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 April contract settled last Friday in New York at 1,302 while currently trading at 1,310 up about $8 for the trading week. Prices reacted positively off of the Federal Reserve statement that they will not raise interest rates for the rest of 2019 which is a fundamental bullish factor towards gold and the precious metals as a whole. Gold prices held major support a couple of weeks back at the 1,280 level as I still believe we will break the February 20th high of 1,349 in the coming weeks ahead. The Federal Reserve stated that there would be no more interest rates hikes in the near future as that is bullish commodities and stock prices in general as I see no reason to be short gold at these relatively inexpensive prices. Gold futures are trading above their 20 and 100-day moving average as the trend is slightly higher as I will be looking at a bullish position if prices hit a four week high in next weeks trade as the chart structure is improving daily due to the low volatility. The U.S. dollar has sold off of recent highs as lower interest rates in the United States means a weak dollar which is also bullish gold.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Silver Futures

Silver futures in the May contract is currently trading at 15.43 an ounce after settling last Friday in New York at 15.32 up about $0.10 for the trading week hovering right near a three week high. The Federal Reserve announced that they would not raise interest rates for the rest of 2019 and that is certainly bullish silver and the precious metals as U.S dollar has sold off from recent highs as the fundamental picture for this commodity indeed has turned bullish in my opinion. Strong ETF demand continues to support silver prices as well as the retail investor continues to enter this market believing higher prices are ahead. Silver is trading right at their 20-day and slightly above their 100-day moving average as the trend is mixed to higher as that will be possibly looking at a bullish position in next week's trade as I think the downside is minimal especially after that Federal Reserve announcement. The volatility remains relatively low as I don't think that situation is going to continue for much longer as most of the precious metals are down today except for gold as that is hampering silver prices in the short term. In my opinion, I still believe silver will crack the $16 level in the coming weeks ahead as the commodity markets, in general, are starting to work higher as we enter the volatile spring and summer months.
TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

10-Year Note Futures

The 10-year note in the June contract settled last Friday in Chicago at 122/31 while currently trading at 124/02 hitting a 15 month high. I had been recommending a short position several weeks back getting stopped out taking the small loss as the main reason for this huge surge in price is that the Federal Reserve stated they would not raise interest rates for the rest of 2019 coupled with the fact that the German 10-year bund has turned negative. The current yield on the 10-year note is 2.41% and looks to even head lower in my opinion as that was quite a surprise on the interest rate front. Lower U.S interest rates are also a fundamental bullish factor towards stocks and commodities as yields are historically low as large corporations can still borrow large blocks of money and pay it back in an extremely low rate. The next major level of resistance is around the 125 area, and if that is broken, the bond could trade as low as 2.00% which is shocking in my opinion especially with this type of economic growth that we are witnessing. Bond yields across the world remain extremely low, and it looks like it's going to continue for some time as Europe still has very little growth.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Soybean Futures

Soybean futures in the May contract settled last Friday in Chicago at 9.09 a bushel as there is very little fresh fundamental news to dictate short term price action in my opinion. Soybean meal prices hit a six week high as that generally is the leader in this complex as it looks to me that the entire grain market is starting to bottom out as we enter spring planting. Massive floods have entered the states of Nebraska and Iowa, and I think that is supporting corn and wheat prices and in the back of traders minds, they might think that prices might be too cheap just in case some weather situation does develop. Soybean prices are trading right at their 20-day but still under their 100-day moving average as the chart structure is outstanding as we have gone nowhere over the last six months as I think that situation will continue until at least mid-April. Soybean prices are right near a three week high bouncing off of major support last week around the 8.90 level as we certainly would love to see a trade agreement with China develop as then I think there could be a high probability that the lows in the entire grain market would finally be at hand.
TREND: MIXED - HIGHER
CHART STRUCTURE: OUTSTANDING
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 July contract is currently trading at 3.88 a bushel hitting a three week high after settling last Friday in Chicago at 3.82 as it looks to me that the 3.70 level will hold as the short term bottom. Massive flooding has occurred in the states in Nebraska and Iowa, and there are some concerns about delayed planting as corn is planted ahead of soybeans, but it is still very early as there is still time ahead. Corn prices are trading above their 20-day but still below their 100-day moving average as I have been looking at a counter-trend trade over the last several months as now I will be looking at the next price dip to enter. The large money managed funds were short around 260,000 contracts right near an all-time record, and as I stated in previous blogs, I thought there could be a short squeeze, however that has not happened, but it seems to me that their liquidation at this time is causing higher prices. The next major level of resistance is around the 3.95 / 4.00 level as I think in the coming weeks ahead we will trade above that level as there's too much uncertainty at this time and if you are a farmer and don't have to sell, wait for higher prices in my opinion.
TREND: MIXED - HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Live Cattle Futures

Live cattle futures in the June contract are trading lower by 20 points at 123.70 breaking a 7-day winning streak after settling last Friday in Chicago at 121.92 hitting a fresh contract low earlier in the session. In my opinion, I still believe higher prices are ahead as there so much uncertainty about the devastation that has occurred in Nebraska and Iowa as today was blamed solely on profit-taking. Cattle prices are trading far above their 20 and 100-day moving average telling you that the trend is higher as hog prices have exploded over the last week helping support cattle as this natural disaster was Nebraska's worst in recorded history. If you are long a futures contract, I would place the stop loss at the March 13th low of 118.30. However, that chart structure will improve; therefore, the monetary risk will be lowered as I still think prices could touch the 130 level which is only another 6% move higher. The fact that the Federal Reserve also announced yesterday that they would not raise interest rates for the rest of 2019 is a fundamental bullish factor towards all commodity prices.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Lean Hog Futures

Lean hogs in the June contract experienced a wild trading session this Friday afternoon in Chicago trading as high as 97.82 then selling off to 91.02 having a 780 point trading range and expect that volatility to remain for months to come. Hog prices settled last Friday in Chicago at 86.52 while currently trading at 94.52 up about 800 points for the trading week all on massive flooding especially in the state of Nebraska. Hog prices created a spike bottom which I'd written about in many previous blogs on February 20th at 72.20 as that seems like a long time ago, but that was just about four weeks ago as that's how fast prices can run up especially when a weather situation come about such as flood or drought. If you are long a futures contract, my recommendation was to keep the stop loss at the March 18th low of 85.32. However, that has to be raised to the 87.30 level in my opinion as the volatility is crazy and the chart structure is terrible so the rules can change.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Trading Theory

This rule is extremely important, and I witness it being abused constantly creating tremendous loses that are sometimes difficult to come back from.

Never add to a losing position because if the position continues to go against you, you have added even more contracts which are all losing money. Your account will suffer loses much more than 2% and in some case adding positions and never getting out of a losing trade has wiped peoples trading accounts down to zero because of 1 or 2 bad trades.

Remember always play for another day you will have losing trades, and the good traders manage losses and move on to the next possible trade.