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 November contract had a wild trading week in New York currently trading at $83 a barrel after settling last Friday at 85.82 as prices actually breached the $80 mark before reversing in yesterday’s trade to settle down nearly $3 for the trading week. Crude oil futures are trading below their 20 day and $13 below their 100 day moving average telling you the trend is clearly bearish and if you are short this market place your stop above the 10 day high which currently stands at 90.75 and that stop will be lowered on a daily basis as I missed this market and am currently sitting on the sidelines as the chart structure was awful when the breakout occurred so I’m kicking myself at the current time. I definitely am not recommending any type of long position in crude oil as I think prices will continue to head lower especially with Saudi Arabia coming out stating that they will not cut production as they are looking for lower prices to squeeze U.S output as this market still has further to go in my opinion and 79.78 in yesterday’s trade will be retested once again so continue to take advantage of any rally making sure you place the proper stop loss also maintaining a proper risk management of 2% of your account balance on any given trade. Crude oil prices have dropped from $104 a barrel in late June to today’s price levels dropping over $20 or 20% as consumers will definitely benefit when they hit their local gas stations and that should also help improve the U.S economy. The fundamentals in crude oil are extremely bearish as worldwide supplies are extremely high while supplies here in the United States are at record highs so it’s very difficult to rally as we don’t have the spike up in price like we used to when Middle East conflicts erupted which is a good thing for the United States.
TREND: LOWER
CHART STRUCTURE: POOR

Gold Futures

Gold futures in the December contract had a volatile trading week in New York still trading above its 20 day but below its 100 day moving average telling you that the trend currently is mixed as prices hit a 4 week high in Wednesday’s trade at 1,250 however we are down about $3 this Friday afternoon currently trading at 1,239 as the trend still remains neutral as I’m sitting on the sidelines. A possible spike bottom was created around the 1,185 level as I was short this market from around 1,278 getting stopped out at the 2 week high around 1,235 so right now I’m waiting for a better chart pattern to develop as the chart structure is somewhat poor at the current time as the U.S dollar has been pressuring gold in recent weeks but the dollar looks like its created a short-term top as well. The problem I have with gold at the current time is with all worldwide problems and the stock market experiencing huge volatility this week gold prices should be sharply higher from today’s prices levels so this tells me that this market remains weak and if you think a top has been created at 1,250 sell at today’s price of 1,239 risking $11 or $1,100 per contract, however like I’ve stated before I am sitting on the sidelines waiting for a trend to develop. At the current time many of the commodity markets are experiencing very few trends and as a commodity trader you do not want to trade just too trade so you must have patience as at the current time there have not been any new breakouts in several weeks except for a select few.
TREND: MIXED
CHART STRUCTURE: POOR

Corn Futures

Corn futures in the December contract rallied $.11 this week in Chicago after settling last Friday at 3.34 closing out today around 3.48 a bushel hitting a 6 week high as prices are now trading above their 20 day but still below their 100 day moving average telling you that the trend is mixed as I remain neutral in corn at the current time. Harvest has been very slow especially here in the state of Illinois as we’ve rained for consecutive days sending prices too recent highs however I do believe that when the sunshine comes back and harvest starts to begin once again pressure will come back into the corn market as I still think that we retest 3.18 which was the contract low. Corn futures rallied about 10% off of their contract lows with stiff resistance between 3.60 – 3.70 if you’re looking to get short this market I would sell at today’s price level placing my stop above the recent high of 3.58 risking around $.10 or $500 per contract as I think this rally is long in the tooth. The corn harvest is still expected to bring in about 14.5 billion bushels with a carryover level exceeding 2 billion bushels as the fundamentals remain very bearish for the rest of 2014 in my opinion as estimates of next year’s acreage by a private forecaster pegged planting around 88 million which is 2 million less than what was planted this year but that also could possibly produce another 14 billion+ crop in 2015.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Cotton Futures

Cotton futures in the December contract are trading above their 20 but below their 100 day moving average settling last Friday at 64.10 currently trading this Friday afternoon in New York at 63.00 as currently there is no trend in this market, however it’s starting to develop excellent chart structure as I remain neutral as I’m currently sitting on the sidelines waiting for a breakout to occur. The fundamentals in cotton right now are very poor with a strong U.S dollar and large worldwide supplies with a solid crop being developed in the southern part of the United States as deflation worldwide is pressuring many commodity prices as cotton is still digesting the 2000 point drop in the last 4 months as prices have been going sideways for the last couple of months with major support around 62.00. Harvest will soon take place in the next several weeks as more supply could come onto the market keeping a lid on prices here in the short term as investors are still nervous about China releasing some of its massive reserves on the market as there is very little bullish fundamental news to push cotton prices higher at the current time so look for a better market with a strong trend while keeping an eye on this market as the chart structure is excellent which will allow you to place a tight stop loss when the break out does occur.
TREND: NEUTRAL
CHART STRUCTURE: EXCELLENT

U.S Dollar Index Futures

The U.S dollar experienced an extremely volatile trading week settling last Friday at 86.00 currently trading at 85.28 up about 20 points this Friday afternoon as volatility has exploded in bonds, stocks and many of the commodities as prices hit a 2 week low this week stopping out my recommendation around 85.30 as currently I’m sitting on the sidelines. If you took my original recommendation when prices broke out above the contract high of 81.20 back on the 25th of July this trade worked out very well but now look for other markets that are trending as this market will probably consolidate as it rallied about 600 points in the last 4 months, however I do believe we are in the midst of a long-term bull market as Europe and Japan continue their quantitative easing as the United States has basically ended there quantitative easing so fundamentally speaking that should keep the foreign currencies weak against the U.S dollar. The chart structure currently is poor as this market generally is one of the least volatile of all the commodities, however with the stock market swings this week that sent volatility back into the dollar while sending shockwaves through the currency markets as well so sit on the sidelines and look for another market with better chart structure.
TREND: MIXED
CHART STRUCTURE: POOR

Soybeans Futures

Soybean futures in the November contract had a wild trading week as volatility has certainly expanded as prices are near a 4 week high rallying $.75 from the contract low finishing up around $.30 for the trading week settling around 9.51 a bushel as harvest delays have pushed up prices in recent days. A private forecaster came out today stating that there’s a possibility of 88 million acres being planted next year producing 4.5 billion bushels and if that actually occurs look for soybean prices to continue their downtrend as that would be a massive crop as we are only expecting 3.91 billion bushels this year which is an all-time record as I still believe prices are headed lower and will retest the contract low of 9.04 in the November contract, however we will be rolling over into the January contract next week so if you have any questions please give me a call. I have been bearish the soybean market for a long time as we got stopped out at the 10 day high at 9.31 a couple weeks back, however I remain bearish and if you’re looking to get into this market sell at today’s price while placing your stop above the most recent high of 9.78 risking around $.27 or $1,400 per contract as excellent weather is forecast for the next 10 days and that should speed up harvest and start to put some supply pressure on prices here in the short term.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

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 February contract are trading below their 20 and 100 day moving averages I was recommending a short position last week while placing your stop loss above 94.00 as prices hit 7 week lows currently trading at 86.95 down about 340 points for the trading week. The next level of support is at 83 as I believe there will be more supply coming onto the market in the next year as producers are producing as much as they can as profit margins are very high due to the fact that feed costs have plummeted in recent months therefore supplies should increase tremendously come February so continue to play this to the downside and take advantage of any rallies placing your stop above the 2 week high, however that stop will start to come down later next week as prices look to head lower and break 83 in the next week or so in my opinion. Cattle futures are finally looking like a possible top has been created as cattle prices have propped up hog prices in recent months but if cattle continues to move lower here in the short term that could put even more pressure on hog prices as I think the supply situation will increase as the deadly virus which occurred earlier in the year is not as much of a problem in 2015.
TREND: LOWER
CHART STRUCTURE: POOR

Cocoa Futures

Cocoa futures have had big volatility in recent weeks due to the heightened concerns of Ebola spreading in West Africa where cocoa is grown with a possible shortage being created going into the demand season of Halloween and Christmas as harvest is about to start as this could be a large crop however it’s all about concerns of Ebola and if they will be able to harvest without any problems. Cocoa futures are trading below their 20 & 100 day moving average with extreme choppiness in recent weeks as I’m also sitting on the sidelines in this market as prices settled at 3157 last Friday currently at 3118 with big price swings up and down as I like markets with better chart structure allowing you to place tight stops minimizing your risk as this market has terrible chart structure with big up days & big down days so continue to look at other markets as this market is too crazy due to the Ebola virus.
TREND: NEUTRAL
CHART STRUCTURE: AWFUL

Coffee Futures

Coffee futures in the December contract are trading above their 20 & 100 day moving average however prices hit a 2 week low today as prices have become extremely volatile to the fact of hot & dry weather once again in Brazil causing concerns of another poor crop as prices settled last Friday at 220.40 currently trading at 210.70 down this Friday afternoon on a forecast of rain hitting key coffee growing regions next week. At the current time I’m sitting on the sidelines in this market as prices have become extremely volatile as I will wait for better chart structure to develop however I do think prices are limited to the downside due to the fact that Brazil probably will produce another poor crop this year as coffee is grown on trees and when a drought occurs those trees can be stressed for several years unlike the grain market where you can grow a brand-new crop the next year. I’ve talked to a large coffee producer down in Brazil and he still is extremely bullish stating that he thinks the crop production numbers will be lower than what is currently estimated but only time will tell but the trend is neutral to higher at the current time but look for a better market with better chart structure.
TREND: NEUTRAL
CHART STRUCTURE: POOR

Orange Juice Futures

Orange juice futures in the January contract are trading below their 20 and 100 day moving average as I’ve been recommending a short position when prices broke out below 140 while placing my stop loss at the 10 day high at 146 risking around 600 points or $900 per contract as prices are currently trading at 137.40 with outstanding chart structure as prices have hit a 1 year low. The problem with orange juice at the current time is that we have a large potential crop developing this year and weak demand continues to push prices lower as orange juice is considered a luxury product as I do think lower prices are ahead as the risk/reward is highly in your favor at the current time so play this to the downside and take advantage of any rally making sure that you place the proper stop loss risking 2% of your account balance on any given trade as the trend remains bearish in my opinion.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the March contract are barely trading above their 20 day but still below their 100 day moving average telling you that the trend is neutral settling last Friday at 16.55 currently trading at 16.62 as volatility has slowed down as were basically unchanged for the trading week as I’m still sitting on the sidelines in this market as there is no trend as prices have been trading between 15.50 – 17.20 in the last month. Brazil is looking for much-needed rain and that has propped up prices from the contract low which was hit last month but a breakout needs to occur above 17.20 to get bullish in this market or the breakout has to occur under 15.50 to get bearish this market as there are better trends in other markets so keep an eye on this market but I remain neutral. The sugar market has had excellent trends in recent years and offers high liquidity as this is one of my favorite markets to trade.
TREND: NEUTRAL
CHART STRUCTURE: IMPROVING

Where Should You Place Your Stops?

Identifying where stops exist in the market is an important lesson to learn because placing a correct stop loss that will improve your trading tremendously over the course of time. Nobody knows for sure where stops are located, however I have learned a couple of things over my 20 year career and I have a general idea where stops are placed and why. Buy stops are generally placed above the 10 day high as well as above contract highs as the bulls generally are buying more and the short selling are getting stopped out. Sell stops are usually placed at the 10 day low as well as below contract lows which means the shorts are adding to their position and the longs are getting stopped out as they figure they are wrong.

The other common places to have stops are at certain moving averages such as the 20 or 100 day moving average where traders think either the trend is turning bullish or the market is starting to break down. Placing stops to close or not at important price levels can get very frustrating because the market can stop you out and then go the direction that you thought leaving you behind and out of the market. Placing stops is one of the most important aspects of trading in my opinion.

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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