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.

10-Year Note Futures

The 10-year note in the March contract is currently at 120/23 trading higher for the 2nd consecutive session after settling last Friday in Chicago at 120/18 having a hard time cracking through the 120/00 level was that had been tested on multiple times only to rally. I've recommended a bearish position on several contracts over the last several months, and if you took the trade, the stop loss come Monday's session will be lowered to 121/07 as the chart structure is outstanding due to low volatility. The 10-year note is currently yielding about 2.86% as it is unable to crack the critical 3% level in recent weeks. However, I remain bearish as I think this is just the calm before the storm and I still believe higher interest rates are coming. The U.S. stock market is higher this Friday afternoon, and generally, that sends a bearish tone towards the bond market. But not in today's case as we will await next Friday's monthly employment number which should send high volatility back into the bond sector so stay short & continue to place the proper stop loss and let's see what Monday's trade brings. The 10-year note is still trading far below its 20 and 100-day moving average as the trend is still to the downside despite the recent rally over the last couple of days as I will be looking at adding another short position if the 120/00 level is broken possibly in next weeks trade.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Silver Futures

Silver futures in the March contract are currently trading at 16.55 an ounce after settling last Friday in New York at 16.71 down about $0.15 for the trading week experiencing low volatility once again as this trend remains mixed to sideways. Silver prices are trading below their 20 and 100-day moving average as they have been on the defensive over the last several weeks, but I do not think prices will retest the December 12th low of 15.63. I'm currently not involved in this market as I'm looking for a bullish position to develop. The U.S. dollar is still hovering right near a three year low but has not had any influence on silver prices over the last several months which is surprising. I think one of these days this sleeping giant will wake up to the upside as that could happen any week so keep a close eye on this market and if you're a long-term investor, I still think historically speaking prices look cheap. The commodity sectors have been slowly grinding higher in 2018 and I think that trend is going to continue for several years to come as growth in the United States has certainly come back for the first time in ten years and is now spreading worldwide. I think that will create demand for silver and the precious metals as a whole so be patient and look at other markets that are beginning to trend at least for now.
TREND: MIXED - LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Crude Oil Futures

Crude oil futures in the April contract settled last Friday in New York at 61.55 a barrel while currently trading at 62.80 up about a $1.25 for the trading week right at a two week high. I'm currently not involved in this market as the trend is mixed to choppy. Oil prices are trading barely above its 20 and 100-day moving average as the trend is slightly higher. However, I think this recent rally is a kickback because prices dropped about $8 in 2 weeks earlier in the month following the stock market which also experienced a tremendous selloff in such a short period, but everything has stabilized. The chart structure currently is poor, and I will be patient and wait for that to improve which could take a couple more weeks as strong demand for this product continues to keep prices above the $60 level. I think that's going to continue for some time as strong worldwide economies are a positive fundamental influence on crude oil prices coupled with the fact that the U.S dollar is still right near a three year low. My only recommendation in the energy sector is a bullish natural gas trade as I think oil prices will chop around and consolidate over the next several weeks.
TREND: MIXED
CHART STRUCTURE: POOR
VOLATILITY: SOLID

Natural Gas Futures

Natural gas futures in the April contract settled last Friday in New York at 2.59 while currently trading at 2.63. I've been recommending a bullish position from around the 2.66 level, and if you took that trade, you could place the stop loss at two different levels with the first being at the 10-day low standing at 2.56 as the risk on two mini contracts is around $500 plus slippage & commission. The second stop loss, which I'm advocating is at the contract low which was hit on December 21st at 2.48 as the risk is around $1,000 per two mini contracts plus slippage & commission as this is a counter-trend trade which I don't recommend very often. But I do think natural gas prices are cheap as the downside is very limited in my opinion. I think the risk/reward are in your favor despite the fact that prices are trading under their 20 and 100-day moving average. However, the chart structure is excellent as we have consolidated the recent downdraft in prices that took place over the last three weeks as the 3.00 level has been incredible resistance, but I do think we could test that level again over the coming weeks ahead despite the fact that the winter season is almost behind us. This is my only energy recommendation at the current time, but I still am bullish many commodity sectors so play this to the upside while maintaining a proper risk management of 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: MEDIUM

Lean Hog Futures

Lean hog futures in the April contract are trading higher for the fourth consecutive session after settling last Friday in Chicago at five month lows at the 68.15 level while currently trading at 71.30 up about 315 points for the trading week as prices are now near a three week high. I'm not involved in hogs as my only meat sector recommendation is a bullish position in cattle while keeping a close eye on the hog market. I think a possible spike bottom may have been created in last week's trade. Hog prices are trading right at their 20-day but still below their 100-day moving average, and the trend is mixed in my opinion as the chart structure is also poor. However, that could change over the next couple of weeks as prices have dropped rather dramatically over the last couple months topping out around the 77 level. The U.S. dollar still is near a three year low and I think that will be a positive influence on exports as cattle prices are right near recent highs so keep a close eye on this market. I do believe that the risk/reward is starting to become in your favor. However, I think prices will consolidate over the next several weeks. Volatility is increasing in the hog market and should increase as we enter the spring and summer months as I think prices are relatively cheap at the current time.
TREND: LOWER - MIXED
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 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 March contract settled last Friday in Chicago at 3.67 while currently trading at 3.67 unchanged for the trading week experiencing extremely low volatility and I don't think that will continue much longer as spring planting is right around the corner. I have been recommending two bullish positions with an average price of 3.58, and if you took those trades, the stop loss stands at 3.61. However, in Monday's trade will be raised to 3.64 as the chart structure is outstanding. The next major level of resistance which was touched earlier in the week at the 3.70 level and if that is broken on a closing basis I will be looking at recommending another position to the upside as the risk/reward is in your favor in my opinion. Estimations of the 2018 planted acres are around 90 million which could produce a crop of 14.3 billion bushels which is right near the 2017 levels which is an excellent crop once again. We keep over planting in the United States in my opinion as that has been the main culprit for depressed prices over recent years as its a long growing season and we have not experienced a drought since 2012 as we are overdue for a poor crop. All of the fundamental bad news has been reflected in corn, and I think higher prices are coming. I am also advising farmers not to sell their cash crop at this time as I think they will receive a better price come summertime so stay long & continue to place the proper stop loss as the grain market remains bullish.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cotton Futures

Cotton futures in the May contract settled last Friday in New York at 77.16 while currently trading at 79.82 up about 270 points for trading week rebounding off of major support around the 76.50 level. I am not currently involved, but I do think the trend will continue to the upside. Cotton prices are trading above their 20 and 100-day moving average, but the trend is not strong to the upside as we declined from the contract high from around the 84.50 level which was hit in January. The large money managed funds are still long about 70,000 contracts as they still believe higher prices are ahead. Cotton prices are at a three week high, however my criteria needs a 4/5 week high to enter into a bullish position, but we could be involved in next week's trade as the chart structure will also improve. However, at the current time, the risk/reward is not in your favor to take a bullish position. Traders are awaiting the next USDA crop report which will be released in about 4 weeks and will state how many acres will be planted in 2018 as my estimation will be higher than last year due to higher prices in my opinion, but we will have to see what that report says as strong demand for this fiber continues to support prices despite the recent downdraft in prices over the last month which I think was just a retracement out of a longer-term bullish trend.
TREND: HIGHER - MIXED
CHART STRUCTURE: POOR
VOLATILITY: MEDIUM/b>