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 February contract settled last Friday in New York at 1,252 an ounce while currently trading at 1,240 down about $12 for the trading week lower for the 2nd consecutive session. I have been recommending a bullish position from around the 1,252 level, and if you took that trade, the stop loss has been raised to 1,226 as the chart structure is outstanding due to the low volatility. Gold prices hit a five-month high in last week's trade, but the U.S. Dollar has hit a 1.5 year high today as that is putting pressure on gold and the precious metals across the board as I will not 2nd guess as I will continue to place the proper stop loss and see what next week's trade brings. Money flows have been exiting the U.S equity market rather dramatically over the last several weeks as that has helped push gold prices higher as I also have a bullish silver recommendation which is also under pressure in today's trade. The next major level of resistance around the 1,255 level and if that is broken I think there is the possibility prices could trade up to the 1,300 level in the coming weeks or months ahead as I would have to believe that the volatility will start to expand as we exit 2018.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Platinum Futures

Platinum futures in the January contract is currently trading at 787 an ounce as this is a very interesting situation in my opinion as I am presently recommending a bullish position in gold and it looks like we will be entering a bullish position in silver today as platinum prices are right near a three-month low. If you take a look at the palladium market as it is surging to the upside hitting a 20 year high as I think platinum will start to be used in the Cadillac converters instead of palladium due to the price difference therefor picking up demand for this commodity. I'm not recommending a position, but I do think the downside is very limited and if you have a longer-term view I think prices look interesting at these depressed levels. Platinum is still trading below its 20 on 100-day moving average telling you that the trend is to the downside. We have dropped about $100 over the last month as prices actually hit a four-month high in early November and then sold off rather dramatically, but look to be a buyer as I think this market will catch up to the rest of the precious metals eventually.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: LOW

U.S. Dollar Index Futures

The U.S. dollar in the December contract settled last Friday at 96.47 while currently trading at 97.60 up about 113 points for the trading week hitting a fresh 1 ½ year high. Money continues to flow into the dollar and out of the British Pound as the Brexit debacle continues to put pressure on European currencies as I think that situation is not going to end anytime soon. The dollar is trading above its 20 and 100-day moving average as this is probably the strongest bullish trend out of all sectors at this time, and if you are long a futures contract, I will continue to place the stop loss under the 10-day low standing at 96.32 as an exit strategy. If you have followed any of my previous blogs, you understand that I've been bullish the dollar and I do believe we will crack the 100 level in the coming weeks ahead as I see no reason to be short this currency. I do think the Brexit situation will become even worse in the coming months ahead as weak leadership and bureaucratic governments are not a good situation for a strong currency so stay long.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Coffee Futures

Coffee futures in the March contract is currently trading at 102.60 after settling last Friday in New York at 104.10 down about 150 points for the week continuing its bearish momentum while still experiencing extremely low volatility. In my opinion it looks to me that prices will retest the contract low which was hit on September 18th at 98.55, but I think once 2019 arrive things will change for this commodity as Somar Meteorologia said rainfall in Minas Gerais Brazil's biggest coffee-growing region was 27.7 mm in the past week or only 43% of the historical average. Coffee prices are still below their 20 and 100-day moving average as the trend is clearly to the downside. This is the weakest soft commodity as the volatility should come to life in January and February as that is when a drought could hit essential coffee growing regions of Brazil. They already are experiencing a lack of rain, but it is not being reflected in the price due to the fact of large supplies. The Vietnamese harvest is about 75% complete as that should be wrapped up in the next couple of weeks as that also brings seasonal pressure on prices at this time as they did about 30.4 million bags which was a record so be patient as a bullish trend will develop soon.
TREND: LOWER
CHART STRUCTURE: SOLID
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.

Corn Futures

Corn Futures in the March contract settled last Friday in Chicago at 3.85 a bushel while currently trading at 3.87 up about 2 cents for the week still experiencing extremely low volatility as prices are hovering right near a four-month high. Corn prices are trading above their 20 and 100-day moving average as the trend is higher as my only concern is that there is a price gap that was created between 3.78 / 3.80 as I think that will be filled before a true bullish trend will develop. I have bullish recommendations in wheat and in soybean meal as I do think grain market will move higher as we enter 2019 as I believe all of the fundamental bad news has already been reflected into the price. Weather in South America is ideal as traders will keep a close eye on that situation, but the main concern is the trade confrontation between the United States and China. If we can come up with some type of binding agreement, I think this market would move substantially higher as they have already started to buy U.S soybeans once again. I am certainly not recommending any type of bearish position in corn with the next major level of resistance at the 3.90 level as I think there's possibility corn could trade in the low $4 range soon.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cotton Futures

Cotton futures in the March contract settled last Friday in New York at 80.23 while currently trading at 79.92 down slightly for the trading week still stuck in a three-month consolidation. Cotton prices reacted neutrally off of the crop report which was released earlier in the week. I've been recommending a bullish position over the last couple of months from the 79.60 level and if you're still in the trade continue to place the stop loss under the contract low standing at 76.50. However, if this does not break out to the upside next week I think it will be time to move on as trading in consolidation is difficult as we could use the margin money in a different market. Cotton prices are trading slightly above their 20-day but still below their 100-day moving average as the trend is mixed with the next major level of resistance at the breakout of 82.00 in my opinion so let's see what next week's trade brings as volatility is average. Currently, this is my only soft commodity recommendation as this sector remains mostly bearish, but I do believe come 2019 the bullish trends will start to arrive once again.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE

Sugar Futures

Sugar futures the March contract is currently trading at 12.70 after settling last Friday in New York at 12.87 a pound still stuck in a four-week consolidation experiencing very low volatility like many other commodities. Sugar prices are trading right at their 20-day but still above their 100-day moving average with major support around the 12.30 level & if that is broken you would have to think that lower prices would be ahead. At the current time, I do not have a recommendation in this commodity as my only soft commodity trade is a bullish cotton position which has basically gone sideways over the last month as there is very little fresh fundamental news to dictate short-term price action. I think come 2019 there will be significant trends to the upside as I still believe historically speaking sugar is cheap as I think the downside is limited, but I'm advising clients to avoid this market and look at other sectors with better potential. Fundamentally speaking we have large worldwide supplies as that has kept a lid on prices over the last six months coupled with the fact that crude oil has sold off rather dramatically as sugar is used as biodiesel as well.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Wheat Futures

Wheat futures in the March contract is currently trading at 5.32 a bushel as I've been recommending a bullish position from the 5.32 level and if you took the trade continue to place to stop loss under the contract low at 5.03 as the proper exit strategy. I am bullish the entire grain market as I also have a bullish soymeal recommendation as I think wheat prices are cheap and have finally bottomed out. I think that the volatility will start to explode to the upside as we enter the very volatile months of January and February with the next major level of resistance at the 100-day moving average around 5.41 and if that is broken, there's a lot of room to run to the upside in my opinion. Wheat prices have now hit a nine-week high on concerns about the Australian crop suffering production losses due to drought pushing prices higher. However, I believe prices are historically speaking cheap so continue to play this to the upside in my opinion as I still think the risk/reward are in your favor.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

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.