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.

Silver Futures

Silver futures in the September contract are settling around 20.40 an ounce finishing down about $.25 for the trading week while still trading below their 20 but above their 100 day moving average hitting a 5 week low and if you are currently bearish silver I would sell at today’s price while placing my stop above the 10 day high which is 21.12 risking around $.50 or $2,500 per contract as the chart structure is outstanding currently. Many of the commodity markets are going lower because of the U.S dollar hitting a 6 month high against the Euro currency as I think that trend is going to continue here in the short term. The volatility in silver is extremely low at the current time and I would assume with all the worldwide problems that volatility will start to increase however prices still look weak in my opinion as the Federal Reserve is cutting back on the quantitative easing which is also a negative influence on precious metals prices as the fundamentals currently are neutral to weak.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Gold Futures

Gold futures in the December contract finished up $12 this Friday afternoon at 1,295 an ounce still trading below their 20 and 100 day moving averages hitting a 5 week low in yesterday’s trade while settling last Friday at 1,305 finishing down the week by around $10 as I am currently neutral the gold market as the trend has been choppy in recent weeks. Gold topped out 3 weeks ago around the 1,345 level but now has been in a slow decline as deflation and a rising U.S dollar is pressuring many of the commodities including gold despite the fact of all the worldwide problems that we are currently dealing with especially with Russia but it has not been enough to rally the gold market. If you’re bearish gold my recommendation would be to sell at today’s price while placing my stop loss above the 10 day high which currently stands at 1,225 risking around $30 or $3,000 per contract as the chart structure is relatively solid at the current time.
TREND: LOWER
CHART STRUCTURE: SOLID

Cocoa Futures

Crude oil futures in the September contract finished down $4.50 for the trading week settling around 97.50 a barrel hitting a new 11 week low and I was recommending to sell a futures contract when prices broke 98.70 while placing your stop loss above the 10 day high which currently stands at 103.50 risking around $4.80 or $4,800 per contract as sanctions placed on Russia are pressuring crude oil prices and many of the other commodities in recent days. The chart structure in crude oil will start to improve in the next couple of days as the next major support is at 96.50 as the commodity markets in general have turned bearish as crude oil prices have dropped for the 5th consecutive trading session as prices are now trading below their 20 & 100 day moving average telling you that the trend has turned to the downside.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Soybean Futures

Soybean futures in the November contract finished lower for the 4th consecutive trading session finishing down by 24 cents in a volatile week with prices trading as high as 11.16 in Tuesdays trade as this Friday afternoon prices settled at 10.58 closing near session lows .Traders are getting concerned about a lack of rain in certain parts of the Midwest as prices have stabilized in recent days after falling out of bed due to a possible record crop in 2014. If soybeans receive adequate rain in the Midwest that would be bearish soybeans going into harvest, however if dry temperatures come into play with no rain you could see the weather scare that we’ve not had as prices hit new lows in Wednesday’s trade at 10.55 and rallied over $.50 at one point settling right in the middle of the trading range for the week. Prices are still trading below their 20 and 100 day moving average and I’ve been recommending a short position in soybeans for quite some time and if you took that recommendation place your stop at the 10 day high which currently stands at 11.18 risking around $.60 or $3,000 per contract as the trend still remains bearish in my opinion.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Cotton Futures

Cotton futures in the December contract finished down over 200 points for the trading week currently at 63.27 but finished up 40 points this Friday afternoon in New York after settling last Friday at 65.35 hitting a new 5 year low with low demand from China and large supplies coming onto the market pressuring prices here in the short term. If you have been following any of my previous blogs I was recommending a short position when prices broke down below 76.00 and if you took that recommendation I would place my stop loss above the 10 day high which currently stands at 68.54 around 500 points away or $2,500 risk per contract. The trend is your friend in the commodity markets and all of the agricultural markets have fallen out of bed as over planting is pressuring corn, soybeans, wheat, and cotton prices and should continue to put a lid on prices throughout 2014 in my opinion so continue to place your stop at the 2 week high as your exit strategy. Prices have dropped about 2200 points since early May and almost has the identical chart as corn as the bear market started in late May pushing prices down to today’s depressed levels and I still think prices could head even lower possibly retesting the 60 level.
TREND: LOWER
CHART STRUCTURE: SOLID

If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Lean Hog Futures

Lean hog futures in the August contract rallied this Friday afternoon in Chicago closing up 20 points at 118.05 after hitting a 14 week low in yesterday’s trade finishing down 550 points for the trading week as I was recommending selling hogs when prices broke 126 a pound while placing your stop above the 10 day high which currently stands at 128 risking around 1000 points or $4,000 from today’s price levels as the hog contract is very large with high risk and high volatility. Hog prices are trading below their 20 and 100 day moving average telling you that the trend is lower as I am a trend follower so continue to play this to the downside as the chart structure will improve in the next couple of days and that stop will lowered. I think the possibility of the spike low created around 112 will be retested in the coming weeks as many of the commodity markets have turned bearish as the U.S dollar is strengthening against the Euro currency.
TREND: LOWER
CHART STRUCTURE: OK

Corn Futures

Corn futures in the December contract finished down $.10 for the trading week in Chicago hitting a new contract low at 3.61 also hitting a fresh 4 year low as excellent growing conditions in the Midwest continue to pressure prices and if you took my recommendation back in early May at 4.87 I would continue to place my stop above the 10 day high which currently stands at 3.78 which is around $.16 or $800 risk from today’s price levels as the trend is extremely strong to the downside. As I’ve talked about in many previous blogs I think prices are going to break 3.50 the next couple of weeks and there is a chance come harvest time that prices will trade under $3 a bushel due to the fact that we just have to big of a crop coming in October as carryover levels are expanding rapidly as I believe prices are still headed lower, however if you have not been short this market I would sit on the sidelines and wait for a better chart pattern to develop because you have missed the boat.

The crop here in Illinois is the greatest crop I’ve ever seen in my entire life as the 7 to 10 day forecast has mild temperatures with adequate rain as this has been one of the greatest growing seasons I can remember without any weather scare up to this point. Corn futures are trading far below their 20 and 100 day moving average as prices have completely collapsed from early May as I talk to many farmers throughout the country and many of them still have not sold or hedged any of their crop which tells me that prices could still drop dramatically even from today’s depressed price levels. Corn futures have dropped around $.85 in the last 3 weeks after the USDA crop report showed bearish crop production and carry over levels so continue to play this to the downside my opinion.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Sugar Futures

Sugar futures in the October contract traded lower for the 5th straight trading session and finished down 80 points for the week in New York to settle around 16.35 a pound and I’ve been recommending a short position in sugar for quite some time and if you took that recommendation I would place my stop above the 2 week high which currently stands at 17.33 risking around 100 points or $1,100 per contract as that stop will be lowered on a daily basis next week. I was recommending a short position when prices broke out of a 4 month consolidation at 17.45 as this trade has worked out well as I still believe that 15.80 is in jeopardy to the downside and a possible retest of the contract low at 15.10 is coming in my opinion as corn prices continue to hit new lows and I think that will start to pressure sugar prices as they are both used as bio diesels as deflation is in the year not inflation currently.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

What Does Risk Management Mean To You?

I generally tell people that the reason people lose money in commodities is not due to the fact that they are bad at predicting where prices are headed, however they are bad when it comes to losing trades and refusing to take a loss which results for heavy monetary losses that are difficult to come back from. For example if a customer has $100,000 account in my opinion on any given trade he or she should risk 2% – 3% of the account value meaning if you are wrong the worst-case scenario is still a $97,000 remaining balance, however what I always see is traders risking ridiculous amounts of money and instead of the 3% stop loss will risk 20% to 30% on any given trade or even higher therefore if you are wrong on two or three trades that $100,000 dollar account could dwindle down to nothing very quickly and I’ve seen it many times throughout my career.

What many traders forget to realize is they might have 4 or 5 commodity positions on and if you have too many contracts on all at the same time and all of those trades go against you which is very possible the losses can add up to be staggering so what I am suggesting to you is if you have $100,000 account risk between $2,000 – $3,000 per trade so if you lose on five straight trades the worst-case scenario is that your down $15,000 and still have an $85,000 balance which is very possible to still come back from and your still in the game.