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 1,196 an ounce while currently trading at 1,202 up about $6 for the trading week still hovering right near a 7 week high as I'm currently sitting on the sidelines as I'm involved in other precious metals that have also broken out. Gold prices are trading above their 20 day but still below their 100-day moving average having a nice rally in recent weeks despite the fact that the U.S dollar remains strong as I am bullish the commodity markets in general and at present I am recommending bullish positions in silver and copper as I don't want to be overloaded all in one sector as that is poor risk management in my opinion. Volatility in gold certainly will increase as it is inauguration day here in the United States as Donald Trump officially will become president and I'm certain we will experience high volatility in 2017 across all sectors which is good news for investors as I think the volatility will be to the upside in commodities.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures in the March contract settled last Friday in New York at 16.76 an ounce while currently trading at 17.00 up about $0.24 for the trading week as I am recommending a bullish position from around the 16.77 level and if you took that trade continue to place your stop under the 10 day low which stands at 16.25, however in Monday's trade that will be raised to 16.45 as the chart structure is outstanding. Silver prices are trading above their 20-day moving average & about $0.30 away from their 100-day moving average as I do think a bullish trend is starting to develop as the risk/reward certainly is in your favor as there are very few times that you can trade silver risking small amounts as this is a highly volatile market historically speaking. In my opinion I do think that the U.S dollar is starting to top out & if I am correct that would certainly be bullish the commodity markets and especially the precious metals which have been hampered by a strong U.S dollar over the last several years and if you did not take the original trade I am still recommending it even at today's price level.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Crude Oil Futures

Crude oil futures in the March contract settled last Friday in New York at 53.15 a barrel will currently trading at 52.88 still stuck in a 6-week consolidation as I've been sitting on the sidelines waiting for this market to develop a trend as prices continue to move sideways. Crude prices are trading below their 20-day but still above their 100-day moving average telling you that the trend is mixed as a 4 week low will be created if prices break 51.59 as there as there is very little fresh fundamental news to dictate short-term price action in my opinion. Prices double topped around the 56 level as we are just stuck in a trading range as I am still bullish the commodity markets in general as there are rumors that OPEC might even cut further in 2017 and I do think demand will come back especially with improving economies throughout the world, however, there is no trend in this market so look at other sectors that are beginning to trend with better risk/reward scenarios.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Soybean Futures

Soybean futures in the March contract settled last Friday in Chicago at 10.46 a bushel while currently trading at 10.63 continuing its bullish momentum as I'm currently sitting on the sidelines in this market as the chart structure remains poor therefore the monetary risk is too high. Weather problems in South America have pushed up soybean prices and especially the soybean meal which has been the leader in this complex as prices are right near major resistance between 10.70/11.00 as prices are now trading above their 20 and 100-day moving average telling you that the short-term trend is higher. A survey was released by Farm Futures this morning stating that they estimate soybean planting for 2017 to be around 90 million acres compared to 83 million acres in 2016 which is an incredibly high number in my opinion and could certainly produce a record crop by a wide margin, but we still have to see if those figures come to fruition. At present, I'm recommending bullish positions in wheat and in the rice market as I just missed an entry in the soymeal, but I do think this whole complex is moving higher despite bearish fundamentals.
TREND: HIGHER
CHART STRUCTURE: POOR

Soybean Meal Futures

Soybean meal futures in the March contract settled last Friday in Chicago at 333.90 a ton while currently trading at 345.20 up about 1200 points for the trading week continuing its bullish momentum. I was giving the recommendation to buy a futures contract at 324, but that was never executed as I missed the trade to the upside, however I do have clients who were lucky that did get involved despite at a little higher price so if you did the trade continue to place your stop loss under the 10 day low which stands at 310 as the risk is very high at this time. Soybean meal prices have now hit a 6 month high on weather concerns down in South America as wet conditions are pushing up prices as potential yields could also be lowered sending soybeans to a multi-month high as well. Soybean meal prices are trading above their 20 and 100-day moving average telling you that the trend is higher, however if you are not involved in this market I would avoid this trade at present as the risk/reward is not in your favor as the chart structure is terrible due to the fact that prices went straight up.
TREND: HIGHER
CHART STRUCTURE: POOR

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.

Cocoa Futures

Cocoa futures in the March contract settled last Friday in New York at 2213 while currently trading at 2163 down about 50 points for the trading week remaining in a five-month bearish trend. If you have been following any of my previous blogs you understand that I'm keeping a close eye on this market to the upside as I think prices are getting cheap as a possible head and shoulders might be developing, however, sit on the sidelines & wait for the breakout to occur which still stands at 2291 which is over 200 points away. Cocoa prices are still trading below their 20 and 100-day moving average telling you that the trend clearly is to the downside so be patient as the chart structure will also start to improve next week, therefore, lowering the monetary risk. At the current time, I'm recommending only one position in the soft commodity markets and that's in the sugar market as I do think commodities are headed higher in 2017, but in the short term cocoa still remains bearish. If you are short a futures contract, my exit strategy would be to place your stop loss at the 10-day high standing at 2258 which is about $1,000 risk from these price levels.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Coffee Futures

Coffee futures in the March contract settled last Friday in New York at 149.30 a pound while currently trading at 152.70 continuing its bullish momentum hitting a 7 week high continuing to grind higher on a daily basis. If you have been following any of my previous blogs you understand that I am bullish coffee as I do think prices are moving higher, however, the chart structure never met my criteria, so I am sitting on the sidelines. However, I'm certainly not recommending any type of short position as the trend is higher. Coffee prices are trading above their 20 and 100-day moving average with the next major level of resistance up around the 160 level as I'm also recommending a bullish position in sugar as I think the commodity markets, in general, will move higher as you have to remember coffee prices were at 180 just 3 months ago, so there is room to run to the upside in my opinion. Seasonality speaking we are starting to enter the extremely volatile season for coffee as I will wait for the chart structure to improve which will still take another 3 days as we could be involved next week to the upside.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Copper Futures

Copper futures in the March contract settled last Friday in New York at 2.69 a pound while currently trading at 2.6060 down about 800 points for the trading week as I have been recommending a bullish position around the 2.62 level and if you took the trade continue to place your stop loss under the 10 day low which stands at 2.51 as the chart structure will improve in next weeks trade, therefore, lowering the monetary risk. Copper prices are still trading above their 20 and 100-day moving average telling you that the short-term trend is higher as prices hit major resistance at 2.70 last week but unable to break that critical level. At present, I'm also recommending a bullish position in silver as I do think the precious metals are headed higher so continue to play this to the upside while risking 2% of your account balance on any given trade. If copper prices break 2.70, you would have to think that the bullish trend could continue to the upside possibly hitting the 3.00 level as prices are up about 30% since October all on the perception of stimulus programs being announced by the Trump administration.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Wheat Futures

Wheat futures in the March contract settled last Friday in Chicago at 4.26 a bushel while currently trading at 4.26 as prices are stuck in the mud as I've been recommending a bullish position from this level and if you took this trade place your stop loss which has been raised to 4.12 as the chart structure is outstanding at present. Wheat prices have gone nowhere over the last 2 weeks as the next major level of resistance is Monday's high around 4.37 and if that is broken prices could retest the 4.45 level and if that is broken I think prices could go substantially higher so continue to play this to the upside. Wheat prices are trading above their 20 day but still slightly below their 100 day moving average with low volatility which is really surprising in my opinion as I would think during this month of January prices would be much more volatile due to weather conditions, but that is not the case at present. The grain market, in general, have started bullish trends as I'm also recommending a bullish position in rice as the risk/reward is still in your favor in the wheat market as what we are lacking is some fresh fundamental news and some volatility.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Trading Theory

If you follow this rule you will have a chance of being successful over the course of time, if you don’t follow this rule you will be sure to lose your money quickly. This rule is simple Do Not OVERTRADE EVER for this is an easy way to lose all your capital quickly. My definition of over trading is risking too much money on any given trade, for example if you are trading a $100,000 dollar account and you place a gold trade today you should limit your loses to 2% of the account value which in this case is $2,000 which allows you to be wrong on many trades and still be around to play another day. In futures and option trading you will have losing trades that is for certain so make sure you manage those losses and move on to another trade.