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 December contract settled last Friday in New York at 1,275 an ounce while currently trading at 1,304 up nearly $30 for the trading week bottoming out last Friday around 1,262. I'm currently not involved in this market or any of the precious metals as gold and silver have remained extremely choppy in recent months. Gold prices are now near a three week high as the U.S. dollar has now hit a three week low and that has helped push prices up this week, and they are now trading above their 20 and 100-day moving average as the trend is higher. However, in my opinion, avoid this market as the trend is truly mixed. The stock market has hit another all-time high in today's trade as money has been coming out of gold & into the equity market over the last several weeks as I remain very bullish stocks. I think gold will remain choppy for the rest of 2017 unless some development happens with North Korea as that could reemerge at any moment. I still think that situation is not going away and I do think the downside in gold is limited. However, I will wait for better chart structure & a better risk/reward scenario before getting involved.
TREND: MIXED
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the December contract is currently trading at 17.35 an ounce after settling last Friday in New York at 16.79 up about $0.55 for the trading week right near a four week high. However, the trend does remain very choppy despite the fact that prices are trading above their 20 and 100-day moving average. I'm advising clients to avoid silver at the current time. The main reason why silver bottomed out last week is the fact that the U.S. dollar is now right near a three week low which is helping support gold and silver this week and as I've talked about in many previous blogs if you have a longer-term view silver prices look cheap in my opinion. I am bullish the commodity sectors almost across the board, as I think the spread between the stock market and the commodities are too wide as demand will finally start to come back into these markets and push prices higher. The next major level of resistance is around 17.50 as prices topped out a couple of months back around 18.29. I still think the North Korean situation will come to a head soon and if any military attack happens, you will see silver prices rally tremendously. I do think the downside is limited as I am looking for a better chart pattern to develop before entering into a bullish trade.
TREND: MIXED
CHART STRUCTURE: POOR

Copper Futures

Copper futures in the December contract settled last Friday at 3.03 a pound while currently trading at 3.1230 up about 900 points for the trading week continuing its bullish momentum. I'm not currently involved, but I am bullish prices as I am waiting for the chart structure and the risk/reward to be in your favor. I'm looking for some price retracement before entering into a bullish position. The main culprit for higher prices in copper is strong demand just like in the lumber market which is hitting another contract high today as we are rebuilding parts of the South & Puerto Rico which is causing physical demand for both of these products. I don't think that's going to stop anytime soon, and I'm certainly not recommending any bearish position as I do think higher prices are ahead. Copper is trading above its 20 and 100-day moving average telling that you the trend is to the upside. I had a bullish position several months ago that worked out well, as now I'm looking at entering once again as the U.S. housing market is also very strong coupled with the fact that economies around the world are improving and it still looks to me that prices have room to run to the upside.
TREND: HIGHER
CHART STRUCTURE: POOR

Mexican Peso Futures

The Mexican Peso is ending the week on a sour note down 50 points at 5216 after settling last Friday at 5331. I have been recommending a bearish position from around the 5421 level & if you took the trade continue to place the stop loss above the two week high of 5446 as the chart structure is poor as prices are dropping rather precipitously. As I've talked about in many previous blogs, I believe there was a double top that was formed around the 56 level as prices are now trading far under their 20 and 100-day moving average as the trend is lower. I think we will retest the April 26th low of 5017 in the coming days or weeks ahead and I'm still looking at adding more contracts on any rally, however that is hard to find at this time as the momentum is getting stronger on a daily basis. I still see lower prices ahead. Volatility is still rather low in the Peso despite today's 50 point drop as I've seen this currency have some wild fluctuations when problems arise in Mexico, however, stay short as I see no reason to take profits at this time as this is the strongest trend out of the currency markets.
TREND: LOWER
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.

Soybean Futures

Soybean futures in the November contract which is currently being harvested in the Midwestern part of the United States and is considered the new crop settled last Friday in Chicago at 9.72 while currently trading at 10.02 hitting a ten week high continuing with its bullish momentum to the upside. I have been recommending a bullish position from the 9.85 level and if you took the trade continue to place the stop loss at 9.55. However, that will be raised in next weeks trade, therefore, lowering the monetary risk as I do believe we could retest the July 11th high of 10.47 as dryness in Brazil is causing some concern at this point. You have to remember the fact that this is a La Niña year which could cause drought in certain parts of Brazil. Soybean prices reacted sharply higher after yesterday's crop report showing estimates of 49.5 bushels per acre which is still outstanding creating a 4.45 billion bushel production number in 2017 which is another record crop. However, as I've talked about in many previous blogs, all of the bearish news has already been factored into the price as now we are focusing on next year crop as the grain market looks cheap in my opinion. I'm also recommending a bullish position in soybean meal as I'm keeping a close eye on corn as it looks to be breaking out to the upside as well.
TREND: HIGHER
CHART STRUCTURE: POOR

Cocoa Futures

Cocoa futures in the December contract are currently trading at 2086 unchanged for the trading week. I have been recommending a bullish position from the 2010 level and if you took the trade continue to place the stop loss which has now been raised to 1999 as the chart structure is outstanding. I will be looking at adding more contracts in Monday's trade to the upside. Weather conditions in the Ivory Coast West Africa remain outstanding as we should produce an excellent crop, but all of that bearish fundamental news has already been reflected in the price as we have the strong demand season of October & Christmas ahead of us and I remain bullish. The chart structure is outstanding; therefore, the monetary risk is relatively low. I am still recommending this trade even at today's price levels as the risk is around $900 per contract plus slippage & commission as prices are still trading above their 20 and 100-day moving average telling you that the short-term trend is higher as this is my only soft commodity recommendation at the current time.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the March contract are currently trading at 14.37 a pound after settling in New York last Friday at 13.98 up about 40 points for the trading week still stuck in a three week consolidation as I still think we are right near major support on the daily chart. Large worldwide production continues to keep a lid on prices here in the short term. However, there are pockets of dry areas in Brazil through the La Niña affect which could produce a weather problem just like I've written about in the coffee market. I still think the volatility will be to the upside as the path of least resistance will be to higher prices as I will be looking at a bullish position possibly in next weeks trade. Sugar prices are right at their 20-day but slightly below their 100-day moving average as the trend at the current time is mixed, but I don't think that's going to last much longer especially with relatively strong oil prices. Sugar is used as biodiesel, and I think demand will start to come back to many commodity sectors including sugar so keep a close eye on this market for a possible bullish position in the days ahead as I think a breakout is looming.
TREND: MIXED
CHART STRUCTURE: POOR

Coffee Futures

Coffee futures in New York settled last week at 130.00 a pound while currently trading at 126.50 down about 350 points for the trading week right at major support levels in my opinion. I'm currently not involved in this market as it remains choppy. Beneficial rains in Brazil which is the largest producer of coffee in the world have promoted flowering for next year's crop. However, there are some dry pockets as the La Niña is around the corner and could produce weather problems. I still think higher prices are ahead as the volatility should be the upside as I'm waiting for something to develop before entering into a bullish position. The short-term trend is lower. However, the trend really is mixed and has been mixed over the last several months as volatility is starting to increase & should increase tremendously as we enter the winter months so continue to keep a close eye on this market for a possible bullish position as the sleeping giant will awaken soon. At present, I only have one soft commodity recommendation, and that is in the cocoa market as the rest of the sector remains choppy waiting for some fresh fundamental news to push prices higher.
TREND: MIXED
CHART STRUCTURE: POOR

Trading Theory

This next rule is extremely important, and I witness it being continuously abused creating tremendous loses that are sometimes difficult to come back from.

Never add to a losing position because if the position continues to go against you and now you have added even more contracts which are all losing money your account will lose much more than 2%. In some case adding positions and never getting out of a losing trade has wiped peoples trading accounts down to zero because of 1 or 2 bad trades.

Remember always play for another day you will have losing trades and the good traders manage loses and move on to the next possible trade.