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.

Mexican Peso Futures

The Mexican Peso in the March contract settled last Friday at 4594 while currently trading at 4730 hitting a 3 week high and if you have been following my previous blogs I've talked about this recently as prices hit all-time lows just a couple of weeks back against the U.S dollar as I think prices are just getting way overdone to the downside which is all based on the Trump administration being negative towards Mexico. The Peso is now trading above its 20-day moving average for the first time in months, but still below their 100-day as the short-term trend is mixed as I will wait for the 4 week high before entering into a bullish position as the chart structure will start to improve on a daily basis, therefore, lowering the monetary risk. I've been keeping a close eye on the U.S dollar for a short position, but it remains resilient still trading at about 100.50 as higher interest rates in the United States continue to support the U.S dollar. The next major level of resistance in the Peso is 4800, and if that is broken, you have to think that the multi-year bearish trend has finished.
TREND: MIXED
CHART STRUCTURE: SOLID

Gold Futures

Gold prices are trading lower for the 4th consecutive trading session settling last Friday in New York at 1,204 while currently trading at 1,185 down about $20 for the week hitting a 2 week low as money flows are coming out of gold and into the equity markets which hit another all-time high this week. Gold prices are now trading below their 20 and 100-day moving average as I have been sitting on the sidelines in this market recommending bullish positions in copper and silver as gold is consolidating the recent run-up in prices in my opinion. If you have read any of my previous blogs I am bullish the commodity markets, however, gold might be in a different situation because many times it goes in opposite direction of the U.S stock market, but I do think the downside is limited as I'm waiting for the chart structure to improve before entering into a fresh position. Gold prices bottomed out on December 15th around 1,124 and then rallied as high as 1,220 over the next 6 weeks as investors thought prices were too cheap, however for this trend to continue we need to break out above 1,225 in my opinion.
TREND: MIXED
CHART STRUCTURE: SOLID

Silver Futures

Silver futures are trading lower for the 3rd consecutive session trading at 16.78 an ounce after settling last Friday in New York at 17.03 as I've been recommending a bullish position with an average price right around 16.97 and if you took the trade continue to place your stop loss under the 10 day low which stands at 16.61 on a closing basis only. The chart structure in silver is outstanding as volatility is relatively low as gold prices continue to put pressure on silver as were hanging in there by the skin of our teeth as this was a relatively low-risk trade. Silver prices are trading right at their 20-day but still below their 100 -moving average which stands at 17.35 which is also major resistance as silver prices have had a very difficult time cracking that level as prices touched 17.31 earlier in the week only to sell off once again. At present, I am also recommending a bullish copper position as I would really like to see gold start to rally as I think that would help support silver in the short-term as the U.S dollar continues to trade above 100 which is keeping a lid on the precious metals.
TREND: HIGHER - MIXED
CHART STRUCTURE: EXCELLENT

Crude Oil Futures

Crude oil futures in the March contract settled last Friday in New York 52.75 a barrel while currently trading at 53.10 basically unchanged for the trading week still stuck in a 7-week consolidation as I have been sitting on the sidelines for months in this market waiting for a true breakout to occur. At present, I'm advising investors to avoid the energy sector as it has been extremely choppy over the last several months & very difficult to trade successfully in my opinion so look at other markets that are beginning to trend with better potential. Crude oil prices are trading right at their 20-day and still above their 100-day moving average as OPEC is hinting at more cuts in 2017 helping support prices. The U.S dollar is trading right above 100 near a 14 year high which has definitely hurt the commodity markets over the last several years, but oil bottomed out in 2016 around $25 as I do think 2017 will be much more volatile due to less regulations rolled out by the Trump administration.
TREND: MIXED
CHART STRUCTURE: SOLID

Copper Futures

Copper futures in the March contract settled last Friday in New York at 2.6250 a pound while currently trading at 2.6750 up about 500 points for the trading week continuing its bullish momentum as I've been recommending a bullish position from around the 2.62 level & if you took the trade place your stop at the 10 day low which stands at 2.58 as the chart structure will not improve for another 4 days. Copper prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher with 2.70 as major resistance as we actually closed above that level a couple of days ago but unable to continue to push to higher levels. At present, I'm also recommending a bullish silver position as gold prices have been selling off in recent days putting pressure on copper and silver, but continue to play this to the, and once the chart structure improves and we can close above 2.70, I'm looking at adding more contracts.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

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.

Soybean Futures

Soybean futures in the March contract settled last Friday in Chicago at 10.67 a bushel while currently trading at 10.45 down about $0.20 for the trading week lower for the 3rd consecutive trading session as I'm currently sitting on the sidelines as this market remains choppy. I do have several recommendations in the grain complex as the trend is higher in soybeans, but the chart structure never met my criteria to enter into the trade so be patient as volatility certainly will increase as spring planting is not that far away. The problem with soybeans is they have terrible fundamentals including the fact that we might possibly plant 90 million acres in 2017 which could produce a 4.8 billion crop which would be a massive record crop once again as supplies would be absolutely huge continuing to put pressure on soybean prices in the long run, but the official USDA report on acres does not come until the month of March. The real strength in the soy complex is soybean meal which I was trying to buy 2 weeks ago at 324 and just missed it as that market has exploded on tight supplies which is what is keeping soybeans relatively high at present as soybean oil continues to hit new lows so avoid the soybeans & look at other markets that are beginning to trend.
TREND: MIXED
CHART STRUCTURE: SOLID

Corn Futures

Corn futures in the March contract settled last Friday in Chicago at 3.69 a bushel while currently at 3.61 as I've been recommending a bullish position from around the 3.64 level and if you took that trade continue to place your stop loss under the 10-day low which stands at 3.55 however in Monday's trade will be raised to 3.58 as the chart structure is outstanding. The main reasons why I took the trade to the upside is the fact that prices are trading above their 20 and 100-day moving average and the risk/reward is highly in your favor coupled with incredibly tight chart structure. As I've talked about in many previous blogs, I do think that corn is basically stuck in a trading range until spring planting comes about which are still a couple of months away. However, I still think we can make a little bit of money on this trade, but the expectations are much lower because of the low volatility. Traders are awaiting the next USDA crop report which is still about 2 weeks away as volatility will increase in the month of February as the 2017 growing season isn't too far away.
TREND: HIGHER - MIXED
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures in the March contract settled last Friday in New York at 73.04 while currently trading at 74.34 up about 130 points for the trading week as I have been recommending a bullish position from around the 73.30 level and if you took that trade continue to place your stop loss under the 10 day low which stands at 71.85 as the chart structure will improve on a daily basis next week, therefore, lowering the monetary risk. Cotton prices are trading above their 20 & 100-day moving average telling you that the short-term trend is higher with major resistance at 75.00 & if that is broken I think we could retest the contract high that was hit on August 5th around 77.50 as this trend remains bullish in my opinion. Volatility in cotton at present is relatively low as historically speaking cotton can become extremely volatile with large price swings, but that generally does happen during the summer months when weather can influence prices dramatically so continue to play this to the upside and if 75.00 is broken on the closing basis we might be looking at adding more contracts as the risk/reward is in your favor.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Live Cattle Futures

Cattle futures in the April contract settled last Friday in Chicago at 119 while currently trading at 117.20 down about 180 points for the trading week right near a 2 week low as I've been sitting on the sidelines in this market as I missed the move to the upside over the last several months. Cattle prices bottomed out on October 13th around 97.25 and has rallied about 20% in a short amount of time which has been a remarkable rally in my opinion; however, prices might be topping out. Cattle prices are trading right at their 20-day but far above their 100-day moving average and that just tells you how far this market has come, but I need better chart structure to develop so keep a close eye on this commodity over the next several weeks. Volatility in cattle is starting to increase at these higher price levels as hogs also are experiencing high volatility due to possible tensions developing between Mexico and the U.S sending hog prices sharply lower in yesterday's trade.
TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID

Coffee Futures

Coffee futures in the March contract settled last Friday at 153.20 a pound while currently trading at 151.40 down about 200 points for the trading week still hovering right near a 7 week high as I've been sitting on the sidelines in this market, but I do have a bullish bias. If you do have a futures contract on my recommendation would be to place your stop at the 10-day low at 146.75 as the chart structure has improved tremendously as volatility has come to a crawl. Coffee prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher as early estimates of the crop in Brazil were between 50/55 million bags and that has now possibly been reduced to 44/47 million bags as that has been the main reason why prices have been rallying over the last several weeks. At present, I only have one soft commodity recommendation as that is in cotton as I am waiting for a better chart pattern to develop. However, I'm certainly not recommending any type of short position as the path of least resistance is higher. Traders will be keeping a close eye on the weather conditions in Brazil as there are pockets of dryness as I don't see this low volatility continuing for much longer.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

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.