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.

Crude Oil Futures

Crude oil futures in the February contract settled last Friday in New York at 36.06 a barrel while currently trading 36.68 as it looks to me that a possible short-term bottom might be place as I’m currently sitting on the sidelines in this market as I was short heating oil offsetting that trade last week as the easy money has already been made to the downside. Crude oil futures are trading below their 20 and 100 day moving average telling you that the short-term trend is lower and if you’re short this market my recommendation would be to place your stop loss above the 10 day high which currently stands at 39.13 as prices are trading higher for the 2nd consecutive trading session. One of the main reasons for crude oil dropping is the fact of extremely warm weather across the northeastern part of the United States sending heating oil prices sharply lower, therefore curbing demand for crude oil coupled with the fact that OPEC did not cut production and actually increased production as it certainly seems that they want lower prices here in the short-term. The U.S dollar has been stagnating around the 98 level lending little support or resistance to crude oil here in the short-term as I’m certainly not bullish crude, but oversold conditions are at hand but I still think crude could break $30 a barrel in early 2016 especially if the warm weather continues.
TREND: LOWER
CHART STRUCTURE: SOLID

S&P 500 Futures

The S&P 500 in the March contract is trading sharply higher for the 3rd consecutive day up another 15 points currently trading at 2051 after settling last Friday in Chicago at 1992 up around 60 points for the trading week. I have been recommending a short position from around the 2044 level and if you took this trade continue to place your stop loss above the 10 day high which stands at 2073 as this has been a highly volatile and frustrating trade as I’ve written about in my previous blogs I very rarely sell the S&P but stick to the rules and the proper stop loss. Generally speaking the week of Christmas is a bullish situation for stocks and this year is no different as we have rallied every single day but I will remain short and if we are stopped out move on and look at other markets that are beginning to trend. This was a high risk trade and should only have been taken with a large trading account because of such huge price swings as we have had 7 straight triple digit moves as this market has gone straight down and straight up as I’m very perplexed about the volatility especially in a shortened Christmas holiday week. The S&P 500 is now trading above its 20 and 100 day moving average as this market has whipsawed over the last several days as the 10 day high will not be lowered so you’re going to have to accept the monetary risk at the present time.
TREND: HIGHER- MIXED
CHART STRUCTURE: EXCELLENT

Silver Futures

Silver futures in the March contract settled in New York last Friday at 14.10 while currently trading at 14.26 an ounce up $.16 for the shortened trading week as I’ve been recommending a short position from around 14.20 and if you took that trade continue to place your stop loss above the 10 day high which was in yesterday trade at 14.40 as we are hanging in there by the skin of our teeth. Silver futures are trading above their 20 day moving average but still below their 100 day telling you that the short-term trend is mixed as the chart structure is outstanding at the current time as prices may have bottomed in the short-term around the 13.62 level but continue to place the proper stop loss. Gold prices have also rebounded from the recent lows currently trading around 1,070 an ounce helping support silver in recent trading days as I’m still not bullish the precious metals, but if we are stopped out look at other markets that are beginning to trend as I don’t want to be short when prices hit a 2 week high. This trade has been a little disappointing as prices dropped $.50 immediately after we sold only to come back dramatically but that’s the way it goes, as we are still short so let’s see what next week’s trade brings as I’m still hoping for a lower prices ahead.
TREND: MIXED
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.

Lean Hog Futures

Lean hog futures in the June contract settled last Friday in Chicago at 75.05 while currently trading at 76.10 up around 100 for the trading week as traders are awaiting the highly anticipated hog report which comes out this afternoon and should send high volatility into tomorrow’s trade. Hog prices are trading right at their 20 day but still below their 100 day moving average as I’m recommending a countertrend trade which I don’t do very often as I’m recommending a short position from around the 76.00 level as I will wait to see what the report states therefore then placing the proper stop loss. Cattle prices exploded this week due to an extremely bullish cattle on feed report sending prices up about 1200 points in the last 4 trading days helping support hog prices in the short term. Hog prices have rallied around 500 points over the last 4 weeks in a remarkable move in my opinion as expansion is occurring at a rapid pace throughout the United States as there are a lot of hogs available at the current time as I do think prices will move lower from today’s price level so continue to sell while placing the proper stop loss risking 2% of your account balance on any given trade.
TREND: MIXED
CHART STRUCTURE: IMPROVING

Cocoa Futures

Cocoa futures in the March contract settled last Friday in New York at 3252 while currently trading at 3250 basically unchanged for the trading week and traded lower for the 7th consecutive trading session before massive short covering sent the market higher this Wednesday. I’ve been recommending a short position from 3350 and if you took that trade continue to place your stop loss above the 10 day high which stands at 3386 as the chart structure is very poor at the current time with high monetary risk due to the fact that prices have fallen out of bed in recent trading days. Cocoa prices are trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside as prices have now hit a 7 week low breaking major support with the next level of support down around the 3100 level and if that is broken before we test the contract low around 3000 in my opinion. As I’ve talked about in previous blogs we are in the high demand season for chocolate as Christmas is on Friday while then demand generally weakens as crops in the Ivory Coast are improving at the current time so continue to play this to the downside, however if you have missed this trade the risk/reward is not in favor so look at other markets that are beginning to trend.
TREND: LOWER
CHART STRUCTURE: POOR

Corn Futures

Corn futures in the March contract settled last Friday in Chicago at 3.74 a bushel while currently trading at 3.65 in a shortened trading week as I was recommending a short position from last Friday around 3.76 while taking profits in yesterday trade as I do think corn prices will trade in a tight trading range. Going into the end of the year I am offsetting some risk on a bunch of different trades as we will go full force come 2016 as I was also recommending a short position in soybean meal futures which I’m also taking profits on as I generally don’t trade like that but these trades are limited to the upside and to the downside so if you took this trade move on and look at other markets that are beginning to trend. Corn prices are trading below their 20 and 100 day moving average looking to retest the contract low of 3.62 as prices were unable to break the 3.80 level as we are stuck in a 7 week consolidation as traders are keeping an eye on South American weather which has been dry in many parts but unable to push prices higher. The chart structure is excellent at the current time as the longer you consolidate the more powerful the breakout will be so be patient and move on and be happy with a small profit as we are in the nonvolatile Christmas season.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

Coffee Futures

Coffee futures in the March contract settled last Friday in New York at 119.00 a pound while currently trading at 119.50 up slightly for the trading week as I'm currently sitting on the sidelines in this market as prices have gone nowhere in recent time, however as I've written about in many previous blogs I think coffee prices are in the midst of bottoming. Coffee prices are trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside, however every single time coffee prices trade around the 1.16/1.18 level prices have rallied as that is acting as major support as I think the downside is certainly limited, but I'm not recommending any type of position at the current time. The soft commodities remain relatively weak as I'm currently recommending a short position in cocoa and sugar as the U.S dollar is certainly keeping a lid on commodity prices here in the short-term so be patient and wait for a trend to develop in this market as we are starting to enter the very volatile months of January and February as a possible drought can break out in the country of Brazil which happened in 2014 sending a prices up about 70% in a matter of weeks as a bottoming process is at hand in my opinion.
TREND: MIXED
CHART STRUCTURE: SOLID

Soybean Futures

Soybean futures in the March contract settled last Friday in Chicago at 8.93 a bushel while currently trading at 8.83 down about $.10 for the trading week as I have been sitting on the sidelines in this market as I was recommending a short position in soybean meal futures which I offset in today’s trade taking a small profit as I think price gains and losses are limited in the soybean complex at the current time. Soybean prices are trading right at their 20 day but still below their 100 day moving average as this market remains extremely choppy coupled with high volatility due to the fact of dryness in Mato Grosso which is the largest soybean planted area in South America causing 40% of the early soybeans to be rated in poor condition presently. Many of the commodities in today’s trade have rallied sharply including the stock market which I’m also recommending a short position as everybody’s running for the exits come year end so keep an eye on soybean prices, but the grain market remains extremely choppy at the current time. Estimates of the South American crop are around 102MMT’s which would be another record crop, however were starting to enter the critical growing months which could send volatility even higher ,but trading choppy markets are extremely difficult to trade successful in my opinion so look at other markets that are beginning to trend.
TREND: MIXED
CHART STRUCTURE: SOLID

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 15.10 a pound while currently trading at 15.15 up slightly for the trading week as I’ve been recommending a short position from around 14.70 as this trade has never been a winner and has flat-out gone against me at the current time. If you took the original recommendation place your stop loss above the 10 day high which currently stands at 15.25 which is only 10 points away as prices are now trading above their 20 and 100 day moving average telling you that the short-term trend is to the upside as many of the commodity markets are higher across the board including crude oil which is up 3% helping support sugar prices currently. Sugar has been one of the few bullish commodities in 2015 and has rallied about 350 points from their contract low hit just 3 months ago as I took a shot to the downside as the chart structure was solid at the time of the recommendation, but make sure you place the proper stop loss and if we are stopped out move on and look at other markets that are beginning to trend as sugar prices have been very resilient in recent weeks. At the current time my only recommendation in the soft commodities is selling cocoa which is also higher today by 40 points , however I still remain bearish that commodity.
TREND: HIGHER -MIXED
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in the March contract settled last Friday at 63.69 while currently trading at 63.18 in a shortened holiday trading week still stuck in a sideways channel with no trend in sight. Cotton futures are trading below their 20 day but still above their 100 day moving average telling you that the short-term trend is mixed as I’m currently sitting on the sidelines looking at other markets that are beginning to trend. The next major level of resistance is at the 4 month high of 65.23 with major support around 61.50 as there is very little fresh fundamental news to dictate short-term price action as we are entering the nonvolatile seasonal months for cotton with low volatility. There has been some bullish fundamental news coming out of Pakistan with the possibility of that country reducing their crop by 30% due to a weak monsoon season, but weak demand coming out of China is offsetting production cuts so you’re going to have to be patient and wait for a trend to develop as that could take some time in my opinion. Many of the commodity markets have been going sideways in recent days as we are winding down 2015 which was terrible for the commodity markets as a strong U.S dollar has pressured many of the commodity sectors to the downside so let’s see what 2016 brings as everything does come to an end eventually.
TREND: MIXED
CHART STRUCTURE: SOLID

Rough Rice Futures

Rough Rice futures in the March contract settled last Friday in Chicago at 11.35 while currently trading at 11.11 down over $.20 for the trading week hitting a 6 six month low as I’ve been recommending a short position over the last 2 months originally in the January contract as we have now rolled over into the March contract. If you took the original trade make sure you place your stop loss above the 10 day high which currently stands at 11.50 as the chart structure is outstanding at the current time as prices have gone sideways over the last two weeks with major support around the 11.00 level as I still think lower prices are in the cards. The grain market has been relatively choppy recently except for rice prices which continue its bearish trend as weak demand continues to hamper prices here in the short-term so continue to play this to the downside as prices are trading far below their 20 and 100 day moving average telling you that the short-term trend is to the downside. The U.S dollar continues to hover around 98 and is up slightly in today’s trade as that is also keeping pressure on rice prices here in the short-term, as I’m still bullish the dollar as the Federal Reserve announced that they raised interest rates last week as that trend could continue in 2016.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

Trading Theory

The last rule is very simple and it states that one must have a game plan and use it consistently even during periods of loses which will happen to you over the course of time. Do not suddenly start to risk 5-10% because you have to catch up and get your loses back quickly, stick with the game plan and over the course of time this will help improve your percentages of success. If you have an unproven system that has not been tested then I would look to paper trade the account until you see success and you are comfortable with loses and daily volatility.