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.

Crude Oil Futures

Crude oil futures settled last Friday in New York at 47.66 a barrel while currently trading at 45.55 down about $2 for the trading week, but still trading under their 20 and 100-day moving average as prices are looking to retest the May 5th low of 44.13 in my opinion. The longer-term and short-term trend is to the downside as large supplies continue to keep a lid on prices. Gasoline and heating oil also continue to move lower, and my only recommendation in the energy sector is short the natural gas market at this time. The chart structure in oil is poor as the 10-day high is around $52 which is over $6 away. I'm currently waiting for the monetary risk to be lowered and I am looking at a short position possibly in next week's trade. There are concerns about gasoline demand which has also pushed oil lower over the last several weeks, but this market has been very choppy in 2017 as the volatility in the commodity markets are starting to rise once again as the summer months are upon us and historically speaking this is when you see large price swings up or down.
TREND: LOWER
CHART STRUCTURE: POOR

Natural Gas Futures

Natural gas futures settled last Friday in New York at 2.99 while currently trading at 3.04 up 5 points in an extremely low volatile trading week. I've been recommending a short position from the 3.17 level, and if you took the trade place the stop loss in Monday's trade at 3.26. Tuesday it will be lowered to 3.17 as the chart structure is becoming outstanding. For the bearish momentum to continue prices have to break the February 28th low of 2.88 which is still quite a distance away so stay short and continue to place the proper stop loss as the trend is still lower in my opinion. Prices are still underneath their 20 and 100-day moving average looking for some fresh fundamental moves to put some volatility back into this market. The energy sector, in general, continues its bearish momentum this week as oversupply issues continue to hamper this market as production levels in natural gas are increasing in 2017 and 2018. Higher temperatures in the Midwestern part of the United States are expected this weekend and that has helped prop up prices here in the short-term, but the 7/10 day forecast still has average temperatures, so let's see what develops next week. I'm still looking at adding more contracts to the downside.
TREND: LOWER
CHART STRUCTURE: SOLID - IMPROVING

Silver Futures

Silver futures in the July contract settled last Friday at 17.52 an ounce while currently trading at 17.28 trading lower for the 3rd consecutive trading session after topping out at 6-week highs earlier in the week around 17.74. I'm currently sitting on the sidelines as this market remains choppy in my opinion. Silver prices are trading right at their 20-day but still below their 100-day moving average as the U.S dollar has rallied somewhat over the last couple days putting pressure on gold and silver prices. The chart structure is poor therefore the monetary risk is too high for me to enter into this market at this time. The next major level of support is right at the 17 level, and for this market to continue its bullish momentum, we would have to break 17.75. Volatility has come upon us once again which is excellent to see in my opinion. Many of the commodity markets remain mixed as they are not trading in unison and that's what I'd like to see occur once again like we experienced in years past.
TREND: MIXED
CHART STRUCTURE: POOR - IMPROVING

10-year Note Futures

The 10-year note in the September contract settled last Friday in Chicago at 126/20 while currently trading at 126/08. I'm currently not involved in this commodity, but I believe that the yield on the 10-year will rise from 2.20% as the stock market continues to hit all-time highs almost on a daily basis. I'm recommending a bullish position in that sector while keeping a close eye on a short position in the bond market. The 10-year hit a contract high on June 6th at 126.29 as the chart structure is starting to improve, however, prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher. We seem to have a terrorist attack everything week as that has helped prop prices up, but now if you look at gold that is starting to selloff with the bond market as tensions are starting to ease in my opinion. I think interest rates at these levels are absolutely ridiculous and will start to head higher over the course of time so keep a close eye on it. I am looking at a short position in the coming weeks as there is no reason to have these ridiculously low rates especially due to the fact that the economy is growing coupled with outstanding corporate earnings and low unemployment, but sometimes markets do the opposite of what should be occurring.
TREND: HIGHER
CHART STRUCTURE: SOLID - IMPROVING

Dow Jones Futures

The Dow Jones settled last Friday in Chicago at 21,203 while currently trading at 21,260 continuing its bullish momentum. I have been recommending a bullish position right around the 21,000 level & if you took that trade continue to place your stop loss under the 10-day low which stands at 20,929 as the chart structure will improve in Tuesday's trade to 21,060. Prices were up 70 points in today's action despite the fact that the Nasdaq 100 is down 100 points today. The stock market, in my opinion, continues to move higher as nothing came out of the Russia investigation yesterday and investors are still very bullish the stock market due to extremely low-interest rates and great corporate earnings. The Vix, which is the measure of volatility hit a 23-year low in yesterday's trade and that tells me that very few people think this market is headed lower. Continue to place the proper stop loss as I'm looking at adding more contracts on any type of price decline as the chart structure is outstanding at the present time. Therefore, the monetary risk is relatively low for such a large contract. The Dow Jones is still trading above its 20 and 100-day moving average is telling you that the trend is higher with volatility coming to a crawl due to the summer doldrums which historically speaking is a common occurrence.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

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 November contract, which is considered the new crop & is currently being grown in the Midwestern part of the United States is trading higher for the 6th consecutive trading session. It settled Friday in Chicago at 9.25 a bushel while now trading at 9.44 with the hot and dry weather forecasted for next week sending prices higher. If you have read any of my previous blogs, you understand that I was bearish soybeans but was not involved in this market. I am currently recommending a bullish position in corn as that is in a different situation as the fundamentals remain very bearish as we should be completed this weekend for planting in 2017 as a record crop is still expected. Soybean prices are now trading above their 20-day but still below their 100-day moving average, and I'm advising clients to avoid this market at the present time as a possible bottom might be in place in my opinion as the summer months bring extreme volatility and we have seen nothing yet in my opinion. If the Midwestern part of the United States does not get rain soon, prices will head sharply higher as we are on our 14th day of no rain. However, we have experienced mild temperatures, and this market is neutral at the present time.
TREND: MIXED
CHART STRUCTURE: SOLID

Corn Futures

Corn futures in the December contract is trading higher for the 6th consecutive trading session hitting a 1 year high as prices are up another 3 cents at 4.07 a bushel. I have recommended a bullish position from the 3.96 level and if you took the trade continue to place the stop loss above the contract low of 3.75 as the volatility is expanding rapidly. The state of Illinois has not had rain for 14 days, and there is no rain on the horizon. However, the real story here is that the large money funds are still short 160,000 contracts. That is remarkable in my opinion as I think they are on the wrong side of this trade. I still see higher prices ahead so stay long as I'm looking to add more contracts on any type of profit-taking. Traders reacted neutrally to the WASDE crop report today, but the main focus is weather and weather only in my opinion. The crop is not off to a great start, and if we don't get rain in the next ten days, you're going to see some significant gains in corn. You must remember we planted 4 million fewer acres than we did in 2016 so we will not produce a record crop in 2017. The grain market looks bullish in my opinion.
TREND: HIGHER
CHART STRUCTURE: POOR

Cotton Futures

Cotton futures in the December contract which is concerned with the new crop settled last Friday in New York at 73.12 while currently trading at 72.60. I will be recommending a short position once prices crack 72.15 while then placing the stop loss above the 10-day high at 73.70 risking around $700 per contract plus slippage and commission. The chart structure is outstanding at the present time. Cotton prices are trading under their 20 and 100-day moving average as we have been stuck in a 3 month consolidation. The WASDE crop report was released this afternoon and was pretty much construed as neutral as we are still planting over 12 million acres in the southern part of the United States which is very bearish fundamentally speaking, so keep a close eye on this market as we could be short soon. As a trader, you must analyze the risk/reward, and I do believe this is highly in your favor as cotton is a very large contract with huge price swings in the summer months as breaking out of a long consolidation can be very powerful in my opinion.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the July contract are currently trading at 14.23 a pound after settling last Friday in New York at 13.74 up about 50 points for the trading week. However, prices are still trading under their 20 and 100-day moving average as this bounce back in price was due to oversold conditions in my opinion. The same story persists in sugar as the Brazilian Real remains feeble against the U.S. dollar, therefore, devaluing sugar prices coupled with overproduction continues to put pressure on prices in 2017, but for the bearish momentum to continue, we have to break the June 2nd low of 13.63. I remain negative in the short-term. At the present time, I'm not involved in any of the soft commodities, and I still think sugar will continue its downtrend, but I do think prices are getting cheap historically speaking in many different commodities. I will look at other markets with a better risk/reward scenario coupled with a new trend developing.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Coffee Futures

Coffee futures in the July contract is currently trading at 128.25 a pound after settling last Friday in New York at 125.25 up about 300 points for the trading week. I'm currently not involved in this market. However, I will not initiate a short position as I think coffee prices are cheap and I'm looking at a bullish position once a true breakout occurs. Coffee futures are still trading under their 20 day and 100-day moving average which stands at 139 which is quite a distance away. However, the chart structure is rather solid at the present time, and the volatility is really low as prices have been grinding lower. At the present time, we are in the frost season in the country of Brazil which is the largest producer in the world as colder temperatures are expected this weekend, but no frost as the agricultural markets are starting to stabilize despite the fact of the Brazilian Real remaining very weak against the U.S dollar. If you take a look at the daily chart, there is major support around the 125 level which was hit in the last 5 trading sessions and unable to break. I do believe we are finding support as prices are bottoming out in my opinion.
TREND: LOWER
CHART STRUCTURE: SOLID - IMPROVING