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.

Crude Oil Futures

Crude oil futures in the October contract are currently trading sharply lower this Friday afternoon in New York at 93.10 a barrel after settling last Friday around 96 in an extremely volatile trading week as we had a $3 dollar down move and a $3 dollar up move before selling off once again because of the surging U.S dollar which continues to pressure commodity prices. I am currently sitting on the sidelines after getting stopped out last Friday and if prices break 92.50 I would be recommending another short position while placing your stop loss above the 10 day high of 96 risking around $3.50 per contract or $3,500 risk as the chart structure is very poor currently. Problems with ISIS the terrorist group are not supporting prices as you would think as the world is awash with crude oil supplies as the tug of war continues between the bulls and bears however prices still look very vulnerable to the downside as the trend in the U.S dollar will continue to the upside in my opinion.
TREND: MIXED
CHART STRUCTURE: POOR

Natural Gas Futures

Natural gas futures in the October contract settled last Friday around 4.06 while going out today around 3.78 as I was recommending a long position when prices broke 4.04 as this trade has gone straight down so make sure you place your stop around the 10 day low of 3.76 as this trade fizzled out quickly and that is why you use the proper amount of contracts making sure when you are wrong that you only risk 2% of your account balance on any given trade. If you are stopped out on this trade sit on the sidelines and wait for another trend to develop as this looks like a false breakout to the upside as supplies are just too large continuing its bearish momentum over the last several months.
TREND: MIXED
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the December contract are slightly lower this Friday afternoon trading below their 20 and 100 day moving average settling last Friday at 19.49 currently trading at 19.15 down about $.35 for the trading week and if you took my original recommendation getting short at 20.40 make sure you place your stop loss at the 10 day high which currently stands at 19.95 which is around $.80 away or $4,000 risk per contract at today’s price levels as the chart structure will start to improve next week. The next major support level in silver prices is the contract low which was around 18.75 and it certainly looks to me that level will be tested in the next couple of weeks as volatility is very low at the current time but with the surging U.S dollar and deflation around the world I have a hard time believing that silver prices are going higher in the short term so continue to sell rallies risking 2% of your account balance on any given trade as the trend is your friend in the commodity markets and the trend in the precious metals is lower here in the short term.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Gold Futures

Gold futures in the December contract are trading below their 20 and 100 day moving average hitting a 10 week low settling last Friday at 1,287 going out today with this shortened holiday week at 1,267 and if you took my original recommendation getting short at 1,280 I would continue to place my stop above the 2 week high which currently stands at 1,298 as that stop will be lowered later next week as the trend certainly is to the downside here in the short term. The problem with gold at this time is all the interest is in the stock market which hit another all-time high this week as problems around the world have not been able to push gold up and that’s been very aggravating if you are bullish this sector, however it looks to me that the next level of support is at the contract low of 1,240 will be tested possibly next week as the U.S dollar continues to surge higher as the ECB in yesterday’s trade lowered rates sending the Euro down over 200 points which is very bearish the precious metals and the commodity markets as a whole as it looks to me that the U.S dollar is in the secular bullish trend. The Federal Reserve is ending its tapering program which is also bearish gold prices with the chart structure improving dramatically continue to sell rallies placing the proper stop loss as I do believe lower prices are ahead.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in the December contract are lower this Friday afternoon currently trading at 199 after settling at 201 last Friday as the market may have created a double top this week at 210 as the market still remains choppy as I am sitting on the sidelines as there is currently no trend. Coffee prices are trading above their 20 & 100 day moving average as the chart structure is poor which does not allow a tight stop loss with major support at 185 as traders will keep a close eye on Central Americas crop which has been suffering from some dryness but the critical component to this market is whether Brazil will have a another poor crop which would send prices sharply higher however historically speaking it is rare to have back to back droughts.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in the December contract are down for the 2nd consecutive day currently trading at 64.25 after settling last Friday at 66.15 still stuck in a sideways channel as I’m currently neutral and sitting on the sidelines in this market as prices in my opinion look to retest major support at the contract low of around 62.00 as a strong U.S dollar this week is keeping a lid on many commodity prices. The weather in the southern part of the United States should produce an outstanding crop in 2014 as supplies are right at record highs while prices are now trading below their 20 & 100 day moving average telling you that the short term trend is lower but there has been no official breakout and I don’t like trading choppy markets so keep an eye and look for another market that is currently trading strong in one direction or another. Harvest season is about a month away as we should start to see some estimates of how big the crop is as traders are keeping an eye on the September 11th USDA crop report which should definitely send some high volatility back into this market as over planting has been the biggest culprit to this market putting heavy pressure as prices have dropped 2000 points since early May.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

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

Wheat Futures

Wheat futures are trading below their 20 &100 day moving averages telling you that the trend has turned to the downside and if you sold the breakout in the December contract around 5.46 continue to place your stop loss at the 10 day high around 5.80 a bushel risking around 45 cents or 2,250 dollars risk per contract as prices have broken out of an 8 week consolidation which is always bearish in my opinion just look at the sugar chart. Wheat prices settled last Friday at 5.63 finishing down nearly 40 cents as world supplies are increasing and with a stronger U.S dollars prices should remain under pressure in the short term especially with a ceasefire in Ukraine as prices have dropped over $2.30 cents in the last 4 months as excellent growing conditions keep pressuring prices.
TREND: LOWER
CHART STRUCTURE: OK

Corn Futures

Corn futures rocketed higher on a possible frost hitting the state of Iowa on 9/13 with estimated temperatures going as low as 27 degrees which would damage the crop severely especially since the crop is behind schedule sending the bears scattering today. I have been trading corn for over 20 years and frosts just don’t happen in my opinion as weatherman cannot predict the exact low 8 days from now so take advantage of this nonsense and keep selling as this frost will not happen in my opinion as this crop will be one for the record books. Corn prices were slightly lower for the trading week as the trend continues to the downside and I can’t stress enough that these frost scares are a bunch of crap as farmers would be welcoming a frost by the 21st of September as harvest is right around the bend as Iowa is not the only state to grow corn as the state of Illinois is not forecast to have any weather problems as we are 85 degrees and beautiful this Friday afternoon.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the October contract continue their bearish trend finishing down around 50 points in Thursday’s trade while slightly lower this Friday afternoon trading at 15.07 a pound after settling last Friday at 15.49 as prices are still trading below their 20 and far below their 100 day moving average which stands at 17.38 and as my theory states the further you trade away from the 100 day moving average the stronger the trend as the next major support is at the January contract low of 14.70 and I do believe that could be retested next week. If you took my original recommendation a couple months back and got short this market around 17.45 continue to place your stop loss above the 2 week high which currently stands at 16.05 and that stop loss will be moved lower next week as the trend continues to get stronger on a weekly basis and if 14.70 is broken you’re looking at going back down to the May 2010 low of around 13.75 as volatility has been relatively high in recent weeks.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

When Do You Enter A Trade? What are your rules to initiate a trade on the long or short side of the commodity market?

I have been asked this question many times throughout my career and my opinion is simply to buy on a 20-25 day high breakout in price on a closing basis only or sell on a 20-25 day low breakout to the downside also on a closing basis. Many times the price will break the 25 day high and sell off later in the day only to have your trade be negative very quickly. I would rather buy the commodity at a higher price on the close because that gives me more confidence that the market has truly broken out. However there are more ways to skin a cat and this is not the only answer because some other trading systems might rely on different breakout rules that have also been reliable. Remember always keeping a 1%-2% risk loss on any given trade therefore minimizing risks because the entry system I use always goes with the trend because I have learned over the course of time the trend is truly your friend in the long run. I also look for tight chart structure meaning a tight trading range over a period of time with relatively low volatility. I try to stay away from a crazy market that hit a 25 day high in 2 trading sessions versus the 25 high that actually took 25 days to create.

WHEN DO YOU EXIT A TRADE?

The biggest question that I have been asked is when do I exit a winning trade and when do I exit a losing trade? In my opinion the rule of thumb that I use is placing my stop loss at the 10 day high if I’m short or a 10 day low if I’m long. The other rule of thumb is to place your stop loss at the 2% maximum loss allowed in your account for any given trade.

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

SEERY FUTURES ACCEPTS CANADIAN COMMODITY ACCOUNTS

There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: (800) 615-7649


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