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.

S&P 500 Futures

The S&P 500 in the September contract settled last Friday in Chicago at 2468 while currently trading at 2465 down slightly for the week. I remain very bullish the equity market & if you are long a futures contract the stop loss has been raised to 2448 and in 2 more days that will be raised to 2457. The chart structure has turned excellent because volatility is relatively low except in Thursday's trade when we saw a significant price swing. The Vix, which measures the volatility in the stock market hit a 10-year low in yesterday's trade down to the 11 level which is shocking in my opinion. The bias is to the upside at this time as extremely low-interest rates coupled with a weak U.S. dollar continues to prop up equity prices and I think this trend is going to continue. I'm certainly not recommending any type of bearish position. The S&P 500 is trading far above its 20 and 100-day moving average as this trend is very strong and seems to get stronger on a weekly basis with excellent earnings coming about. This is the perfect storm for higher prices in my opinion so stay long and place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: SOLID - IMPROVING

Copper Futures

Copper futures in the September contract settled last Friday in New York at 2.7225 a pound while currently trading at 2.8765 up about 1500 points for the trading week hitting a two year high. I have been recommending a bullish position from the 2.71 level and if you took the trade continue to place your stop loss at the 10-day low standing at 2.68 which is quite a distance away. However, the chart structure will start to improve in next week's trade, therefore, lowering the monetary risk. In my opinion, it looks like copper prices will retest the May 2015 high around 2.95 & once that's broken I think we will head towards the July 2014 high of 3.27. This market continues to follow the coattails of the stock market as the economy of the United States is surging and once the tax reductions hit this economy, we could be off to the races. Copper prices are trading far above their 20 and 100-day moving average telling you that this trend is to the upside. Strong physical demand for this product due to a strong housing market is pushing up prices as people have to realize how good the U.S. economy is as we are also adding jobs as there is more room to the upside.
TREND: HIGHER
CHART STRUCTURE: POOR

U.S. Dollar Index Futures

The U.S. dollar in the September contract settled last Friday at 93.67 while currently trading at 93.30 down about 37 points for the trading week and traded as low as 93.00 in yesterday's trade hitting a yearly low once again. It's continuing its bearish momentum looking to test the May 2nd low of 91.88 soon and if that is broken look out to the downside. I am not involved in this market, but if you have read any of my previous blogs I am bearish the U.S. dollar, and I think this trend will continue to the downside. It is causing the rest of the commodity markets to start to rally as I have many bullish recommendations on at the current time. The U.S. dollar is trading below its 20 and 100-day moving average telling you that the trend is lower and there is very little support left after the 92 level. I still think we could head down to 88/90 level in the coming weeks ahead which will push up the commodity markets even higher from today's price levels. I'm certainly not recommending any type of bullish position in the dollar as the Euro currency looks to see a 120 point in the coming weeks as well. The Trump administration is pushing for a lower dollar thus helping U.S exports as that's exactly what is occurring and I think that trend will accelerate as time goes by.
TREND: LOWER
CHART STRUCTURE: SOLID

Wheat Futures

Wheat futures in the September contract settled last Friday in Chicago at 4.99 a bushel while currently training 4.84 and now has dropped about $0.90 from its July 5th high of 5.74 as rains in the Great Plains of the United States have put pressure on prices alleviating the severe drought that had taken place earlier in the growing season. I am currently not involved in wheat, but I do believe prices are getting very cheap. I think you're starting to squeeze blood out of a turnip at these levels and I'm looking at entering into a bullish position soon as prices are now trading under their 20-day but still above their 100-day moving average telling you that the trend is mixed, so keep this commodity on the radar. The wheat market is the one that started the rally across the board in the grains as I do believe especially the Minneapolis spring wheat is still in a dire situation. I talk to many farmers who have basically turned their wheat into hay as they gave up on the crop because the drought in the Dakotas and Montana was severe. I think the downside is overdone in my opinion.
TREND: MIXED
CHART STRUCTURE: 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.

Corn Futures

Corn futures in the December contract which is considered the new crop & is currently being grown in the Midwestern part of the United States settled last Friday in Chicago at 3.93 a bushel while currently trading at 3.88 down about 5 cents for the trading week holding major support around the 3.75/3.80 level as heavy rains entered the Midwestern part of the United States putting pressure on prices this week. Corn is now trading under its 20 and 100-day moving average and as I've written about many times as corn keeps flip flopping above and below this technical indicator. I'm not involved in this market, but I do think prices are very limited to the downside especially with the U.S. dollar hitting 11-month lows this week which will support corn and grain prices in general. Traders are awaiting the USDA crop report which will be released in 2 weeks with estimates of production around 13.9/14.2 billion bushels which would still be a decent crop, but not producing the 15.2 billion that occurred in 2016. Avoid this market & look for something else with higher potential.
TREND: MIXED
CHART STRUCTURE: SOLID

Cotton Futures

Cotton futures in the December contract is currently trading at 68.70 after settling last Friday in New York at 68.42 still stuck in a four-week consolidation. I'm not involved with this commodity, but I am looking at a possible bullish position in next week's trade as the chart structure will turn excellent therefore the monetary risk will be relatively low for such a volatile commodity. Cotton prices are trading above their 20-day but still below their 100-day moving average standing at 70.76 which is still quite a distance away. Hot & dry temperatures in some areas of Texas are supporting prices at the current time as traders are awaiting the next USDA crop report which will be released in two weeks and certainly will send some clarity into this market on how well the crop is coming along. The agricultural sector, in general, continues to move higher as it looks to me that the long-term bearish trends are over with as the U.S. dollar is finally starting to affect commodity prices to the upside. It took quite some time to have any impact, but the tide is turning so look to play this to the upside soon.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the October contract is currently trading at 14.40 a pound after settling last week at 14.40. I have been recommending a bullish position from around the 14.00 level and if you took that trade continue to place the stop loss under the 10-day low which stands at 13.73. The chart structure is excellent, and that was the main reason why I initiated the original recommendation. Sugar prices are trading above their 20-day, but still, far below their 100-day moving average stands at 15.45. It looks to me that sugar also has bottomed as improving demand is pushing prices higher despite a huge harvest which is taking place in Brazil at present. That usually creates harvest lows during this time frame. The chart structure will not improve for another eight days, so you have to accept the monetary risk which was small at the time of the recommendation which was only a couple of days ago. I do think prices could head back up to the 16 level in the coming weeks ahead, however if you're not involved wait for some type of price retracement, therefore, lowering the monetary risk before entering into a new bullish position.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in the September contract settled last Friday in New York at 136.55 a pound while currently trading at 138.30 up nearly 200 points for the trading week. I have been recommending a bullish position over the last several weeks around the 132 level and if you took that trade continue to place the stop loss under the 10-day low which now stands at 129.35 as the bullish momentum continues. Torrential rains have developed in Brazil slowing harvest progress and if you couple that with increasing demand pushing prices up right near a ten-week high with the next major level of resistance only an eyelash away at 140. If that is broken, I think we can hit 150 rather quickly as the bullish trends in the soft commodities are upon us the first time in months. Coffee prices are trading above their 20 and 100-day moving average is telling you that this trend is higher as prices bottomed out last month around the 115 level as the commodity markets, in general, continue to grind higher due to a lower U.S. dollar. That trend is getting stronger on a weekly basis, and I now have several bullish recommendations including copper, coffee, cocoa, and sugar.
TREND: HIGHER
CHART STRUCTURE: SOLID

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.