Weekly Futures Recap With Mike Seery

10-Year Note Futures

The 10-year note futures in the March contract settled last Friday in Chicago at 129/12 while currently trading at 129/03, experiencing a wild trading week with large price swings daily. In Wednesday's trade, prices traded as high as 130/06 before selling off rather dramatically as tensions with the country of Iran simmered down.

However, I will be recommending a bullish position if prices close above 129 /14 while then placing the stop loss at 127 / 29 as the risk is around $1,500 per contract plus slippage and commission. In my opinion, I do not think the Federal Reserve will not raise interest rates in 2020. That is a fundamental bullish factor towards higher prices ahead, coupled with the fact that the risk/reward is in your favor as volatility certainly has come to life. I don't think the problem with Iran is over with yet as there will be more skirmishes down the road.

If you take a look at the daily chart, the 10-year note has bounced off the 128/00 level on a half a dozen occasions as the yield is 1.82%. I think we can head back down to around the 1.50% level as you have to remember many countries around the world still have negative interest rates, so look to be a buyer.

TREND: MIXED - HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

Silver Futures

Silver futures in the March contract settled last Friday in New York at 18.15 an ounce while currently trading at 18.15 unchanged for the trading week, however, that doesn't tell you the whole story as in Wednesdays trade prices went as high as 18.89 before selling off on tensions with the country of Iran which have seemed to settle down.

I have been recommending a bullish position from around the 17.45 level and if you took that trade continue to place the stop loss under the 10-day low with now stands at 17.81 as an exit strategy as the chart structure is outstanding. Currently, I also have a bullish platinum recommendation as I took profits on the gold trade last Sunday. Still, I do believe the entire precious metal sector is headed higher as the tensions with Iran could resurface in a New York minute as that would send prices even higher, so stay long as the risk/reward remains in your favor.

Silver is trading above its 20 and 100-day moving average as that tells you the trend is to the upside as trading with the path of least resistance over time is the most successful way to go, in my opinion, as I see no reason to be short.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

S&P 500 Futures

The S&P 500 in the March contract is trading higher for the 3rd consecutive session up another 5 points at 3280 after settling last Friday in Chicago at 3235 up another 45 points hitting another all-time high as this gravy train continues to the upside.

I'm not involved, but I'm certainly not recommending any bearish position. I think 2020 will produce excellent percentage-wise returns for the stock market once again as the U.S. economy added another 146,000 jobs and is the envy of the world. If you are long a futures contract, continue to place the stop loss under the 10-day low as an exit strategy.

Tensions with the country of Iran this week sent the market sharply lower at one point only then to rally significantly. The technology sector is absolutely on fire as this market and palladium are the strongest trends to the upside. I still think there is significant room to run as I will look for some price pullback to enter into a bullish position, therefore, lowering the monetary risk.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Platinum Futures

Platinum futures in the April contract settled last Friday in New York at 990 an ounce while currently trading at 982, ending the week on a positive note up $11 as I remain bullish despite the small losses that we witnessed in this week's trade.

I have been recommending a bullish position from around the 973 level, and if you took that trade, continue to place the stop loss under the 10-day low standing at 948 as an exit strategy as the chart structures is outstanding. Platinum prices are still trading above their 20 and 100-day moving average as this trend remains to the upside as the entire precious metal sector remains bullish. If any escalation between Iran and the United States occurs, you could see sharply higher prices, in my opinion.

For the bullish momentum to continue, prices have to break the January 3rd high of 1,001 as that could happen in next week's trade as the risk/reward remains in your favor to the upside, so stay long.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

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 currently trading at 3.85 a bushel after settling last Friday in Chicago at 3.86 down slightly for the week as the volatility in this commodity has come to a crawl.

Corn prices earlier in the trading session hit a 4 week low before rallying. I have been recommending a bullish position from around the 3.87 level, and if you took that trade, continue to keep the stop-loss under the December 11th low of 3.71 as an exit strategy. I still think the grain market will head higher in 2020. For the bullish momentum to continue prices, have to break the January 2nd high of 3.92. Then I might be looking at adding more contracts to the upside as the trade agreement with China will be signed next week. That is a fundamental bullish factor towards higher prices coupled with the fact that the USMCA trade agreement will also be signed in the coming weeks ahead as I think the long-term bottom in corn has occurred.

Corn prices are trading right at their 20 and 100-day moving average as the trend is mixed to higher. However, I still believe that the risk/reward is in your favor as I think many commodity sectors in 2020 will experience bullish trends, so stay long even though this trade is putting us to sleep.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cotton Futures

Cotton futures in the March contract settled last Friday in New York at 69.20 while currently trading at 71.00 up about 180 points for the week continuing it's bullish momentum as prices have hit an 8 month high. The crop report which was released this afternoon was pretty much neutral as producers in the Cotton Grower Acreage Survey indicated Texas could see an 11.45% decrease yr/yr to 6.346m acres. In contrast, Tennessee and Kansas are projected to see a slight increase in planted acres.

Cotton prices are trading above their 20 and 100-day moving average as this trend is strong to the upside. I have been recommending a bullish position from the 66.60 level, and if you took that trade place the stop loss under the 10-day low which now stands at 68.50 as the chart structure will not improve for another 5 trading sessions so you will have to accept the monetary risk at this time.

If you have been following any of my previous blogs you understand that I think the 75 level is realistic as we will start to focus on the 2020 crop here in the United States as the trade agreement with China will be signed next week as that is a very bullish fundamental factor for higher prices so stay long.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Orange Juice Futures

Orange juice futures in the March contract is trading lower for the 2nd consecutive session down another 160 points at 97.35, hitting a 10-year low, which is fantastic, in my opinion.

I had been recommending a bullish position from around the 103.30 level while getting stopped out in today's trade around the 97.40 level as it is time to move on & look at other markets that are beginning to trend as this market looks to head even lower in my opinion.

Juice prices are trading below their 20 and 100-day moving average as this trend is relentless to the downside because there is no possibility of frost in the coming weeks ahead, Florida. Coupled with the fact of ideal weather conditions in the country of Brazil, which continues to increase supplies as fundamentally and technically speaking, this commodity remains on the defensive.

At the current time, my only soft commodity recommendation is in cotton, which continues to hit multi-month highs. These two commodities can go in opposite directions, and that's precisely what you're witnessing, so move on as you never want to be a buyer on a multi-year low.

TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: LOW

Trading Theory

Trade with the short term trend, as the saying goes in futures trading, the trend is your friend. Still, sometimes you will be a market that is trending higher and then has a false breakout to the upside and then suddenly sells off causing you a 2% loss on your equity and you say to yourself that was a bad trade and should I do something different on my next trade.

If it were up to me, I would continue to buy strength and sell weakness because, in the long run, commodity trading is about percentages of success. If you go with the path of least resistance more often than not, you will have the probabilities of success on your side.

I define a trend as a commodity hitting a 20-day high or low as a trendy market if the market is in a consolidation stay away from it and find something that is trending.up or down and go in that direction remembering the money management rules of 2% maximum loss if you are wrong.