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.

Copper Futures

Copper futures in the December contract are trading lower for the 8th consecutive trading session currently trading at 2.17 a pound after settling last Friday in New York at 2.24 as I've been recommending a short position from around the 2.31 level and if you took that trade continue to place your stop loss above the 10 day high which is at 2.36 as the chart structure will start to improve in next week’s trade. Prices are trading far below their 20 and 100 day moving average hitting a 6 year low as there is very little demand for this product as oversupply issues keep hampering prices to the downside as I think 2.00 is in the cards over the next week or two so continue to play this to the downside, however if you have missed this trade you have missed the boat as the risk is too high as the 10 day high is too far away so look at other markets that are beginning to trend. The problem with copper prices is China and that's the problem with all the commodity markets as China is the largest importer in the world and at this point in time with so many empty buildings they just don't need this product at the current time and that's why you're seeing multi year lows as the trend is your friend and who knows how low prices can go, but in my opinion lower prices are ahead.
TREND: LOWER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the December contract are trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside hitting a 10 week low as prices settled last Friday in New York at 44.90 while currently trading at 40.50 a barrel down around $4 for the trading week continuing its longer-term bearish trend. At the current time I’m sitting on the sidelines as the chart structure is very poor which means that the 10 day high is too far away risking too much money in my opinion, however keep a close eye on this market as the chart structure will start to improve in next week's trade therefore lowering monetary risk. In my opinion it looks to me that prices are going to test the August 24th low of 39.22 as high inventories continue to pressure prices coupled with the fact of a strong U.S dollar hampering many commodity markets in 2015 and unless OPEC cuts production prices will probably remain on the defensive for some time to come. The weather in much of the United States has been above normal which is putting pressure on heating oil futures because of the lack of demand and therefore putting pressure on crude oil, but we are starting to enter the winter months as that could change very quickly but at the present time the 7/10 day weather forecast remains warm.
TREND: LOWER
CHART STRUCTURE: POOR

Mexican Peso Futures

The Mexican Peso in the December contract settled last Friday in Chicago at 5925 while currently trading at 5963 up 40 points for the trading week as I'm recommending a short position from around the 5920 level and if you took that trade continue to place your stop loss above the 10 day high which stands at 61.00 risking around 200 points or $1,000 per contract plus slippage and commission. I have not talked about the Peso very often in 2015 but if I think I can become profitable I will trade any market and at the current time this has very low volatility so continue to play this to the downside and if you did not take this original recommendation I would still sell at today's prices risking around 140 points or $700 per contract plus slippage and commission. The Peso is trading below its 20 and 100 day moving average still hovering around a 5 week low with outstanding chart structure as I believe the risk/reward in your favor at the current time so continue to play this to the downside as the U.S dollar continues its bullish momentum and I don't think that trend is going to stop. The Federal Reserve looks like it will possibly raise interest rates in the month of December which is causing the dollar to hit a multi month high putting pressure on the foreign currencies so trade with the trend.
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

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.

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 14.46 a pound while currently trading at 15.08 up about 60 points for the trading week as I'm currently sitting on the sidelines waiting for another trend to develop and at the current time I’m advising clients to avoid this market. Sugar prices are highly volatile with many sharply higher and sharply lower trading sessions with major resistance at the peak high around 15.50 and support around the three week low at 14.00 which was hit in Monday's trade as production numbers out of Brazil continue to swing prices on a daily basis. Sugar prices are still trading above their 20 and 100 day moving average telling you that the short term trend is still higher as this has been one of the few commodities that continue to have a bullish trend due to less production in Brazil and key growing regions throughout the world coupled with the fact of very strong demand pushing prices up around 35% from lows hit just 3 months ago. If you’re looking to pick a top I would sell a futures contract at today’s price while placing your stop at 15.55 risking around 45 points or $500 per contract plus slippage and commission, but I am currently involved in other markets with better risk/reward parameters.
TREND: HIGHER
CHART STRUCTURE: POOR

Cotton Futures

Cotton futures in the December contract are trading below their 20 and 100 day moving average as I've been recommending a short position from around the 62.00 level and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 63.85 as the chart structure remains outstanding at the present time. Prices settled in New York last Friday at 61.66 while currently trading at 61.80 up slightly for the week as we will have to roll over into the March contract next week as I still think lower prices are ahead. The long-term downtrend line is still intact as volatility has come to a crawl at the current time, however the commodity markets are melting down right before our eyes and I think that will start to pressure cotton here in the short-term as traders reacted neutral to the USDA crop report which was released on Tuesday lowering production slightly but keeping carryover levels unchanged as there is very little fundamental news to dictate short-term price action. As a trader must trade with the trend in my opinion and the trend in cotton is to the downside with the next major level of resistance at the contract low around 60.00 and if that is broken the bear market is underway as China holds all the cards currently as they hold 50% of the world reserves as demand remains weak.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

Soybean Futures

Soybean futures in the January contract settled last Friday in Chicago at 8.66 a bushel while currently trading at 8.58 down about 8 cents for the trading week still trading below its 20 and 100 day moving average as I've been recommending a short position from around the 8.72 level and if you took that trade continue to place your stop loss above 8.87 which is the 10 day high. Soybean prices reacted negatively to the USDA crop report which was released on Tuesday stating that the United States will produce a record crop around 3.95 billion bushels sending prices to a new contract low as the commodity markets look very weak in my opinion due to a strong U.S dollar so continue to play this to the downside as ample worldwide supplies should keep a lid on prices. South America is off to another excellent growing season as they could produce over 100MMT’s which would be another record crop as carryover levels are very high historically speaking as I see no reason to own soybeans at the current time as I'd rather trade with the path of least resistance which is to the downside so place the proper stop loss risking 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Corn Futures

Corn futures in the December contract settled last Friday in Chicago at 3.73 a bushel while currently trading at 3.60 down around $.13 for the trading week as I've been recommending a short position from the 3.79 level and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 3.84, however the chart structure will start to improve on a daily basis therefore lowering monetary risk next week. Prices are trading below their 20 and 100 day moving average telling you that the trend is to the downside as prices reacted to the USDA crop report which raised carryover and production numbers sending prices to a new contract low so continue to play this to the downside in my opinion as lower prices are ahead. Many of the commodity markets continue to move lower especially crude oil which is also putting pressure on corn prices as I think the next major level of support is 3.50 as volatility is relatively low, but if you have missed this trade move on and look at other markets that are beginning to trend. At the current time I’m recommending many short positions including soybeans and corn as I think oversupply issues will continue to keep a lid on prices for the rest of 2015.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Coffee Futures

Coffee futures in the March contract are trading below their 20 and 100 day moving average settling in New York last Friday at 121.15 while currently trading at 118.80 down over 200 points for the trading week continuing its short-term bearish trend. Prices look to retest the contract low which was hit on September 24th at 117.80 as coffee is acting nonvolatile at the current time as historically speaking coffee is one of the most volatile commodities in the world, but there is very little fresh fundamental news to dictate short-term price action. At the current time I'm sitting on the sidelines waiting for better chart structure to develop, however I do think prices are limited to the downside as I think you're starting to squeeze blood out of a turnip as we start to enter the volatile winter season as in 2014 a drought hit the country of Brazil sending prices sharply higher so keep a close eye on this market for a possible bullish pattern to develop in the coming weeks. Coffee prices have been extremely choppy over the last six months as I've had a couple recommendations that fizzled out but as a trader you can't give up because the trend always comes back it's just a matter of time and patience.
TREND: LOWER
CHART STRUCTURE: SOLID

Cattle Futures

Cattle futures in the December contract settled last Friday in Chicago at 134.92 while currently trading at 130.50 as I've been recommending a short position from around the 141/142 level, however I have offset some of those positions at today’s levels as the risk is tremendous at the current time. Generally I follow the 10 day high rule, however the 10 day high is way too far away with way too much monetary risk as I’ve cut around 70% of my short positions, but I still do believe prices are headed lower, but a possible double bottom could have been created around the 128 level but volatility is at all-time high so you must respect money at the current time. Cattle prices are trading far below their 20 and 100 day moving average as expansion of herds is occurring right before our eyes therefore putting supply onto the market as I do think there's still a chance we could trade as low as 115 in the next couple of weeks, but reduce risk at the present time as trading is all about risk and nothing else. The entire commodity markets seem weak except for a select few but you have to remember prices have been at historical highs for the last three years just like what happened in corn, oil, and many commodity markets in the past as they come to end an in due time.
TREND: LOWER
CHART STRUCTURE: POOR

Trading Theory

This rule is extremely important and I witness it being abused constantly creating tremendous loses that are sometimes difficult to come back from. Never add to a losing position because if the position continues to go against you and now you have added even more contracts which are all losing money your account will suffer loses much more than 2% and in some case adding positions and never getting out of a losing trade has wiped peoples trading accounts down to zero because of 1 or 2 bad trades. Remember always play for another day you will have losing trades and the good traders manage losses and move on to the next possible trade.