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.

Silver Futures

Silver futures in the May contract are up 27 cents at 18.55 an ounce trading higher for the 3rd consecutive trading session breaking major resistance as I will be recommending a bullish position if prices close above 18.50 while then placing the stop loss under the 10-day low which was also Monday's low around 17.73 risking around $800 per mini contract plus slippage and commission. The chart structure is relatively solid at present as the next major level of resistance is last November's high around $19 an ounce as gold and silver prices have broken out to the upside. The 10 year note is significantly higher once again hitting a 6 month high as interest rates have been heading lower in recent weeks, and that is bullish the precious metals and commodities in general as there seems to be what they call a flight to quality which affects the bond and precious metals market as investors park their money as a so-called safe haven. Silver prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher so let's look at playing this to the upside as the risk/reward are in your favor in my opinion.
TREND: HIGHER
CHART STRUCTURE: SOLID

Copper Futures

Copper futures in the May contract are higher by 250 points this Thursday in New York currently trading at 2.5700 a pound after hitting a 3 month low in yesterday's trade as I'm looking at a short position, however the chart structure is poor as the 10 day high stands around 2.71 as the risk/reward is not in your favor at present. However, I am certainly not recommending any type of bullish trade as the trend clearly is to the downside. I will wait for the chart structure to improve which could take a couple more days as prices are now trading under their 20 and 100-day moving average telling you that the trend has turned negative in the short term with the next major level of support down to 2.50 which was tested back in December 2016 on multiple occasions only to rally every single time. This is a unique situation in the precious metals as bullish trends continue in gold and silver, however we have a bearish trend in copper and that can happen at certain times due to the fact that gold and silver are used as a flight to quality where copper is an industrial metal so keep a close eye on this market for a short position.
TREND: LOWER
CHART STRUCTURE: POOR

Sugar Futures

Sugar futures in the May contract settled last Friday in New York at 16.77 a pound while currently trading at 16.83 in a lackluster holiday trading week as tomorrow is Good Friday as the markets will be closed. I have not been involved in the sugar market, but I have remained bearish over quite some time. I have clients that are short and if you are in this market to the downside place your stop loss above the 10-day high standing at 17.18 which is just an eyelash away as prices actually traded as high as 17.16 earlier in the trading session. Many of the commodity markets have reacted to the positive side over the last several days due to the fact that bond interest rates in the United States have been going lower and that is supporting prices, however if you're short, continue to place the proper stop and don't 2nd guess as I think that's the kiss of death over the course of time. Sugar futures are still trading under their 20 and 100-day moving average telling you the trend is lower, but for this market to resume its bearish trend the 16 level has to be breached in my opinion.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in the July contract are trading higher by 100 points at 141.25 in the July contract up in a slow manner with low volatility over the last several months as it looks to me that coffee prices are bottoming out in the short-term. I have written about coffee many times in the past as I'm currently not involved in this market and haven't been for several months as I think prices are limited to the downside as it looks to me that the 138 level has held as prices are now at a 3 week high. Coffee prices are now trading above their 20-day but still below their 100-day moving average which stands at 148 as that is the critical level for the bullish momentum to continue in my opinion so keep a close eye on this market to the upside. At present, I am recommending a short position in orange juice and in cotton and I am also bearish sugar. However, coffee prices are starting enter to enter the month of May with the chance of a frost occurring in Brazil, so there could be a price premium put into this market to the upside and if a frost does occur prices move substantially higher & extremely quickly like they did in 1994.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Orange Juice Futures

Orange juice futures in the May contract settled last Friday in New York at 164.40 while currently trading at 162.40 down 200 points for the trading week as I've been recommending a short position from around the 167 level and if you took the trade continue to place your stop loss above the 10-day high at 169.70 as the chart structure is outstanding at the current time. Juice prices are still trading under their 20 and 100-day moving average telling you the trend is negative as this has experienced wild volatility over the last couple of months making a fresh multi-month low 2 weeks ago before rallying sharply as that's when I decided to take the trade as the risk/reward was in your favor. At the current time I am also recommending a short position in cotton and I still remain bearish sugar prices here in the short term as the agricultural markets despite the recent rally still are in bearish trends so continue to play this to the downside, as the chart structure will not improve for another 7 trading sessions, so you're going to have to accept the monetary risk as the 150.00 level really is the critical area for further downside action.
TREND: LOWER
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.

Cotton Futures

Cotton futures in the May contract is up 60 points this Thursday in New York currently trading at 75.32 as I've been recommending a short position from the 76.25 level and if you took the trade continue to place your stop loss above the 10-day high standing at 78.07 as the chart structure will not improve until early next week. I'm also recommending a short position in the December cotton which is considered the new crop & will be harvested this fall in the southern part of the United States from around the 73.25 level & if you took the trade place the stop loss at 74.50 as an exit strategy. The next major level of support in the May contract was week's low around 73.70 as that level would have to be broken to continue its bearish trend as I still think this was just a kickback due to oversold conditions. The fundamental picture is mixed with a possible record crop in the United States, however strong demand remains as that is what is holding up prices at present, but stay short place & the proper stop loss as the chart structure in the December contract is outstanding therefore lowering monetary risk.
TREND: LOWER
CHART STRUCTURE: SOLID - IMPROVING

Wheat Futures

Wheat futures in the May contract settled last Friday in Chicago at 4.24 a bushel while currently trading at 4.33 up 9 cents for the trading week as I've not been involved in wheat for quite some time as this market remains incredibly choppy, but a breakout could be occurring as prices are right near a 3 week high. At the current time, I'm recommending a short position in soybeans as that might be coming to an end as the grain market is starting to enter the extremely volatile spring and summer months as volatility will expand exponentially in my opinion as the sideways to lower action might be over. Wheat prices are trading above their 20-day, but still below their 100-day moving average which stands at 4.38 as the official breakout is at the 4 week high of 4.42 as the chart structure is very solid at present so keep a close eye on this market to the upside. Acre estimates were released over the last several reports and it looks to me that we could be setting up for a problem which means higher prices as we have the lowest acres planted in decades in 2017 and if we do get the hot & dry summer especially wheat and corn prices could go to the upside rather dramatically like they did in 2012 as that was the last drought that we have experienced.
TREND: MIXED
CHART STRUCTURE: SOLID

Soybean Futures

Soybean futures in the May contract are higher for the 2nd consecutive trading session at 9.58 a bushel as I've been recommending a short position from around the 10.48 level and if you took that trade place your stop above the 10 day high which now stands at 9.68 as we are only about 9 cents away as this market has rallied significantly over the last several days. Soybeans reacted negatively off of the WASDE report which was released Tuesday sending prices to a new contract low below 9.30. However, prices have rallied $0.30 as a possible bottom finally might be at hand as spring planting is right around the bend as the weather is now the main focus on prices. Soybeans are still trading under their 20 and 100-day moving average telling you the short-term trend is lower and if stopped out look at other markets that are beginning to trend, as I also have a short recommendation in the November contract from around the 10.01 level so place your stop at 9.67 as an exit strategy.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Lean Hog Futures

Lean hogs in the June contract settled last Friday in Chicago at 72.77 currently trading at 72.35 basically unchanged for the trading week as I have been recommending a short position from around the 77.45 level and if you took that trade the 10-day high has been reduced in Monday's trade to 74.10 as the chart structure is outstanding currently. Prices are still trading under their 20 and 100-day moving average testing lows that we haven't seen since early December 2016 as I remain bearish so continue to place the proper stop loss as I still think the 68 level could be touched in the coming weeks despite the fact that cattle prices hit another contract high in today's action. Many of the commodity markets have been rallying in recent days due to the fact of the U.S Treasury yield hitting a 6 month low which helps push commodity or everyday products higher over the course of time, however the trend is still lower and trading with the path of least resistance is the most successful way to trade over the course of time in my opinion so stay short.
TREND: LOWER
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.