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 June contract are currently trading at 1,286 an ounce after settling last Friday in New York at 1,288 basically unchanged for the trading week as I am not involved in the gold market as prices remain right near contract highs due to tensions between North Korea and the United States coupled with the fact of a weaker U.S dollar in recent weeks. Gold prices are still trading above their 20 and 100-day moving average telling you that the short-term trend is higher as we are ending the week on a positive note up about $4 as 1,300 is the main resistance and if that is broken I think we could go to levels before the U. S. election around 1,330 an ounce. At the current time I don't have any precious metal recommendations as silver is right near a 2 week low, but there is demand for gold as there is so much uncertainty in the world at this time and if you are bullish a futures position I would place the stop loss under the 10-day low standing at 1,248 which is still $40 away as the chart structure is not solid at the present time, as I do expect volatility to increase in the coming weeks as well.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures in the July contract settled last Friday in New York at 18.58 an ounce while currently trading at 17.98 down about $0.60 for the trading week as I've been discussing the May contract, but that is near expiration so I will focus on the July contract going forward as I'm not involved in this market at present. Silver prices are trading lower for the 5th consecutive day and if you are long futures contracts I would still place the stop under the 10-day low standing at 17.80 which is just an eyelash way as this market remains very choppy in my opinion. Silver prices are trading under their 20-day but still above their 100-day moving average really going nowhere over the last several months as I do not have any trade recommendations in the precious metals at the current time. The U.S dollar continues to flip-flop up and down on a daily basis and that's why you're seeing the choppy commodity markets as gold prices have also stalled out around the 1,300 level as the precious metals had been rallying due to a possible conflict with North Korea & the United States which now seems to be diminishing on a daily basis.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Copper Futures

Copper futures in the July contract settled last Friday in New York at 2.5860 a pound while currently trading at 2.5470 down about 400 points for the trading week right near a 3 month low. At present I'm not involved in this market, but I do think lower prices are ahead and if you are short place the stop at the 10-day high which in Monday's trade stands at 2.66 as the chart structure will start to improve in next week's trade, therefore, the monetary risk will be lowered as I'm still looking at a short position on any type of rally. Copper prices are trading under their 20 and 100-day moving average telling you that the short-term trend is lower as there is major support at the 2.50 level and if that is broken, I think we could head substantially lower as the commodity markets are having a hard time sustaining any real bullish momentum. Copper prices were trading around the 2.10 level just let last October but with the Trump administration's possible stimulus plan sending copper prices to around the 2.80 level around quickly as now were kind of a no man's land, but the trend is lower so stay short.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Cattle Futures

Live cattle futures in the June contract is hitting a fresh contract high up another 50 points at 117.00 as I'm not involved in this market, but I'm certainly not recommending any type of short position as record open interest is a bullish signal in my opinion as prices look to head higher in the short term. At the present time I'm short the hog market which has completely fallen out of bed over the last 3 weeks, however, its not having any impact on cattle prices as I do think longer term prices are way too expensive, but shorter-term prices still remain bullish. Cattle prices have hit a 1 year high up around 25% off of the contract lows hit just 6 months ago while still trading far above their 20 and 100-day moving average telling you that the short-term trend is higher as China continues to be a large purchaser of U.S beef which is propelling prices higher. The 10-day low in June cattle stands at 109 which is almost 800 points away or $3,200 risk plus slippage & commission at this point as the chart structure remains terrible, so I am avoiding this trade at present as the monetary risk is sky-high.
TREND: HIGHER
CHART STRUCTURE: POOR

Lean Hog Futures

Lean hog futures in the June contract settled last Friday in Chicago at 72.50 while currently trading at 68.20 down for the 5th consecutive trading session as prices have absolutely fallen off a cliff in recent weeks. I have been recommending a short position from the 77.45 level and if you took the trade continue to place the stop loss above the 10-day high at 74.10 as the chart structure will not improve for another 3 trading sessions as the risk remains high at this point. The next major level of support is the contract low which was hit on September 30th, 2016 as there was a head and shoulders bottom that was formed on the weekly chart, as that price stands at 66.40 & if that is broken I think there could be a washout to the low 60s. However, I am surprised at how quickly prices have dropped especially due to the fact that cattle prices hit another contract high today but having very little impact on hogs. The problem in hogs is the expansion has finally come to play as this market was extremely bullish & had a terrific trend from late September until just around a month ago just like the cattle situation now, however reality has set in so stay short but do not add any more contracts as the risk/reward is not in your favor.
TREND: LOWER
CHART STRUCTURE: POOR

If you are looking for a futures broker feel free to contact Michael Seery at 312-224-8140 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 July contract settled last Friday in New York at 16.57 a pound while currently trading at 16.38 down about 20 points for the trading week still stuck in a 2-week consolidation as prices are still right near a one-year low. I'm not currently involved in sugar ,but if you are short as I do have clients who are involved in this marketplace your stop loss above the 10-day high at 17.13 as the next major level of support is the contract low which was hit on April 5th around 16.20 & if that is broken I think prices could head down to the low 15s rather quickly. Sugar prices are still trading below their 20 and 100-day moving average is telling you that the trend is to the downside as overproduction and lack of demand continue to keep a lid on prices as the soft commodities still look weak except for cotton prices. At present, I only have one soft recommendation & that is a bearish trade in the orange juice market, but I am bearish sugar as I do think lower prices are ahead as the chart structure is excellent at present, therefore, allowing you to place a tight stop loss.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Corn Futures

Corn futures in the December contract which is considered the new crop & will be harvested this autumn settled last Friday in Chicago at 3.94 a bushel while currently trading at 3.82 down about $0.12 for the week as I'm not involved in this market as prices have been extremely choppy over the last 6 months. Corn prices are trading below their 20 and 100-day moving average is telling you that the short-term trend is lower with major support between 3.75 – 3.80 as prices have to break that level to continue their bearish trend. Estimates of this year's planted acres are around 90 million which should produce around 13.8 billion bushels weather permitting as we are starting to enter the extremely volatile spring and summer months in corn and in the grain market so look for volatility to expand tremendously over the coming weeks. Estimates of planted corn is around 15% as that should increase over the next week or so as the weather looks ideal for planting , however, the main propeller for higher corn prices is hot and dry weather like we experienced in 2012 sending corn prices to around 8.50 a bushel which was an all-time record price, but avoid this market at present as there is no trend.
TREND: LOWER
CHART STRUCTURE: SOLID

Cotton Futures

Cotton futures in the May contract settled last Friday in New York at 75.62 while currently trading at 79.00 and traded as high as 80.67 in Thursdays trade as I was recommending a short position from around the 76.25 level getting stopped out earlier in the week at the 10-day high around 77.50 level as this market continues to push higher on strong demand. This was a frustrating trade is prices cooperated right in the beginning only to rally sharply and turn on a dime is that's why you need to have an exit strategy is this market has now hit a 3 year high. At present I'm not involved in cotton I'm advising clients to avoid this market you know the trade looks bullish the chart structure is terrible therefore the monetary risk is way too high at this point is trading is only about risk and risk only in my opinion. Cotton prices are now trading above their 20 and 100-day moving average telling you that the short-term trend is higher as the May contract rallied over 700 points in the last two weeks from the lows to the highs in a remarkable recovery so let's move on to look at other trends that are beginning to move.
TREND: HIGHER
CHART STRUCTURE: POOR

Soybean Futures

Soybean futures in the May contract are currently trading at 9.48 a bushel after settling last Friday in Chicago at 9.55 down slightly for the trading week as the volatility has come to a crawl as spring planting is right around the corner and will certainly start to increase volatility in the coming weeks. I've been recommending a short position as I sound like a broken record as I have been involved in this trade for around 7 weeks from the 10.48 level and if you took the trade continue to place the stop at 9.60 which is the 10-day high as something will develop in next week's trade. For the soybean market to continue its bearish momentum prices have to break the April 11th low of 9.29 a bushel as prices are still trading below their 20 and 100-day moving average is the trend is lower. I was also recommending a bearish position in the November contract which is the new crop & if you took that trade from around the 10.01 level place, the stop at 9.68 as the chart structure is outstanding due to the fact of low volatility and sideways action over the last week or so.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

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.