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 April contract settled last Friday in New York at 1,176 an ounce while currently trading at 1,196 up $20 for the trading week continuing its bullish momentum right at a 7 week high. I have been sitting on the sidelines in this market looking at entering into a bullish position as I do think the precious metal sector has bottomed, however, the chart structure needs to improve as the 10 day low stands at 1,149 which is too far away, in my opinion, risking too much money so be patient as we could be in a bullish position in several of the precious metals later next week. Gold prices are still trading above their 20-day but below their 100-day moving average telling you that the shorter-term trend is mixed as the U.S dollar is also near a 4 week low as gold prices have been hit over the last year as all the interest remains in the S&P 500 which is right near another all-time high. Trading is all about risk/reward & its not in your favor at the present time, but could be later next week or on a significant price decline as I'm looking at buying this market around the 1,180 level which could happen on any given day so be nimble and quick as trading does not resume until Tuesday afternoon because of the holiday weekend in the United States.
TREND: HIGHER
CHART STRUCTURE: POOR - IMPROVING

Crude Oil Futures

Crude oil futures in the March contract settled last Friday at 54.87 a barrel while currently trading at 53.24 down about $1.50 for the trading week as I'm sitting on the sidelines looking at a possible short position as prices are right near a 4 week low. The chart structure will start to improve later next week therefore lowering monetary risk as we enter the long holiday Martin Luther King weekend as trading does not continue until Tuesday as prices are now trading below their 20-day but still above their 100-day moving average telling you that the short-term trend is mixed so avoid this commodity at present. Oil prices have rallied significantly over the last several months due to the fact that OPEC has cut production and are certainly trying to prop up prices. However I'm a technical trader, and when the risk/reward becomes in your favor I will take that trade, but at this point in time, your going to have to wait until next week before pulling the trigger. Major support is around Tuesday's low of 51.59 as that would also be the 4 week low as that would be the entry point so keep a close eye on this market as the trends are starting to come back in many commodity sectors.
TREND: MIXED
CHART STRUCTURE: IMPROVING

U.S. Dollar Futures

The U.S dollar in the March contract is trading lower for the 2nd consecutive session at 101.20 hitting a 4 week low as prices may have topped out on January 3rd at 103.81 as I'm looking at entering into a possible short position, however the monetary risk is too high at the present time as the 10 day high stands at 103.81 risking around $2,600 per contract plus slippage and commission which is too high for this commodity which generally is a lower volatility market. The U.S dollar is trading below its 20-day but still above its 100-day moving average which stands at 99.52 as the rally in the bond market has stalled out as the yield on the 10 year note is around 2.39% as we wait for the Trump administration to take place next week as that certainly will add some clarity to a lot of situations as volatility certainly will increase in my opinion. The chart structure will improve next week so keep a close eye on this market & look to sell on some type of relief rally.
TREND: LOWER - MIXED
CHART STRUCTURE: POOR

Soybean Futures

Soybean futures in the March contract settled last Friday in Chicago at 9.94 a bushel while currently trading at 10.48 up nearly $0.50 for the trading week all off of a strong USDA crop report which was released Thursday afternoon sending soybeans up $0.30 on bullish figures. Soybean prices are now trading above their 20 & 100-day moving average hitting a 3 week high as the trend has now turned positive, however, I am still sitting on the sidelines looking at entering into a soybean meal contract around the 324 level as the commodity markets are starting to become bullish. The U.S dollar has hit a 4 week low, and that is helping push commodities higher as I do think a top in that market has been formed at least here in the short term. Yesterday's report stated that the carryover level now stands at 420 million bushels which were reduced by 60 million also cutting the 2016 crop by 54 million bushels helping propel prices higher despite the fact that we probably will produce another record crop in the country of Brazil. The next major level of resistance is around the 10.50 level & if that is broken, I think the bullish trend would be confirmed in my opinion as prices looked to have bottomed out in my opinion.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Soybean Meal Futures

Soybean meal futures in the March contract are higher by 2000 points over the last 2 trading days currently trading at 334 a ton right near a 6 month high as the market reacted sharply higher off of the USDA crop report which was not as bearish as expected in my opinion as prices then moved higher. I am now recommending a bullish position & if you get lucky enough to buy the March soybean meal at 324, I would then place the stop loss below the 10-day low which stands at 310 risk risking around $1,400 per contract as the chart structure is outstanding at present. Soybean meal is now trading above its 20 and 100-day moving average as the major breakout is above 331 & if that that does occur I will also be recommending a bullish position as I think the grain market has finally bottomed out in my opinion as I'm currently also recommending a bullish position in the wheat market which announced the lowest planting in decades which is remarkable in my opinion.
TREND: HIGHER
CHART STRUCTURE: SOLID

If you are looking for a futures broker feel free to contact Michael Seery at 312-224-8140 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? I define chart structure as a slow 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 allowing you to place a stop loss 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 as I 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 loss.

Wheat Futures

Wheat futures in the March contract settled at 4.23 a bushel last Friday in Chicago while currently trading at 4.24 basically unchanged for the week reacting neutrally to yesterday's report despite the fact that winter wheat acres are estimated at 32.383 million which would be the smallest since 1909 which is a remarkable statistic in my opinion. Estimates of wheat's ending stocks were up about 4% as we do have ample worldwide supplies at present, and that's why wheat prices are relatively cheap historically speaking as I've been recommending a bullish position from around the 4.25 level and if you took the trade continue to place your stop loss under the 10 day low which now stands at 4.04 and will be raised to 4.12 in next week's trade as chart structure is excellent at present. Wheat prices are trading above their 20-day but still unable to crack their 100-day moving average which stands around 4.28 as we need to see that level breached be able to believe that this market truly is in a bullish trend. Volatility in wheat is relatively low as I do not expect that to continue as the weather is the main concern on investors minds at present as it is a long growing season.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Corn Futures

Corn futures in the March contract settled last Friday in Chicago at 3.60 a bushel while currently trading at 3.57 as the USDA released its monthly crop report yesterday having very little effect on trade as corn is one of the only markets that has not been rallying in recent weeks as over supplies continue to be the problem. At present, I'm sitting on the sidelines as I'm currently recommending a bullish position in wheat and I'm looking at entering into a soybean meal contract as the grains look bullish, but corn is limited to the up and downside so avoid this market at present. In my opinion I do think there is a high probability that a head and shoulders bottom has been created as volatility will certainly pick up in the month of February as it will be interesting to see how many acres will be planted in 2017 as I do think corn is in a bottoming pattern and will start to join the rest of the commodity markets in the coming weeks. Corn prices are trading right at their 20 and 100-day moving average which is pretty unusual as something is going to develop soon and I think that will be to the upside as the chart structure is outstanding at present so we could be involved soon.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Cocoa Futures

Cocoa futures in the March contract settled last Friday in New York at 2261 while currently trading at 2201 continuing its bearish momentum as I have been following this commodity over the last several weeks looking for a possible bullish entry. However, the trend remains strong to the downside as I'm sitting on the sidelines waiting for something to develop. Cocoa prices have really been affected by a very weak British Pound as I missed this move to the downside I am starting to get bearish the U.S dollar as I think that will be positive for cocoa prices as the chart structure remains outstanding at present so keep a close eye on this market to the upside. Cocoa prices are still trading below their 20 and 100 day moving average telling you that the short-term trend is lower & the longer-term trend also is lower, but prices are getting cheap in my opinion, but wait for the breakout to occur to the upside before buying as nobody wants to catch a falling knife as who knows how low prices could actually go.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 20.75 a pound while currently trading at 20.82 in a relatively nonvolatile trading week still digesting the sharp rally that we experienced over the last 4 weeks. Sugar prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher as I'm currently sitting on the sidelines, but could be involved in a bullish position next week as the chart structure will turn outstanding therefore lowering monetary risk which then meets my criteria. The commodity markets, in general, look bullish almost across the board as dry weather conditions in Brazil are pushing prices up in coffee and sugar in recent weeks coupled with the fact that the U.S dollar has also hit a 4-week low helping support prices. I trade the sugar market quite often actually & had a short position last month before getting stopped out right around Christmas as this commodity is very trendy and now the trend, in my opinion, is to the upside.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in the March contract settled last Friday in New York at 144.20 a pound while currently trading at 148.75 hitting a 6 week high as I'm currently sitting on the sidelines waiting for the chart structure to improve therefore lowering monetary risk as I am bullish coffee as I do think prices are headed higher. Dry weather conditions in the country of Brazil is starting to concern investors pushing up prices here over the last several weeks coupled with the fact of very strong demand despite estimates of nearly 55 billion bags being produced, however the tide has turned in the coffee market, so you want to play this to the upside in my opinion. Coffee prices are trading above their 20 & 100-day moving averages telling you that the trend is higher as the commodity markets, in general, are starting to perk up in early 2017 as I do think the giant bearish trends are over with. The chart structure is terrible at present as the 10-day low is way too far away so I will have to be patient as 3/5 days have to come off the calendar therefore improving monetary risk, but I'm certainly not recommending any type of short position.
TREND: HIGHER
CHART STRUCTURE: POOR

Trading Theory

How Can You Use Moving Averages To Your Advantage? A simple moving average is calculated by adding the closing price of a commodity such as crude oil for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying commodity, while long-term averages are slower to react.

I generally follow the 20 and 100-day moving averages when commodity prices break below or above in my opinion that establishes a trend which in my opinion should always be followed as the saying goes the trend is your friend. If the 20 and 100-day have crossed to the downside and you have a long position that is telling you that you are trading against the trend which can be dangerous over the course of time.

I generally like to buy a commodity or sell a commodity when the price has hit a 20 day high or low and the simple moving average also should have crossed at that point confirming or establishing that the trend is starting.