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 December contract had a wild trading session this Friday afternoon in New York trading as low as 1,146 down over $20 only to explode higher finishing up $29 to close around 1,190 in one of the wildest trading days I can remember, as prices hit a 2 week high. If you are currently short this market I would exit at the 10 day high which occurred today so currently I’m neutral this market sitting on the sidelines as I still think gold prices are headed lower for the remainder of 2014 as money flows will continue into the S&P 500 in my opinion, however when prices hit a 2 week high it’s time to move on and sit on the sidelines and wait for another trend to develop. The U.S dollar was sharply higher this morning which caused precious metal prices to be sharply lower in early trade, however the U.S dollar sold off somewhat closing up around 20 points as massive short covering in my opinion is what’s to blame for today’s price action. The trend now in gold is choppy to neutral as volatility is extremely high at the current time so make sure you use the proper amount of contracts making sure that you risk 2% of your account balance on any given trade as 1,200 is the next resistance level in the December contract.
TREND: NEUTRAL
CHART STRUCTURE: SOLID

Silver Futures

Silver futures are trading above their 20 day but still below their 100 day moving average as prices skyrocketed after trading sharply lower in early trade only to finish up 70 cents at 16.30 as prices have finally hit a 2 week high for the 1st time in 5 months which is remarkable as this trend has been terrific to the downside and if you were short you should be exiting today and sitting on the sidelines remaining neutral. Prices this Friday afternoon traded as low as 15.30 an ounce rallying $1.00 from session lows finishing up about $.50 for the trading week despite the fact that the U.S dollar was relatively strong once again as everybody was running for the hills as short covering is to blame for today’s price action in my opinion. The next level of resistance in silver is between 17.00/17.50 where prices were about 3 weeks ago so wait for better chart structure to develop as volatility certainly has increased in the last couple of weeks and historically speaking silver is one of the most volatile commodities around.
TREND: MIXED
CHART STRUCTURE: SOLID

Crude Oil Futures

Crude oil futures in the December contract finished up $1.75 a barrel in New York this Friday afternoon to close right around $76 a barrel after hitting new lows earlier in the trade also hitting multi-year lows as the trend still remains bearish in my opinion as prices are trading far below their 20 & 100 day moving average. If you are currently short this market I would place my stop loss above the 10 day high at 79.70 risking around $4.70 or $4,700 per contract. Crude oil prices have been plummeting in recent months due to the fact that there are massive supplies and record supplies here in the United States as everybody seems to be producing oil as Saudi Arabia has not cut any production sending prices lower over hoping to squeeze some American companies in the oil business where profitability now is very difficult. Prices have dropped from late May around $102 a barrel to today’s price which is pretty dramatic as gas prices around the country have dropped dramatically which is terrific for the consumer and I think that trend is here to stay as we do not rely on mid-East oil near as much as we did only 5 years.
TREND: LOWER
CHART STRUCTURE: POOR

Orange Juice Futures

Orange juice futures in the January contract are up 330 points this Friday afternoon at 129.60 however prices are still trading below their 20 & 100 day moving average telling you that the trend is lower as I’ve been recommending a short position when prices broke the 140 level several weeks back while placing my stop above the 10 day high which has been moved down to 137 risking around 500 points from today’s price level or $750 per contract. Orange juice prices this week were basically unchanged consolidating the recent downturn as I think prices will retest the 120 level in the short term. The price action today was blamed on cold weather throughout the United States as it certainly looks like it’s going to be another polar vortex all over again, however cold-weather will not affect the orange juice at this time as the cold won’t go that far south, however it reinstates that traders realize we’re going into a possible frost season as they are putting a premium back into the price however, maintain your stop loss at 137 and if that stop is executed sit on the sidelines and look for a better market that is trending strong in one direction.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in the March contract broke out of a consolidation to the downside trading below its 20 & 100 day moving average settling last Friday at 62.61 going out this Friday in New York around 59.50 hitting a 5 year low. I am currently recommending a short position in cotton while placing your stop loss above the 10 day high which currently stands at 63.70 risking around 400 points or $2,000 per contract as the chart structure is poor at the current time as prices have plummeted this week. The problem with cotton is the fact that the U.S dollar remains extremely strong keeping a lid on prices as well as large worldwide supplies & the fact that China has massive reserves of cotton which are still rumored to be possibly sold onto the market so continue to play this to the downside as the chart structure will not improve for another 4 to 5 days so the risk will remain $2,000 per contract. The trend in cotton has turned negative due to the fact that the USDA estimated higher U.S and global production this week as harvest activity in the southern part of the United States is in full swing and should produce an outstanding crop which should limit prices to the upside.
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

Coffee Futures

Coffee futures hit a 2 week high in New York today up about 300 points trading above its 20 &100 day moving average up for the 4th consecutive trading session settling last Friday at 186.75 while going out this afternoon around 196 up around 900 points for the trading week as I remain neutral in this market. The weather down in Brazil appears to be pretty solid at this time with rain in the forecast as the Brazilian REAL has hit a 9 year low against the U.S dollar and that generally has producers selling their crop, however prices are stable due to the fact that it’s a long growing season and dry weather could still appear and the fact that we had a terrible crop last year as worldwide supplies are not that ample at the current time but this market remains extremely choppy so wait for better chart structure to develop and that could take some time as volatility remains high. Many countries around the world including Central America, South America as well as Columbia are producing large crops at this time but all eyes are on the weather down in Brazil as we off to a much better start than we did in early 2014 as the critical months in the growing season are still ahead.
TREND: LOWER
CHART STRUCTURE: SOLID

Live Cattle Futures

Live cattle futures for the February contract finished higher for the 3rd consecutive trading day finishing up another 50 points at 171.50 as I’ve been recommending a bullish position when prices broke 170 while placing my stop loss below the 10 day low which currently stands around 165.50 as the chart structure was very solid at the time of the breakout as the risk from today’s price levels is around 600 points or $2,400 per contract. This has been one of the best bull markets in the last several years as feeder cattle prices hit all-time highs once again in the May contract up 140 points to close around 234.50 despite the fact that corn prices are right near 3 month highs as nothing seems to stop the cattle market to the upside at the present time. The trend is your friend in the commodity markets and the trend in this complex is extremely strong to the upside so continue to buy any rallies as higher prices are ahead in my opinion as prices are trading far above their 20 and 100 day moving average telling me that the trend is getting stronger to the upside on a weekly basis as the 10 day low will not be raised for at least 4 more trading sessions. The consumer is the only thing at the present time that can slow down prices but they are still willing to pay any price and with the smallest herds in 65 years and insatiable demand prices will remain strong throughout 2014.
TREND: HIGHER
CHART STRUCTURE: SOLID

Sugar Futures

Sugar futures in the March contract had a wild trading week as I’ve been recommending a short position from around 15.65 placing your stop at the 10 day high which was 16.40 as prices did breach trading as high as 16.44 but stops are used always on a closing basis only so you should still be short this market as prices backed down in the last 2 days currently settling at 15.90 while continuing to place your stop at 16.40 on a closing basis. The sugar market hit new contract lows last week but then surged in Tuesday’s trade up about 50 points, however prices have come back down along with crude oil which hit a new multi-year low as I still think the long-term downtrend is intact so continue to play this to the downside making sure you use the proper amount of contracts risking 2% of your account balance on any given trade. Volatility in sugar is relatively high at the current moment as a possible retest of the contract low of 15.50 could be tested next week as the risk reward is in your favor to the downside in my opinion, as prices are still trading below their 20 and 100 day moving average telling you that the trend remains bearish.
TREND: LOWER
CHART STRUCTURE: SOLID

Wheat Futures

Wheat futures in the December contract finished higher for the 5th consecutive trading session hitting a 10 week high closing at 5.64 in the December contract as cold temperatures throughout much of the United States this early is spooking the wheat market higher as there is not enough snow to blanket the crop currently with below average temperatures. Wheat futures are trading above their 20 & 100 day moving average as I’ve been recommending a long position when prices broke out to a 4 week high around 5.20 while maintaining a proper stop loss which is still the 10 day low of 5.10 risking around $.50 per contract or $2,500 from today’s price levels, however if you are not in this trade I would wait for a pullback to enter on the long side. Wheat futures can become extremely volatile during the winter months so I expect to see high volatility for several more months as the next major point of resistance is 5.80 which was hit in late August as the chart structure is poor at the current time due to the fact that we rallied about 50 cents for the week which was almost a 10% move. The grain market today was mostly lower with soybeans down over $.30 and corn down about $.04 but we closed right near session highs once again so continue to play it to the long side.
TREND: HIGHER
CHART STRUCTURE: POOR

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.