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 1,269 an ounce while currently trading at 1,285 up about $16 for the trading week holding major support on multiple occasions around the 1,264 level as it looks to me that a possible rounding bottom might be taking place in this commodity. I am not involved in gold. However, I am looking at a potential bullish position as prices are right near three-week highs with excellent chart structure; therefore, the monetary risk is relatively low for such a volatile commodity. Gold prices are now trading above their 20 & 100-day moving average telling you that the short-term trend is higher and I do have a bullish bias in silver as that commodity looks very cheap at the moment. Keep a close eye on gold as we could be involved in a bullish position in next week's trade. Gold prices have held support in recent weeks despite the fact that the U.S. dollar is at a three month high & if that trend should reverse and start to move lower that would be a positive fundamental situation towards gold prices. I still think many of the commodity sectors are underpriced as I will not take any short positions as we head into 2018 as the volatility in gold remains remarkably low as we have gone nowhere over the last six weeks. However, I think a trend to the upside is looming.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: low

Silver Futures

Silver futures in the December contract settled last Friday in New York at 16.83 an ounce while currently trading at 17.04 up about 20 cents for the trading week. I still have a bullish bias in silver as prices historically look cheap, and I will be looking at a bullish position in Monday's trade if prices close above 17.31 while then placing the stop loss under the 2 week low which stands at 16.64 risking around $0.70 or $3,500 per large contract or $700 per mini contract plus slippage & commission. Silver prices are trading above their 20 and 100-day moving average as the trend is to the upside in this market & has acted stronger than gold in recent weeks as solid demand is starting to support prices as volatility remains very low as I don't think that's going to last much longer. Silver prices have held major support around the 16.60 level on multiple occasions despite that the U.S. dollar still is at a three month high which is a negative influence. However, silver prices have held its own in recent weeks, and I think the next trend will be to the upside and I will not take a short position as I think the downside is very limited. If the 17.31 level is broken then we should retest the 17.50 area which is the 7 week high & if that is broken I think we could hit the $18 range rather quickly as I think there's a lot of pent-up demand for silver at these depressed levels.
TREND: MIXED - HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Crude Oil Futures

Crude oil futures in the December contract settled last Friday in New York at 55.64 a barrel while currently trading at 57.17 up about $1.50 for the trading week based on two reasons. Political unrest in Saudi Arabia which is the largest producer of oil in the world and strong worldwide demand continuing to push prices higher. I have been recommending a bullish position from around the 53.15 level and if you took the trade the stop loss in Monday's trade will be raised to 53.89 as the chart structure next week will improve on a daily basis, therefore, lowering the monetary risk as this trend is strong & is getting stronger on a weekly basis. Oil prices are trading above their 20 and 100-day moving average telling you that the trend is to the upside and I will be recommending adding to this position once the risk/reward becomes in your favor. But at this point that is not the situation so just stay long the original contract & let's see what next week's trade brings. Oil prices are starting to ride the coattails of the U.S. stock market which is right near all-time highs and improving worldwide economies continue to push up certain sectors so stay long & continue to place the proper stop loss as who knows how high prices can go. I do think $60 level is a realistic area.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING

Mexican Peso Futures

The Mexican Peso futures in the December contract settled last Friday at 5185 while currently trading at 5211 up about 26 points for the trading week still experiencing the extremely nonvolatile trading action. I have been recommending two positions over a couple of months with an average price around 5330 & if you took the trade continue to place the stop loss at the 10-day high standing at 5238 which is just an eyelash away. For the bullish momentum to continue we still have to break the October 27th low of 5127 which seems like a mile away at this time due to the low volatility as the Peso is trading above its 20-day but still below their 100-day moving average telling you that the trend is mixed. However, I will continue to place the proper stop loss & if we are clipped, I will move on & look at other markets that are beginning to trend. The U.S. dollar is still at a three month high as many of the currencies have been going sideways in recent weeks including the Peso as we head into the holiday markets which keeps a lid on prices across the board unless some economic situation develops.
TREND: LOWER - MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY:LOW

Coffee Futures

Coffee futures in the March contract settled last Friday in New York at 127.50 while currently trading at 129.80 a pound up about 230 points for the trading week. I have talked about the December contract but expiration is upon us so let's focus on March as I will be looking at a bullish position if prices break the five-week high of 131.75 on a closing basis. If that situation does occur, I will place the stop loss under the 10-day low which stands at 124.80 risking around 700 points or $2,800 per contract plus slippage and commission as the risk is high as coffee is a very large contract. The chart structure will start to improve early next week, therefore, lowering the monetary risk as prices are now trading above their 20-day moving average, but still below their 100-day which stands at 135.40 as volatility still remains extremely low. At the current time, my only bullish soft commodity recommendation is in the sugar market which is higher for the 6th consecutive session today. I am becoming bullish most commodity sectors so keep a close eye on coffee as we could be involved in this sleeping giant come next week's trade.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

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.

Corn Futures

Cotton futures in the March contract settled last Friday in New York at 68.77 while currently trading at 68.94 unchanged for the trading week and still stuck in an eight-week tight consolidation. I'm looking at a bullish position if prices break yesterday's high of 69.67 & if that does occur, place the stop loss at the two-week low standing at 68.07 risking $800 per contract plus slippage & commission. The chart structure in cotton is outstanding at present as prices reacted pretty neutral off of the USDA crop report which was released yesterday stating that the U.S. will produce around 21.38 million bales which was pretty much expected as this market looks to turn bullish in my opinion. Cotton prices are trading above their 20 and 100-day moving average telling you that the trend has turned to the upside as the risk/reward are in your favor in my opinion as the breakout could happen in Monday's trade so keep a close eye on this market as we could be involved in next week's trade. The agricultural markets have been going sideways for quite some time as the downside I think is very limited as I'm bullish the commodity markets as I will not take a short position in cotton as I think historically speaking prices look cheap.
TREND: MIXED - HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cotton Futures

Corn futures in the December contract are down 6 cents this week at 3.42 a bushel continuing its bearish momentum hitting a fresh contract low yesterday reacting negatively off of the USDA crop report estimating 175.4 bushels per acre which is an all-time high. Production numbers were raised 298 million bushels to 14.578 billion as this report was extremely bearish in my opinion. At present, I'm not involved in corn and I will not take a short position. However, after that, I would have to think that corn prices will probably move $0.10/$0.15 lower in the coming weeks ahead as there is nothing bullish about this commodity except the fact that unleaded gasoline is hitting another contract high today. The volatility in corn is extremely low at the present time as there will be very little fresh fundamental news to push prices higher except for possible short covering as the large money managed funds are heavily short wheat and corn so look for lower prices ahead. Corn prices are trading below their 20 and 100-day moving average as the trend is to the downside. I still think prices are limited as we're talking $0.10 or $0.15 which is not much as in the summertime that is a one day rally or selloff. I still think 2018 there will be a silver lining in this commodity as we just need to plant fewer acres than we have in the past otherwise this is going to put farming corn in jeopardy down the road in my opinion.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 14.38 while currently trading at 14.90 a pound up about 50 points for the week. I am now recommending to add a second position at this level as the chart structure has improved tremendously and the stop has been raised to 14.15 and will also improve in 3 trading sessions. The original recommendation was around the 14.57 level and if you take both of these trades the total risk on both contracts is around $1,200 plus slippage and commission. I do believe the risk/reward are in your favor. The next major level of resistance is the September 15th high of 15.20 and if that is broken I think prices could head much higher as sugar is riding the coattails of unleaded gasoline and crude oil prices as the commodities are starting to gain some ground which is an excellent thing to see as I am bullish heading into 2018. Sugar prices are trading above their 20 and 100-day moving average telling you that trend is higher as we continually grind higher as this is the 6th consecutive up session all with very modest gains as the momentum has turned north.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 4.25 a bushel while currently trading at 4.29 up about 4 cents for the trading week. I'm not involved in this market, but if you are short a futures contract place the stop loss above the two week high which stands at 4.32 which is just an eyelash away as prices are right near a two week high. Wheat prices are still trading under their 20 and 100-day moving average as the trend is to the downside, but honestly speaking it is mixed as the USDA crop report yesterday was slightly friendly as demand is starting to come back into this market at these relatively cheap prices stopping the bearish momentum. For the bearish trend to continue, we have to break the October 31st low of 4.16 as we should start to enter the volatile winter season. We are off to an ideal start to the winter wheat crop as the weather in the Great Plains of the United States is favorable at this time, but volatility certainly has come to a crawl in the grain market especially wheat. Large money managed funds are still heavily short wheat and corn which hit a contract low in yesterday's trade due to a very bearish report, and they still think prices are headed lower, but in my opinion, I think the downside is very limited so avoid this market at the present time.
TREND: LOWER - MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Trading Theory

What Is A Rounding Bottom Chart Pattern ? A chart pattern used in technical analysis, which is identified by a series of price movements that, when graphed, form the shape of a "U". Rounding bottoms are found at the end of extended downward trends and signify a reversal in long-term price movements. This pattern's time frame can vary from several weeks to several months and is deemed by many traders as a rare occurrence. Rounding bottom looks similar to the cup and handle pattern, but does not experience the temporary downward trend of the "handle" portion. The initial declining slope of a rounding bottom indicates an excess of supply, which forces the stock price down. The transfer to an upward trend occurs when buyers enter the market at a low price, which increases demand for the stock. Once the rounding bottom is complete, the stock breaks out and will continue its new upward trend.