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.

Silver Futures

Silver futures in the July contract settled last Friday in New York at 16.40 an ounce while trading at 16.83 up about 40 cents for the trading week. It remains in a very choppy trend as prices are trading right at their 20-day but still below their 100-day moving average which stands at 17.46 as I'm currently not involved in this commodity. The U.S dollar is down another 60 points hitting a 7 month low, and that is helping support the precious metals and the commodities in general. Silver has been relatively volatile with big upswings, and big downswings so wait for better chart structure to develop and a true trend as well. Historically speaking I still believe silver prices are relatively cheap and that the downside is limited as the volatility should be to the upside in my opinion with prices right near a 3 week high. Prices bottomed out 2 weeks ago around the $16 level which was also major support as we had tested that level multiple times in December. It looks to me that silver prices are headed higher, but the risk/reward needs to be in your favor which at this time is not.
TREND: LOWER
CHART STRUCTURE: SOLID

Crude Oil Futures

Crude oil futures in the July contract settled last Friday in New York at 48.17 a barrel while trading at 50.70 up about $2.50 for the week. The U.S. dollar has now hit a 7 month low and is starting to propel crude oil and many other commodities to the upside. Oil has been incredibly choppy over the last several months as I'm not involved in this marker as the chart structure does not meet my criteria to enter into a bullish position as prices are now looking at testing the April 12th high of 54.15 in my opinion as the commodity markets are starting to look bullish. OPEC is looking to continue the production cuts through 2018, and that has also supported prices. Crude oil is now trading above its 20-day moving average, but still below its 100-day which stands at 51.24 which is just an eyelash away. The stock market has come back sharply over the last couple of days which is also supportive of oil prices, and we are starting to see high volatility in many different sectors. Crude oil prices haven't gone anywhere over the last 6 months as every time we start to rally U.S. rig counts increase, and then the prices go back down and then demand kicks in sending prices higher. However, I can finally smell trends developing as 2017 has lacked trends.
TREND: HIGHER
CHART STRUCTURE: POOR

U.S. Dollar Index Futures

The dollar index in the June contract is trading lower 6 out of the last 7 trading sessions down by another 65 points at 97.12 & down over 250 points for the week testing prices we have not seen since November of 2016. Turmoil in Washington D.C. is putting pressure here in the short term. I think this situation is very positive towards commodity prices and I think bullish trends are starting to develop as we enter the volatile summer months. The dollar is now trading under the 20 and 100-day moving average with the next major level of support at 97.00, and if that is broken, we could head all way down to 94.00. This is a positive thing towards commodity prices which have been stuck in the mud & have been extremely choppy in 2017, so there might be some light at the end of the tunnel in my opinion. The chart structure at the present time is poor as the 10-day high is too far away. I'm not involved in this market, but I'm certainly not recommending any type of bullish position as that would be counter trend trading and the trend clearly is to the downside.
TREND: LOWER
CHART STRUCTURE: POOR

Lean Hog Futures

Lean hogs in the July contract settled last Friday in Chicago at 78.60 while currently trading at 79.77 and continuing its bullish momentum right at fresh yearly highs. I'm not involved in this market as the chart structure was very poor as prices went straight down and then straight up, but it certainly does look to me that higher prices are ahead. Traders are awaiting Monday's cold storage report, and that should bring high volatility next week with the next significant level of resistance around the 82.00 level. This market has basically caught up to cattle prices in my opinion which remain strong and I still think cattle prices are going even higher on strong demand as the livestock sector continues to move higher as we enter the summer demand season. Hog prices are trading far above their 20 and 100-day moving average telling you that the short-term trend is higher as the U.S. dollar continues its bearish momentum hitting a 7 month low, which is also bullish hog prices coupled with the fact of strong demand coming out of China. This market has strong fundamentals at the present time so stay bullish & if you have a futures contract place the stop loss under the 10-day low as an exit strategy in my opinion.
TREND: HIGHER
CHART STRUCTURE: POOR - IMPROVING

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.

Soybean Futures

Soybean futures in the July contract settled last Friday in Chicago at 9.63 a bushel while trading at 9.50 down about $0.13 for the week and over $0.30 in Thursday's trade. The Brazilian Real dropped about 7% in one day which is a huge move sending anything that is grown in the country of Brazil sharply lower for the trading session. The U.S dollar is down another 50 points this Friday afternoon continuing its bearish trend hitting a 7 month low which is starting to support commodity prices finally. However, soybean prices are still trading under their 20 and 100-day moving average telling you that the short-term trend is lower. At the present time, I'm not involved in this commodity as prices look to test the April 11th low of 9.41 as estimates are around 45% planted at this time which is historically right on schedule as ideal weather conditions persist in the Midwestern part of the United States. The chart structure is very solid at the present time. However, I will not take a short recommendation if prices break as we are in the midst of the growing season as the volatility certainly will expand as I'm still looking for the breakout above the 9.75 level for a bullish position.
TREND: LOWER
CHART STRUCTURE: SOLID

Corn Futures

Corn futures in the December contract settled last Friday in Chicago at 3.88 a bushel while currently trading at 3.90, basically unchanged in a very volatile trading week. Prices dropped in Thursday's trade due to the Brazilian Real falling about 7% sending the grain market and everything grown in Brazil sharply lower. However, prices have rebounded this afternoon. Corn prices are now trading above their 20 and 100-day moving average for the 1st time in months, and I am looking at a bullish position if we break out of the 3 month consolidation at 3.96 which is just an eyelash away. The chart structure is outstanding at the present time coupled with the fact that large money managed funds are short almost 200,000 contracts. I think if prices break that level it will just add fuel to the fire to the upside. Estimates of planted corn are around 90% after this weekend as historically speaking is right on schedule as we enter the hot & dry season as volatility certainly is going to expand tremendously. I think there's a special situation developing at the current time. Remember that planted acres in 2017 are 4 million less than last year and we will not produce a record crop, so this does have real possibilities to the upside so look to play a bullish position in next week's trade.
TREND: MIXED - HIGHER
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in the July contract which is considered the old crop and was harvested last year settled last Friday in New York at 82.18 while trading at 78.70, down about 400 points for the trading week. It traded as high as 87.18 on Monday, which was up 500 points and that now looks to be a blow off top in my opinion. Strong demand was the main reason why the old crop exploded over the last week, and I'm not involved in the new or old crop at the present time. Volatility certainly is upon us and historically speaking volatility expands tremendously during the summer months. December cotton which is the new crop and is currently being planted in the southern part of the United States settled last Friday at 73.72 while trading at 73.40 down slightly for the trading week. I have written about in previous blogs that you must understand the difference between the old/new crop because they can move in different directions. This contract was unable to break the critical 75 level as it is still stuck in the mud and I'm advising clients to avoid at the present time.
TREND: MIXED
CHART STRUCTURE: POOR

Sugar Futures

Sugar futures in the July contract is currently trading at 16.32 a pound after settling last Friday in New York at 15.51 up about 80 points for the trading week hitting a 3 week high. I've been advising clients who were short this market for the last several months to exit at the 2 week high which was at the 16.00 level and the trend currently is mixed. Sugar prices are now trading above their 20-day, but far below their 100-day moving average. The chart structure is solid due to low volatility and sugar has followed the crude oil market which is also hitting a 4 week high in today's trade. That's partly because the U.S. dollar continues to slide to a 7 month low which is finally starting to support commodities after an extremely choppy 2017. Sugar prices bottomed out on May 5th at 15.24, and I will keep a close eye on this market in the coming weeks as we could be involved soon.
TREND: MIXED
CHART STRUCTURE: SOLID

Coffee Futures

Volatility in coffee is starting to increase, and we settled last Friday in New York at 134.95 while currently trading at 131.80 a pound down about 300 points for the trading week. I'm currently not involved in this commodity, but I am looking at a bullish position if prices break the 137.75 level as the chart structure is outstanding at the present time. I will not recommend a short position even if prices make new contract lows because I think the downside is limited. The commodity markets are starting to rally, and I can sense some real trends starting to develop as the U.S. dollar is now hitting a 7 month low. Coffee prices were down 500 points in Thursday's trade because the Brazilian Real dropped 7%. I think all of the bad news has already been reflected in this market. Prices are looking to retest the April 27th low of 128.65 as prices have gone nowhere over the last 4 weeks and the chart structure is outstanding for such a volatile commodity. Volatility, in my opinion, could even get much much higher in the coming weeks so look to play this market to the upside as the risk/reward will be in your favor.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Trading Theory

This rule is crucial, and I witness it being regularly abused, creating tremendous losses that are sometimes difficult to recoup. Never add to a losing position, because if the position continues to go against you, you've now added even more contracts which are all losing money and your account will suffer losses much more than 2%. In some cases 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.