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 settled last Friday in New York at 1,289 an ounce while currently trading at 1,267 down about $20 for the week. I'm currently sitting on the sidelines as prices have now hit a 2 week low and my bias is to the downside. I am bullish the stock market & I think money flows are going to continue to come out of the precious metals and into the equity market and I'm looking at a short position in the next week or so. Gold prices are trading under their 20-day but still above their 100-day moving average topping out around the 1,300 level 2 weeks ago. Prices have been in rally mode in 2017 due to geopolitical tensions throughout the world. I've stated in many previous blogs these always seem to fade away and that's exactly what's happening right now as silver prices continue their decline and I think that will start to put pressure on gold prices here in the short-term. If you are bearish gold, my recommendation would be to sell at today's price level while placing the stop loss above 1,300 as an exit strategy. I will continue to sit on the sidelines as I'm waiting for better chart structure. Therefore, the monetary risk would be lowered as the risk is too high in my opinion at this point time. However, I am certainly bearish gold.
TREND: MIXED
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the July contract have traded lower 9 out of the last 10 trading sessions after settling last Friday in New York at 17.93 while currently trading at 17.22 down over $0.70 for the trading week hitting a 6 week low. I'm not currently involved in this market as the chart structure is terrible. Therefore, the monetary risk is too high. Silver prices are now trading under their 20 and 100-day moving average with major support back down at the 17 level as the equity markets in the United States continue to hit all-time highs. Money flows are coming out of the precious metals so avoid this market as there really is no trend. At the current time, my only recommendation in the precious metals is a short a copper position. I'm negative on gold, but not involved as I still think stocks move higher. Therefore, the precious metals should continue to drift lower. Avoid this market at the present time & look at other trends with better chart structure and a better risk/reward scenario as the trends in 2017 have been tough to come by.
TREND: LOWER - MIXED
CHART STRUCTURE: POOR

Copper Futures

Copper futures in the July contract settled last Friday in New York at 2.5510 while currently trading at 2.60 a pound. I have been recommending a short position from the 2.60 level and if you took that trade continue to place your stop loss above the 10-day high which stands at 2.6255, just an eyelash away. The chart structure is outstanding and the risk/reward is highly in your favor in my opinion. Copper prices are now trading right at their 20 and 100-day moving average, but for this market to continue its bearish momentum prices need to break the recent low of 2.51. Trading is all about risk as copper can be an extremely volatile commodity with huge daily price swings. If you can risk about $650 on this contract, in my opinion, you must take a shot. Copper is my only trade recommendation out of the precious metals. Prices are right at a critical level, in my opinion, however, if we are stopped out, look at other trades that are beginning to trend. There are very few and far between, but we are starting to enter the summer months when trends and volatility come back historically speaking.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Natural Gas Futures

Natural gas futures in the June contract are currently trading at 3.28 after settling last Friday in New York at 3.19. I have been recommending a short position from the 3.17 level and if you took that trade continue to place your stop loss above the 10-day high standing at 3.33. The original risk was around $800 per 2 mini contracts plus slippage and commission. The chart structure in natural gas is outstanding at the present time as prices are above their 20 and 100-day moving average. Colder temperatures in the Midwestern part of the United States are pushing up prices here the last several days, but I will remain short & place the proper stop loss. Many of the commodity markets have experienced incredibly choppy trends in 2017. However, we are entering the summer months and historically speaking the trends and the volatility come back, so we will have to be patient. Natural gas supplies are still extremely high and that is why this market has been in a bearish trend for several years.
TREND: LOWER- MIXED
CHART STRUCTURE: EXCELLENT

Nasdaq 100 Futures

The NASDAQ 100 settled last Friday in Chicago at 5442 while currently trading at 5581 up about 140 points for the week hitting another record high this week. As I've talked about in previous blogs, I'm not involved in this market. However, I'm extremely bullish and still think higher prices are ahead as I'm certainly not recommending any type of bearish position as this trend is very strong. The problem with this market is the chart structure is poor and there is a price gap around the 5460 level. I'm hoping that the price gets filled before entering into a bullish position as prices are trading far above their 20 and 100-day moving average telling you that this trend is strong and who knows how high prices can go. If you take a look at the Dow Jones and the S&P 500, they have not hit all-time highs. I think both of those markets will continue to catch up to the NASDAQ as money flows are finally coming out of the precious metals and into the equity market as the Trump administration tax plans are finally starting to be released. That is extremely bullish for companies in the United States as now it could be a fair game worldwide for the first time in decades. Remember Apple Computer did $80 billion last year in profits and if you take a 20% reduction in taxes which is an increase of $16 billion for one company per year. That is why you see these markets explode to the upside and this will continue in my opinion.
TREND: HIGHER
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.

Corn Futures

Corn futures in the December contract which is considered the new crop & is currently being planted in the Midwestern part of the United States and settled last Friday in Chicago at 3.82 while currently trading at 3.84 a bushel. Volatility is starting to come back into this market as concerns about wet weather delaying planting sent corn up about 9 cents earlier in the week. I am not involved in corn at the present time as this market has been very choppy over the last 6 months with major support at the 3.75/3.80 level with the major resistance at the 4.00 area. Prices have very little fundamental news to push prices in either direction. Corn prices are trading right at their 20-day, but slightly below their 100-day moving average of estimates after this weekend are around 30% planted which is basically right on schedule. Traders are awaiting the next USDA crop report which is 2 weeks away as weather is the main propeller for prices at the present time. Estimates of this year's planted acres are around 90 million which is 4 million less than last year with estimates of production numbers around 13.8 billion bushels which are not a record crop, but still very significant as we still have ample supplies worldwide. Avoid this market as there is no trend.
TREND: MIXED
CHART STRUCTURE: SOLID

Cotton Futures

Cotton futures in the July contract which is considered the old crop & was grown in 2016 settled last Friday in New York at 79.33 while currently trading at 77.90 down about 140 points for the trading week. I'm currently not involved in this commodity as the chart structure is poor at present. Cotton prices are trading right at their 20-day, but still above the 100-day moving average unable to break major resistance at the 80 level. Spring planting is underway in the southern part of the United States and volatility in the month of May will certainly expand. Cotton futures in the December contract which is the new crop and is being planted as I write this article has been unable to break the major resistance at the 75 level. We need some fresh fundamental news to dictate short-term price action as traders are awaiting the next USDA crop report which will be released in 2 weeks with the weather being the primary focus on prices. Cotton is expected to have about 12.2 million acres planted this year and we should produce a near-record crop and that is why you see the difference in prices between the July contract and the December contract as the supply/demand tables are different.
TREND: MIXED - HIGHER
CHART STRUCTURE: POOR - IMPROVING

Soybean Futures

Soybean futures in the July contract settled last Friday in Chicago at 9.60 while currently trading at 9.57 a bushel basically unchanged for the week, but still stuck in a 3-week consolidation. I was stopped out of my short position earlier in the week and now I am waiting for another trend to develop. Soybean prices are still trading under their 20 and 100-day moving average is telling you that the shorter-term trend is lower as this has now become a weather market as spring planting is underway in the Midwestern part of the United States as volatility certainly will increase in the next several months. Expectations of this year's crop are around 4.6 billion bushels with around 90 million acres being planted. Both would be records once again as South America also produced a record crop. Prices have dropped rather dramatically over the last several months, but now things might change due to the weather situation as a possible drought could hit the Midwestern part of the United States as it did in 2012 sending soybean prices to all-time highs. That is why you see prices consolidate as all the bad news has already been reflected in the price.
TREND: LOWER - MIXED
CHART STRUCTURE: SOLID

Wheat Futures

Wheat futures in the July contract settled last Friday in Chicago at 4.21 a bushel while currently trading at 4.30. I have been recommending a short position from the 4.32 level and if you took that trade, place the stop loss at the 10-day high in Monday's trade at 4.41. The risk is only 9 cents or $450 per contract plus slippage and commission as the chart structure is outstanding. Wheat prices are still trading below their 20 and 100-day moving average. Prices hit a yearly low on April 25th at 4.16 only to rally on concerns of the crop in the state of Kansas being damaged due to frigid weather. However, I've seen this story before, so stay short while maintaining the proper stop loss. Corn prices are down 6 cents this afternoon helping push wheat slightly lower. This has become a weather market, but if temperatures warm up, I would think that prices could retest the contract low once again as the risk/reward is in your favor as wheat is a very volatile contract with huge price swings especially as we enter the spring and summer months. At the current time, wheat is my only trade recommendation in the grain market. I was stopped out of my soybean trade earlier in the week after being short for nearly 2 months. The fundamentals in wheat remain bearish as we have ample supplies worldwide.
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.