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 February contract are slightly lower this Friday afternoon in New York after settling last Friday at 1,216 currently trading at 1,260 as I’m currently recommending a long futures position while placing your stop loss below the 10 day low which is around 1,209 risking around $50 or $1,650 on a mini contract plus slippage and commission. Gold futures are trading above their 20 and 100 day moving average hitting a 5 month high as the chart structure will also start to improve on a daily basis starting next week as the market has caught fire recently due to worldwide problems as money is pouring back into the precious metals and out of the S&P 500 in the beginning of 2015.

Yesterday the Swiss government announced they will let the Swiss Franc float rocketing that currency up while sending shockwaves through the bond and currency markets and it certainly looks to me that problems are here to stay here for a while as Europe is a mess and this could push gold up to the next resistance level of 1,300 – 1,320 so take advantage of any price dip while maintaining the proper stop loss risking 2% of your account balance on any given trade as gold has finally turned into a short-term bull market once again.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures are trading above their 20 day but right at their 100 day moving average settling last Friday at 16.12 while currently trading at 17.05 an ounce as I’m recommending a bullish position in silver while placing your stop below the 10 day low which is at 16.11 risking around $.90 or $4,500 per contract plus slippage and commission as the chart structure will also improve on a daily basis starting next week. The next major level of resistance is between 17.35 – 17.50 and if that level is broken I would have to think that silver prices have a chance to reach $20 here in the short term as once again money is flowing into the precious metals and out of the stock market for the 1st time in several years as investors are thinking that silver may have been overdone to the downside.

Many of the commodity markets continue to head lower as there is weak demand throughout many sectors due to the fact that the U.S dollar is at a 9 year high while silver & gold prices have also been in bearish trends until recently, however with what’s going on in France and Isis running havoc throughout the Mideast people are finally looking at the precious metals as a safe haven once again so the rest of the commodity markets can go lower with gold and silver still moving higher but play by the rules as the chart structure meets criteria in my opinion.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Crude Oil Futures

Crude oil futures in the March contract settled last Friday at 49.00 while currently trading at 47.50 up about $.80 in early trade this Friday morning in New York as extreme volatility has occurred in recent days and if you’re still short this market I would now place my stop above yesterday’s high which currently stands at 51.73 risking around $4.25 or $4,250 per contract plus slippage and commission from today’s price levels. Crude oil futures are trading significantly below their 20 and 100 day moving average telling you that the trend still remains bearish as oversupply has decimated prices in recent weeks as who knows how far prices can actually go but stick to the rules as the 10 day high has tightened up considerably as prices have gone sideways in the last week or so with big trading ranges.

Crude oil prices have been dramatically cut in recent months due to the fact that Saudi Arabia refuses to cut supply coming out earlier this week reiterating that fact that they will not cut which keeps sending prices lower as they are trying to squeeze some American companies to get out of the business as the U.S is now a major producer which we weren’t just 5 years ago and that’s what’s changed the situation. The crude oil market I believe for the 1st time in history is not putting any price premium as in the past we always had a $10 or $20 price premium due to the fact of chaos in the Mideast but at this point problems in the Mideast are not affecting crude oil prices so this market still could remain bearish for some time to come especially with the U.S dollar hitting a 9 year high which is pessimistic all commodity prices.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Lean Hog Futures

Lean hog futures in the February contract are down 80 points this afternoon in Chicago settling last Friday at 79.02 while currently trading at 74.60 continuing its bearish trend as I’ve been recommending a short position when prices broke 86.00 & if you took that trade continue to place your stop at the 10 day high which currently stands at 80.00 risking about 550 points or $2,200 risk per contract plus slippage and commission.

Lean hog futures are trading far below their 20 & 100 day moving average as the fundamentals remain bearish in my opinion as expansion is currently happening increasing supplies dramatically over the next 6 months in my opinion so continue to play this to the downside and take advantage of any rallies while maintaining the proper stop loss. Cattle prices have been plummeting in recent days and that’s also been putting pressure on hogs as the fundamentals are more bearish then cattle at the current time as the next level of support is between 70– 72 and I think that will be tested next week. The chart structure in the hog market is relatively solid at the current time and it will be lowered starting next week tightening up the stop even more as the trend is your friend in the commodity market so do not try to buy this market and pick a bottom but stay with the path of least resistance which is to the downside and keep your trading theory simple.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Oat Futures

Oat futures in the March contract are up $.03 this Friday afternoon in Chicago currently trading at 2.85 a bushel as I’ve been recommending a short position from around 2.99 and if you took that trade make sure you place your stop loss at the 10 day high which currently stands at 3.07 risking around $.22 or $1,100 per contract plus slippage and commission.

Oat futures settled last Friday at 3.03 and traded as low as 2.78 earlier in the week hitting a 2 1/2 year low as the trend is your friend and I continue to recommend selling the oats while placing the proper stop loss as the risk/reward is highly in your favor on this trade as the original risk parameter was $450 as the chart structure was outstanding at that time. Oat futures can become extremely volatile as prices have traded in the low $2 range in recent years so continue to play the path of least resistance which in this market is to the downside as the chart structure will also start to improve later in the week as commodity prices still look weak in my opinion due to the extremely strong U.S dollar and outstanding growing conditions worldwide.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Corn Futures

Corn futures in the March contract are up $.05 this Friday afternoon in Chicago currently trading at 3.86 a bushel after settling last Friday at $4 trading down about $.14 for the trading week as I have been recommending a short position in corn and if you took that trade make sure you place your stop loss above the 10 day high which currently stands at 4.10 and that stop loss will also be lowered in Wednesday’s trade. Corn futures are trading below their 20 but above their 100 day moving average telling you that the trend is mixed to lower as I still believe lower prices are ahead due to the fact that the commodity markets look very weak and crude oil prices have been cut in half in recent weeks which I think eventually will affect corn to the downside.

The main bearish factor in the corn trade is the fact that the U.S dollar is sharply higher once again and this trend seems to be getting stronger on a weekly basis as we still have huge supplies globally and were going to plant a massive amount here again in the United States come April so continue to play this to the downside as the chart structure will start to tighten which is always what I’m looking for also meeting criteria. Many of the grain markets have been rolling over to the downside especially soybeans after the USDA report, however the USDA stated that corn produced 191 million bushels less in 2014 which was extremely bullish in my opinion, however this was the classic buy the rumor and sell the fact as we still have ample supplies and the South American weather has had ideal growing conditions as harvest will start to take place next month.
TREND: LOWER
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

Soybeans Futures

Soybean futures are trading below their 20 & 100 day moving average continuing its bearish trend hitting an 11 week low this week as the USDA report stated that 410 million bushels are in storage which was unexpected as carryover levels are near all-time highs after settling last Friday at $10.52 a bushel currently trading at $9.90 basically unchanged this Friday afternoon. I’ve been recommending a short position in soybeans for quite some time as this chart pattern has been very stubborn as prices have been choppy breaking out of a major consolidation and if you took this trade place your stop above the 10 day high which currently stands at $10.62 risking around $.70 or $3,500 per contract plus commission & slippage as the chart structure is terrible at the current time.

If you have not been short this market I would sit on the sidelines and wait for a rally to try to minimize monetary risk as the chart structure will not improve until another 5 days so be patient as the next level of support is at $9.60 – $9.80 and if that level is broken I think you’re going to have to retest the contract low of $9.20 as excellent weather conditions are still happening down in South America which could produce another record crop. Estimates of this year’s acreage is around 88 million which could produce around 4.6 billion bushels which is another all-time record which could balloon carryover levels numbers that we have never seen before so I remain pessimistic this market as fundamentals eventually will come into fruition in my opinion but continue to place the proper stop loss risking 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: AWFUL

Sugar Futures

Sugar futures in the March contract are currently trading at 15.30 continuing its bullish run hitting a 4 week high this week as prices are trading above their 20 but still below their 100 day moving average telling you that the trend is mixed as I was recommending a short position in sugar for quite some time getting stopped out at the 2 week high around 14.90 as I’m currently sitting on the sidelines waiting for better chart structure to develop. Dry weather down in Brazil is what’s causing prices to rally from their early January bottom at 14.07 as volatility should come back into this market but look for a solid trend as sugar prices look to be choppy in the weeks ahead.

Sugar futures have been very trendy in recent memory and as a commodity trader you always want to go with the past of least resistance and avoid markets that are choppy because they are difficult to be successful in because of the random moves so sit on the sidelines and keep an eye on this market as the chart structure should tighten up allowing us to place a tight stop loss lowering the risk as much as possible.
TREND: HIGHER
CHART STRUCTURE: POOR

Wheat Futures

Wheat futures in the March contract up $.06 this Friday afternoon in Chicago currently trading around 5.40 after settling last Friday at 5.64 a bushel as I’ve been recommending a short position and if you took that trade place your stop above the 10 day high which currently stands at 6.03 risking around $.65 which is high risk at the current time, however the chart structure will improve dramatically every single day next week lowering monetary risk to better levels. Wheat futures are trading below their 20 and 100 day moving average as prices hit 8 week lows, so continue to take advantage of any rallies while placing the proper stop loss as volatility is high in the wheat market and volatility should remain for many more weeks to come.

The grain market as a whole has been rolling over to the downside after the USDA reported bearish numbers but pretty neutral for the wheat market, however the U.S dollar has hit a 9 year high and with good growing conditions in the U.S prices are headed lower in my opinion so continue to place your stop at the 10 high which will come down to 5.80 in Tuesday’s trade. I think if 5.20 is broken you’re looking at possibly testing contract lows in the month of March around 4.80 a bushel as I still remain pessimistic most commodity sectors as the U.S dollar is in a secular bull market while much of Europe is absolutely collapsing right before our eyes as the Euro currency is down another 125 hitting an 11 year low as that trend is not over in my opinion as well.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Live Cattle Futures

Live cattle futures are trading below their 20 and 100 day moving average stating that the trend is to the downside for the 1st time in recent memory as prices have dropped 1400 points in the last 8 trading days continuing its extreme volatility and I am currently sitting on the sidelines in this market as volatility is too high plus the risk reward is not in your favor, however I have been pounding on the table telling anybody producing cattle you should be hedging up at these levels as prices are still historically high and the commodity markets still remain bearish.

Cattle prices have hit 5 month lows also dragging down hog prices here in recent weeks as I will wait for better chart structure to develop which will allow me to place a tighter stop loss as the 10 day high is about $5,000 away which does not meet my criteria so keep an eye on this market and I still am recommending hedging as who knows how far prices can drop just look at the crude oil chart. Cattle prices have been at historical highs in recent years and have stayed stubborn despite the fact that the U.S dollar hit a 9 year high and most of the commodity markets seem to be getting weaker, however cattle prices hung in there but it looks to me that this market finally has succumb to outside forces as an all-time top has been created in my opinion.
TREND: LOWER
CHART STRUCTURE: AWFUL

Coffee Futures

Coffee futures in the March contract have been extremely volatile in recent weeks due to the fact of concerns of lack of rain down in Brazil pushing prices up in over the last several weeks as I’m currently sitting on the sidelines in this market as coffee prices are trading above their 20 but still below their 100 day moving average telling you the trend is mixed. Coffee prices settled last Friday at 180 and are currently trading at 175.30 topping out around the 185 area as volatility should increase as the next 3 weeks are very critical to the coffee crop as traders are keeping a close eye on Brazilian weather.

As I’ve talked about in many previous blogs I think it’s very difficult historically speaking to have back to back droughts, but you never know as the weather is unpredictable, however this market has been choppy so wait for a better trend to develop and avoid any type of futures position at this time in my opinion. Many of the commodity markets are still heading lower because of the U.S dollar hitting a 9 year high and if adequate rain comes to key coffee growing regions over the next 3 weeks I would have to think that a retest of the 160 level would be in the cards so have patience and wait for a trend to develop.
TREND: MIXED
CHART STRUCTURE: POOR

What do I mean when I talk about chart structure and why do I think it is so important when deciding to enter or exit a trade?

I define chart structure as a slow and 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 and allowing you to place a stop loss with will be 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 but markets that continue to trend like the current soybean complex allowing for you to place close stops as it continues to fall dramatically. I always 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 loses.

Do You Add To Losing Trades?

This rule is extremely important and I witness it being abused constantly creating tremendous loses that are sometimes difficult to come back from. Never add to a losing position because if the position continues to go against you and now you have added even more contracts which are all losing money your account will suffer loses much more than 2% and in some case adding positions and never getting out of a losing trade has wiped peoples trading accounts down to zero because of 1 or 2 bad trades. Remember always play for another day you will have losing trades and the good traders manage losses and move on to the next possible trade.