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 settled last Friday in New York at 1,232 an ounce while currently trading at 1,224 down about $8 for the trading week while also hitting a fresh contract low earlier in the trading session today all the way down to 1,212 as this market remains bearish, but rallied off of a somewhat negative U.S. unemployment number. Gold prices are still trading under their 20 and 100-day moving average as this trend is to the downside and if you have read any of my previous blogs you understand that I am bearish gold and the precious metals across the board. If you're short, a futures contract continue to place the stop loss above the 10-day high which stands at 1,245 on the closing basis only as I still think the 1,200 level is broken possibly next week. The U.S. stock market is higher once again today as that is where money flows are headed and out of the precious metals. I see no reason to own gold as I still think historically speaking prices look expensive and I think we can trade down to the 1,125 level in the coming months ahead so stay short and continue to place the proper stop loss as today's slight gains were based on profit-taking only. Large hedge funds are short a record amount of gold contracts as they still believe lower prices are ahead as the volatility remains relatively low. However, I don't think that will last much longer.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Silver Futures

Silver futures in the September contract traded lower for the trading week finishing down 5 cents at 15.46 an ounce continuing its bearish momentum as the employment number which was released today sent mixed signals. If you are short a futures contract place the stop loss above the 10-day high at 15.70 as the chart structure is outstanding due to the volatility has come to a crawl. Apple Computer this week was the first company in history to reach a $1 trillion market cap and as I've talked about in many previous blogs that is where all of the interest remains in the U.S. equity market not in silver or the precious metals as money flows continue to flow out of the precious metals and into U.S. equities. I think that trend is here to stay for the rest of 2018 so stay short while placing the proper stop loss. If you take a look at the daily chart, the downtrend line remains intact, and I still think there's a possibility that silver could trade in the mid 14's in the coming weeks ahead as the trend is your friend and the trend in silver remains under pressure. I'm certainly not recommending any bullish position.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Crude Oil Futures

Crude oil futures in the September contract settled last Friday in New York at 68.69 a barrel while currently trading at 68.63 unchanged for the trading week, however experiencing extreme volatility as we had multi-dollar swings on a daily basis as we are still stuck in a 3-week consolidation. Oil prices are trading right at their 20-day, but still above their 100-day moving average as I still have a bullish bias to the upside despite the fact that we witnessed a bearish API report which was released last Wednesday showing a more significant build in supplies, however strong demand continues to support prices here in the short term. In my opinion, there are a lot of variables to push oil prices higher and the first being that we are entering the hurricane season, coupled with the fact that there are still major problems with Iran and Venezuela as production is much lower than previous years. I will wait for the 4-week break out to occur making sure that the chart structure is excellent therefore the risk/reward would be in favor to enter into a bullish position which could happen in next weeks trade. The U.S unemployment number was released this morning stating that we added 157,000 jobs which was slightly disappointing, but the U.S. economy is still extremely strong which will cause strong demand for oil and unleaded gasoline so look to play this to the upside.
TREND: MIXED - HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Natural Gas Futures

Natural gas futures in the September contract settled last Friday in New York at 2.78 while currently trading at 2.84 hitting a 4 week high creating a possible double bottom on July 19th at 2.67 in my opinion as I will be looking at recommending a bullish position possibly in next week's trade on any price retracement. Natural gas prices are now trading above their 20 and 100-day moving average as the trend has turned to the upside. The energy sector remains strong across the board as strong demand continues to push prices higher as President Trump is trying to export natural gas to Europe which will take time to develop but definitely sends a positive spin into this market. The 10-day low currently stands at 2.68 which is a little too much risk at this time. However, the chart structure will improve in next weeks trade, and I will be looking at a bullish position from around the 2.78 level as volatility remains relatively low as we are going to start to enter the volatile autumn and winter seasons soon. I think historically speaking prices look very cheap. Natural gas has traded in a tight consolidation over the last six months basically between 2.70/3.00 as that is a very tight consolidation pattern which I don't think will last very much longer so look to play this to the upside.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

10-Year Note Futures

The 10-year note in the September contract is currently trading at 119/18 up four ticks for the week trading higher this Friday by 9 points. I have been recommending a bearish position from around the 119/16 level & if you took that trade place the stop loss above the 2-week high which stands at 120/03 as the chart structure is excellent at the current time. Volatility in the 10-year presently is extremely low as we have come to a crawl over the last six weeks as I still believe lower prices are ahead as we cracked the 3% area earlier this week, but was not able to sustain that level for very long. The U.S. released its monthly unemployment number today which was slightly negative, and that has supported prices in today's trade. However, we are still trading under their 20 and 100-day moving average as the trend is to the downside. If you did not take the original trade, I am still recommending it at today's levels as the risk is around $600 per contract plus slippage and commission. The fundamental picture for the 10-year note remains bearish as the U.S. economy is on a roll coupled with the fact that the Federal Reserve is probably going to raise interest rates three more times in 2018. However, this market has acted very stubbornly over the last several months, but stay short in my opinion.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

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.

S&P 500 Futures

The S&P 500 in the September contract is currently trading at 2834 after settling last Friday in Chicago at 2817 up about 15 points for the trading week. I've been recommending a bullish position from the 2803 level and if you took the trade continue to place the stop loss at the 10-day low standing at 2791 on the closing basis only as that level was touched briefly in yesterday's trade. The S&P 500 is trading above its 20 and 100-day moving average as the trend is to the upside as the monthly unemployment number this morning showed that we added 157,000 jobs which was slightly bearish. However, the U.S. economy is doing exceptionally well as buyers came in on any as Apple Computer is now the 1st $1 trillion company in the history of the world which is remarkable and in my opinion, you will see many other companies hit that milestone in the next year or so. The next level of resistance is at the 2850 level, and if that is broken, I think we will break the all-time high which was hit on January 29th at 2889. I see no reason to be short this market as this is where all of the interest lies and is also the strongest trend to the upside and has a lot more room to run in my opinion. If any positive solution comes out of NAFTA or the Chinese tariff escalation, you will see this market explode to the upside as that has kept a lid on prices over the last several months and I do believe eventually positive news will come about so stay long and continue to place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Wheat Futures

Wheat futures in the September contract settled last Friday in Chicago at 5.30 while currently trading at 5.60 a bushel up about $0.30 for the trading week. But that doesn't tell you the whole story as we traded as high as 5.93 in yesterday's trade on rumors that the country of Ukraine was considering putting limits on their wheat exports, but that ended up being false sending prices right back down. Wheat prices hit a 2-year high as there are major concerns about the wheat crop in northern Europe which has been devastated by drought. Couple that with the fact that we still have concerns in the Great Plains of the United States and as I have talked about in many previous blogs I believe wheat has the highest potential out of any of the other grains. I have had a bullish bias towards the wheat market and if you are long a futures contract continue to place the stop under the 10-day low standing at 5.05. However, the chart structure will improve tremendously in next week's trade; therefore, the monetary risk will tighten up. Wheat prices hit a fresh contract high in yesterday's trade and if you take a look at the oat market that has also broken out to the upside as they can follow one another. If you are long, stay long as I still think there's room to run as we are trading far above the 20 and 100-day moving average as clearly this trend is getting stronger on a weekly basis.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Soybean Futures

Soybean futures in the November contract are currently trading at 9.86 a bushel after settling last Friday in Chicago at 9.85 up about 12 cents for the trading week and traded as high as 9.22 before profit-taking came about sending prices slightly below the $9 level. The city of Chicago received the least amount of rain since World War II as we only witnessed about 1 inch which as way below average. That has helped support soybean prices over the last several weeks as we are now trading above the 20-day moving average but still below the 100-day as the trend is mixed even though we have hit a 6-week high. I am not involved as I am not sure where prices are headed, but I do think the upside is limited as we will await the next crop report which will be released in the next week. That will undoubtedly send some fresh fundamental news back into this market as we are still expected to produce around 4.4 billion bushels which is an outstanding crop. We are in the critical growing season for soybeans & if we don't rain over the next three weeks and get above average temperatures you will see this market rally, but we are expected to receive rain early next week, but time will tell to see if that comes to fruition. If you are a farmer, I would certainly be looking to sell some of your cash crops on any rally as we have rallied about $0.70 from the contract low as fundamentally speaking this market remains bearish.
TREND: MIXED - HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Orange Juice Futures

Orange juice futures in the September contract finished up 500 points to close at 168.90 this week still hovering right near a contract high so keep a close eye on this market for a possible short position. The 170 level has held on a half dozen occasions and is acting as major resistance, and there could be a potential top developing. Juice prices remain in a bullish trend as we are trading above the 20 and 100-day moving average as the trend remains strong and is the most bullish commodity out of the soft commodity sector. I'm looking for a short position if prices close below 162.50 which could happen in next week's trade so keep a close eye on this market. The soft commodities have been pummeled to the downside except for cotton. However, anything grown in the country of Brazil such as coffee and sugar remain bearish as Brazil is the largest producer of orange juice in the world, as well as crop conditions in the state of Florida, have improved, but Brazil still has dry pockets which are still concerning as that is what is supporting prices in the short-term. The chart structure is improving on a daily basis; therefore, the risk/reward would be in your favor if a 5-week low occurs as the volatility remains relatively low as a breakout to the upside or the downside is looming in my opinion.
TREND: MIXED - HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Trading Theory

Should You Answer A Margin Call? Never answer a margin call because you are probably over trading and most likely the position is going against you and probably have lost much more than 2% on that trade.

Never allow this to happen to you because you always want to have sufficient margin in your trading account just in case the exchange raises margin, and that will not force you out of the position.

A great rule is to keep 50% of your total portfolio in cash and the other 50% in trades that way if something crazy happens and it sometimes does this helps in hugely managing risk.