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 December contract settled last Friday in New York at 1,297 an ounce while currently trading at 1,324 up about $27 for the week trading far above it's 20 and 100-day moving average. This trend continues to the upside on a weekly basis as prices have now hit a 10-month high. Tensions with North Korea escalated this week as they sent another missile over Japan which continues to support gold prices and I don't think that situation is going away anytime soon. If you are long a futures contract, continue to place the stop loss under the 10-day low which stands at 1,278 as the chart structure is poor because prices have run up rather quickly this week. The U.S. dollar has also hit a 2-year low which is supporting gold & the precious metals across the board with the next significant level of resistance at 1,350. If that level is broken, you would have to think that we could test the $1,400 level. Gold prices will depend on what North Korea and the United States conflict turns into as I don't see any other situation than the United States doing some military action against their nuclear facilities. This problem is getting worse not better as diplomatic negotiations have not worked for years so continue to play this to the upside.
TREND: HIGHER
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the December contract are currently trading at 17.58 an ounce after settling last Friday in New York at 17.13 up about $0.45 for the trading week and continuing its bullish momentum. The precious metals are all in bullish trends at this time as demand has finally come back. Silver prices are trading above their 20 and 100-day moving average telling you that the trend is to the upside with prices looking to retest the June 6th high of 17.92. If that is broken, prices could retest the April highs around 18.90 as the U.S. dollar is hitting a 2-year low helping support silver prices in the short term. As I have talked about in many previous blogs historically speaking I think silver prices are very cheap & could trade back into the low $20 range relatively soon. If you are long a futures contract, continue to place the stop loss under the 10-day low which stands at 16.80. The chart structure will not improve for another week or so as volatility is starting to increase which is a good sign for the bulls in my opinion. If you take a look at the monthly chart it seems to me that the $15 level which has been touched on multiple occasions formed a long-term bottom. I think we are in the midst of a bullish trend for years to come.
TREND: HIGHER
CHART STRUCTURE: SOLID

Crude Oil Futures

Crude oil futures are currently at 46.83 a barrel in the October contract after settling last Friday in New York at 47.87 down about $1 for the trading week despite Hurricane Harvey creating havoc in the state of Texas. Harvey is sending unleaded gasoline futures to multi year highs, but it has not affected crude oil prices. I am recommending a short position from around the 46.40 level and if you took this trade place the stop loss at the 10-day high which now stands at 48.50 as the chart structure is excellent at the current time as volatility certainly has increased this week. Oil prices are trading below their 20 and 100-day moving average telling you that the trend is to the downside, but for the bearish trend to continue prices have to break 45.58. Continue to play this to the downside despite the fact that heating oil and unleaded gasoline futures hit contract highs this week. They are different products and can move in opposite directions just like we're experiencing currently. The Trump administration released some oil out of the strategic petroleum reserve of around 500,000 barrels to try to help increase the supply situation which could be viewed as a bearish fundamental factor.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Natural Gas Futures

Natural gas futures are currently trading at 3.03 after settling last Friday at 2.92 up about 11 points for the trading week still stuck in a 12-week consolidation as a breakout is looming in my opinion. My consolidation theory states the longer the consolidation the more powerful the breakout. Natural gas prices are trading above their 20-day but slightly below their 100-day moving average which stands at 3.06 with the real breakout to the upside at 3.13. Keep a close eye on this market as the energy sector has caught fire this week due to Hurricane Harvey causing havoc in the state of Texas. Natural gas prices have hit a 6-week high as volatility still remains relatively low. However, we are entering the highly volatile autumn and winter months, and I do think a bottom is in place in this commodity, and we could be involved at any point in the coming days. If the prices break the 3.13 level, the next level of resistance is all the way at 3.30 and then possibly the contract high which was hit on May 12th at 3.52. There is room to run to the upside.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Copper Futures

Copper futures in the December contract is currently trading at 3.1060 a pound after settling last Friday in New York at 3.0565 up about 500 points for the trading week continuing its bullish momentum and hitting a 3-year high. I have been recommending a bullish position from the 2.71 level and if you took that trade continue to place the stop loss at the 10-day low which now has been raised to 2.9850. The chart structure will even improve further next week, therefore, lowering the monetary risk as this market continues to grind higher on a weekly basis. I was also recommending a short position in the S&P 500 getting stopped out yesterday as the stock market is right near all-time highs once again and that has helped propel copper prices higher. Couple that with a strong housing market which puts physical copper in high demand at this time. I do think prices could trade as high as 3.20/3.40 in the coming weeks so stay long & continue to place the proper stop loss. Who knows how high prices can go as picking a top is very dangerous over the course of time.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

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.

S&P 500 Futures

The S&P 500 in the September contract is trading higher for the 5th consecutive session. I was recommending a bearish position in the mini contract getting stopped out in yesterday's trade around 2470 as this market is relentless to the upside. It's time to move on & look at other markets that are beginning to trend. The S&P 500 is now trading above its 20 and 100-day moving average after hitting a 6-week low in last week's trade. I hate selling the S&P as I've written about in many previous blogs, but I thought a unique situation was occurring especially with the problem with North Korea. However, this market continues to move higher as the NASDAQ 100 is at all-time highs once again in Friday's trade. One of the main reasons why I recommended a bearish position was the fact that the risk/reward was in your favor and the chart structure was outstanding as it is very difficult to sell this market. I do think it is propped up to the upside as the entire equity market looks to move even higher as low interest rates in the United States coupled with amazing demand from individual investors continues to push prices even higher.
TREND: HIGHER
CHART STRUCTURE: POOR

Coffee Futures

Coffee prices in the December contract are trading higher for the 2nd consecutive session after settling last Friday in New York at 131.40 a pound while currently trading at 130.00 down slightly for the trading week with very little volatility or fresh fundamental news to dictate short-term prices. At present, I'm not involved in coffee, but I'm looking at a possible bullish position in the coming weeks ahead. I think historically speaking coffee prices look cheap as the soft commodities have all rallied off of recent lows and I think that will start to help support prices here in the short term. The trend in coffee still is lower as prices are under their 20 and 100-day moving average as weather conditions in Brazil are still ideal, and we will start focusing on next year's crop as weather will be the main factor on where prices are headed over the next several months. Prices have held major support around the 127 level as prices right now are stuck in a 2-week channel as I certainly expect to see much higher volatility ahead so keep a close eye on this market for a bullish position as I will not enter a short position at these depressed levels.
TREND: LOWER - MIXED
CHART STRUCTURE: SOLID

Wheat Futures

Wheat futures in the December contract is trading higher for the 2nd consecutive trading session up 4 cents at 4.39 a bushel after settling last Friday in Chicago at 4.35 slightly higher for the trading week after rebounding off of oversold conditions. Wheat prices are still trading far below their 20 and 100-day moving average and the trend remains negative. I am not currently involved as I'm looking at a bullish position eventually, but at this point, a bottom may not have been formed just yet. One of the main reasons for weaker prices is a huge Russian crop coupled with ideal weather conditions in the Great Plains driving production numbers much higher than once expected sending prices to new contract lows. Wheat prices hit a fresh low in Tuesday's trade at 4.22, and I think we will start to go sideways as the major bearish trend is coming to an end. Lower Canadian production has also helped support prices here in the last several days so sit on the sidelines and look for a possible bullish entry in the next couple of weeks, as the chart structure is starting to improve and prices are right near a 2-week high with very low volatility.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Sugar Futures

Sugar futures in the October contract settled last Friday in New York at 14.03 a pound while currently trading at 14.30 up about 27 points for the trading week right near a 4 week high. At present, I'm not involved in sugar, but it looks to me that a double bottom around the 13.00 level has occurred. Sugar is used as an ethanol product and as gasoline prices in the United States have skyrocketed due to Hurricane Harvey and I think that is starting to support sugar and corn prices here in the short-term. Sugar prices are trading above their 20-day but still below their 100-day moving average which stands at 14.82 as prices look to retest the August 1st high of 15.16 in the coming weeks ahead. The chart structure is solid, and we could be entering into a bullish position possibly in next week's trade as the risk/reward is starting to become into your favor. Volatility is still relatively low. Therefore, the monetary risk will be relatively low so keep a close eye on this market & look to play this to the upside.
TREND: HIGHER
CHART STRUCTURE: SOLIDG

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.