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 is currently trading lower by $10 at 1,282 an ounce as prices have been stuck between 1,290 / 1,300 over the last two weeks due to extremely low volatility. I have been recommending a bullish position from around the 1,252 level and if you are involved in that trade continue to place the stop loss under the 10-day low standing at 1,278 as the chart structure is excellent, but for the bullish momentum to continue prices have to break the January 4th high of 1,300. I'm also recommending bullish positions in silver and platinum as palladium has exploded to the upside once again today hitting another all-time high and that indeed is the leader out of this complex. I'm hoping that will start to bleed into the other precious metals. Gold prices are still trading above their 20 and 100-day moving average as the trend is higher, and I still think a breakout above 1,300 is looming so continue to play this to the upside. I will be possibly looking to add more contracts if that situation occurs as the risk/reward would still be in your favor
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Platinum Futures

Platinum futures in the April contract is trading lower by $11 an ounce at 801 bouncing off major support. Palladium prices hit another all-time high this week higher for the 12 consecutive sessions, and I think that will start to push platinum prices higher as the spread between the two is at an all-time high. I have been recommending a bullish position from around the 816 level, and if you took that trade I'm going to continue to keep the stop loss at 787 as an exit strategy, but for the bullish momentum to continue we have to break the January 7th high of 836, I remain bullish. Platinum prices are trading above their 20-day but still below their 100-day moving average as the short term trend is mixed at this time. The chart structure is excellent due to the low volatility coupled with the fact that the risk/reward is still in your favor and if you did not take the original recommendation I am still bullish at this price level as the risk is around $1,400 plus slippage and commission.
TREND: HIGHER - MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Natural Gas Futures

Natural gas futures in the March contract settled last Friday in New York at 2.94 while currently trading at 3.05 ending the week on a sour note trading down 12 points. I'm sitting on the sidelines as this market remains very choppy with high volatility and there is a price gap between 3.00 / 3 .07. I would be surprised if that is not filled in the coming days ahead. Traders are keeping a close eye on the weather as we are expected to have snow storms and frigid temperatures over the next seven days. Stockpiles are still right near a 16-year low as the fundamental picture for this commodity remains strong, and the price is historically low. Natural gas prices are trading under their 20 and 100-day moving average as the trend is lower. However, I will not take a bearish position as I think the downside is very limited. Volatility will continue to remain extremely high for the rest of the winter months as the chart structure is starting to improve with major support around the 2.85 level, so keep a close eye on this market as we could be involved in a bullish position soon.
TREND: LOWER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Coffee Futures

Coffee futures in the March contract is currently trading at 105.75 ending the week on a positive note up 350 points after settling at 103.85 last Friday. For the bullish momentum to continue prices have to break the January 9th high of 106.85 in my opinion. I have been recommending a bullish position from around the 105.30 level and if you took that trade continue to place the stop loss near the 14-year low at 98.50. Prices are now trading above their 20-day moving average but below their 100-day which stands at 109.40 as carryover levels were reduced in Brazil and that is what is causing the rally in today's trading session. The volatility remains remarkably low, and I don't think that situation is going to continue for much longer. There is some dryness in key growing regions in Brazil, and if that continues volatility will certainly spike to the upside. Continue to stay long as I think a bottom has been formed. If the 106.85 level is broken, I think prices could test the 115 area rather quickly as we continually bounce off of the 100 level on multiple occasions and then rally as I think that is a very good technical sign.
TREND: HIGHER - MIXED
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.

Corn Futures

Corn futures in the March contract is trading higher for the 3rd consecutive session at 3.81 a bushel after settling last Friday in Chicago at 3.78 up about 3 cents experiencing above-average volatility. As I have talked about in previous blogs, I'm looking at buying corn on some type of sell-off, and I think the downside is very limited as we sold off hard on Tuesday, but have rallied since then. I'm still sitting on the sidelines waiting for another opportunity to the upside. Rumors are circulating that some agreement with China could be happening soon and that is what has caused the rally in the last couple of days. However, there is no confirmation of that situation at this time. Corn prices are still trading above their 20 and 100-day moving average as the trend is higher. However, this market continues to flip flop on a weekly basis as we are still stuck in a four-month consolidation. Open interest dropped about 6,700 contracts yesterday which that tells you this rally has been based on short covering as corn is now starting to follow oil which continues to go higher on a daily basis as corn is used as an ethanol product so look to be a buyer on any weakness around the 3.70 level. I'm advising my farmer clients not to be selling any of their crops as I still think come springtime prices will be higher as there could be a weather premium that should support prices.
TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Soybean Meal Futures

Soybean meal futures in the March contract settled last Friday in New York at 314.60 while currently trading at 315 unchanged for the trading week experiencing higher than average volatility which is a good thing to see. I have been recommending a bullish position from around the 3.17 level over the last month or so and if you took that trade continue to place the stop loss at 308. We were just an eyelash away from being stopped out earlier in the week, but then rumors about a possible agreement with China circulated in yesterday's trade pushing prices higher. However, that has been denounced as at this time that is just a rumor and not fact. Soybean meal prices are trading above their 20 and 100-day moving average as the trend is higher, but its really mixed so stay long and continue to place the proper stop loss as there is major support for this commodity around the 3.05 /3.08 level as it continues to bounce off of that on multiple occasions as I think a bottoming pattern is forming.
TREND: HIGHER - MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

Soybean Oil Futures

Soybean oil futures in the March contract are trading higher for the 2nd consecutive trading session up another 21 points at 28.98 right near a four week high. I'm not involved in this commodity, but I've written about it on multiple occasions as I do think prices have bottomed out and if you look at the daily chart there is a head-and-shoulders bottom chart pattern as technically speaking that means higher prices would be ahead. The chart structure is starting to improve on a daily basis as the volatility remains relatively low as rumors about China and the United States nearing some type of agreement would be bullish soybean oil as China is the largest importer of U.S. beans in the world. Soybean oil is now trading above its 20 and 100-day moving average and I will be looking at a possible bullish position in next week's trade so keep a close eye on this market as historically speaking soybean oil is cheap as we have been in a bearish trend ever since 2012. We will start to enter spring planting in the next three months, and the volatility should certainly expand to the upside as we will plant approximately 8 million fewer soybean acres than in 2018 which could spur a bullish trend.
TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 12.78 a pound while currently trading at 12.88 after hitting a three month high earlier in the trading week. I'm presently not recommending a position in this commodity, but I do have a bullish bias, I just want to see the chart structure improve as the stop loss would be near the three month low of 11.69. I think it's too much risk at this time for this type of volatility like I have talked about in previous blogs. If prices come back down to the 12.50 level I would be recommending a bullish position as the risk would be around $900 per contract plus slippage and commission as the risk/reward would be better in your favor. Sugar prices are currently following crude oil which continues to move higher on a daily basis as the U.S. stock market also rallies on a daily basis as stabilization has come back into these sectors. Sugar is used as an ethanol product and if crude oil prices go higher that also supports sugar prices. Prices are trading above their 20 and 100-day moving average telling you the trend is higher, but be patient as I still think we could test the 12.50 level in the coming days ahead.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Wheat Futures

Wheat futures in the March contract is currently trading higher by 1 cent at 5.19 a bushel as there's very little interest in this commodity at the current time as the export sales data will not be released once again due to the government shutdown. With very little fundamental news being released it is difficult to move prices in either direction as the volatility has come to an absolute crawl. Traders are keeping an eye on the weather in the Great Plains part of the United States as colder temperatures are supposed to arrive, but there are no problems at this time. Wheat prices are trading under their 20 and 100-day moving average as the trend is lower as I'm currently recommending to sit on the sidelines as I don't think there's any money to be made now. Once this market starts to receive government data volatility will also pick up, but I think this government shutdown is going to last a long time so look at other markets with higher volatility and better potential.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
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.