinion I think this market will have a trading range of around $.25 until spring planting which is right around the corner as I’m going to look at another market that’s trending as I don’t see any fresh fundamental news in the next 6 to 8 weeks to really propel prices higher or lower, but corn does have more fundamental bullish factors than soybeans due to less acreage this year as soybeans will have more acres planted, however move on as choppy markets are difficult. Corn futures settled last Friday around 3.86 while going out around the same price today as volatility has slowed down as we are now in a trading range between 3.80/3.90, however if you are a corn farmer you must come up with a hedging plan so if you have any questions please give me a call as I will help you come up with some type of a risk management plan to limit risk as volatility will certainly increase in the next couple of months. Traders reacted to the USDA crop report which came out Monday reducing carryover levels by about 50 million bushels which was pretty minor in my opinion as prices are stuck in a trading range as 2014 had terrific weather conditions throughout the entire summer with mild temperatures however 2015 is a question mark at this stage.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

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

Live Cattle Futures

Live cattle futures in the April contract continue to experience extreme volatility currently up another 270 points this Friday afternoon in Chicago trading at 153.90 after settling around 151 last Friday up around 300 points for the week still trading near a 3 week high. Cattle futures are trading above their 20 but below their 100 day moving average as I’m recommending speculators to avoid this market as extreme volatility and terrible chart structure have dominated this market since prices broke from 166 down to 147 in 2 weeks as we are now consolidating, however if you are a cattle producer I strongly advise you to take advantage of any rallies and start to hedge as I don’t think prices will stay up at these levels for much longer. Many of the commodity markets seem to be bottoming at the current time as everything does come to an end as we might see some consolidation over the next 6 to 8 weeks but cattle prices historically speaking are still extremely high so don’t be greedy & start hedging a certain percentage of the portfolio as nobody knows where prices can actually go just ask any crude oil producer who didn’t hedge as they are in a world of hurt at the current time. The fundamentals in cattle are still relatively strong as expansion of herds probably will not take place for another 6 months so prices could still remain relatively high.
TREND: MIXED
CHART STRUCTURE: POOR

Japanese Yen Futures

The Japanese Yen in the March contract are trading below its 20 & 100 day moving average telling you that the trend is to the downside as prices hit a 6 week low in Wednesday’s trade only to rally sharply in Thursday’s trade as we are currently slightly higher this Friday afternoon at 8425 in a quiet trade. I’ve been recommending selling the Japanese Yen when prices broke the 8400 level and if you took that trade place your stop loss above the 10 day high which currently stands at 85.61 risking about 140 points or $1,750 per contract plus slippage and commission as the Japanese Yen is a very large contract with big price swings and high risk. The next major level of support is around 8300 which was also Wednesdays low and if prices can break that level I think you could retest the contract low of around 82.00 as quantitative easing in Japan continues to pressure the Yen in recent years as no country around the world wants a strong currency while at the current time the U.S dollar is the king trading near 11 year highs. The reason I took this trade was the fact that the trade met criteria as the risk/reward was in my favor in my opinion and the chart structure was outstanding at the current time of the breakout while risking 2% or less of your account balance on any given trade as a proper risk management technique.
TREND: LOWER
CHART STRUCTURE: EXCELLENTR

Soybean Futures

Soybean futures in the March contract finished up about $.16 for the trading week to close around 9.91 a bushel as I am now recommending a neutral position in soybeans getting stopped out today which was the 10 day closing high as I think I will be sitting on the sidelines in the grain market as there’s really no fresh fundamental news to dictate short-term price action. Soybean futures are trading above their 20 but still below their 100 day moving average telling you that the trend is mixed as South America looks to have another outstanding crop and should produce another record crop but at this time crude oil is starting to bottom and rallying sharply off of recent lows pushing up commodity prices as the dollar also seems to be stalling here in the short term so sit on the sidelines and wait for another market that is currently developing. I’ve been recommending a short position in soybeans for a long time as I’ve been trading this market on a daily basis for at least one year straight so this will be unusual as I will be sitting on the sidelines and I don’t think I will be back until springtime when generally the price peaks out especially if we do have another ideal weather situation like in 2014 as carryover levels are still about 385 million bushels despite the fact that the USDA lowered by 25 million from the last report. Planting expectations are around 86 million acres which will be another increase of 2 million acres which could produce a crop around 4.5 billion bushels but at this point in time I’m tired of looking at a choppy market so move on & so look at other sectors
TREND: MIXED
CHART STRUCTURE: IMPROVING

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.