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.

Copper Futures

Copper futures in the July contract settled up 130 points for the week currently trading at 3.0755 a pound now trading in the middle of the 4-week consolidation as prices look to have bottomed out in my opinion. At the present time I'm sitting on the sidelines waiting for a 4 week high to occur as we continue to bounce off major support at the 3.00/3.05 level as copper prices have hung in there despite the fact that the U.S dollar continues to trade higher on a daily basis hitting a 5-month high in today's trade as strong demand due to a very robust housing market which continues to keep prices relatively strong. Copper is trading above their 20-day moving average but still below their 100-day which stands at 3.15 as I will be patient and wait for the breakout to occur while waiting for the risk/reward to become in your favor as we will not be involved until next week's trade most likely so keep a close eye on this market as I do think these prices are bottoming out. The entire precious metal sector has been on the defensive in 2018 despite the fact that crude oil prices hit a 4-year high today and the rest the commodities have started to come to life as I think that will start to bleed into the copper sector especially if the U.S dollar starts to top out as the volatility still remains relatively low for such a historically volatile commodity as I don't think that will last much longer.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Crude Oil Futures

Crude oil futures in the July contract are trading lower for the 4th consecutive trading session right near a 3-week low as I was not involved in this commodity, but if you did have a bullish position it is time to exit & move on as a short-term top may have been created. Oil prices settled last Friday in New York at 71.37 a barrel while currently trading at 69.31 down over $2 for the trading week while now trading under its 20-day moving average for the 1st time in months, but still above its 100-day as the trend is mixed as the API report showed on Wednesday a large increase in supplies coupled with the fact that the U.S. dollar is trading at a 5-month high up 40 points this afternoon putting pressure on many of the markets at this time. Oil has had a nice run in 2018 as I do think the downside is limited as there is major support around the 67.50 level as I think that could be tested in next weeks trade as I do not see a longer-term bearish trend developing as this is a healthy kickback in price as I still see higher prices ahead as there are a lot of geopolitical problems such as the country of Venezuela which is a complete mess as their production numbers continue to decline over the course of time. My only energy recommendation at the current time is in the natural gas market which hit a 2-month high as I still think higher prices are ahead as we enter the volatile summer season, however, crude oil & gas are different commodities & can move in opposite directions.
TREND: MIXED
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Natural Gas Futures

Natural gas futures in the July contract is currently trading at 2.98 after settling last Friday in New York at 2.87 up about 11 points for the trading week hitting a 3-month high continuing its bullish momentum. I have been recommending a bullish position originally from the June contract from the 2.83 level and if you took that trade the stop loss remains at 2.80 as the chart structure will start to improve later next week, therefore, the monetary risk will be lowered as prices are still trading above their 20 and 100-day moving average as the trend is getting stronger on a weekly basis. Natural gas prices are now traded higher for the 4th consecutive session looking to retest the January 30th high of 3.01 & if that is broken I think we could head up to the next major level of resistance at 3.10 as we are starting to enter the volatile summer season as that's when heavy demand comes into play. The energy sector is sharply lower across the board today due to the fact that Saudi Arabia and Russia might be agreeing to increase oil output, but that does not have anything to do with natural gas as the United States is the largest producer in the world as oversupply issues have been the main reason why we are still at these depressed levels as I think there's still room to run so continue to place the proper stop loss and stay long.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

10-Year Note Futures

The 10-Year Note in the June contract is trading higher for the 6th consecutive trading session after settling last Friday in Chicago at 118/27 while currently trading at 119/20 rallying off of the news that the North Korean Summit has been canceled coupled with the fact that the Federal Reserve might only raise interest rates 2 more times in 2018. I have been recommending a short position from the 120/18 level & if you took that trade the stop loss remains at 119/22 on a closing basis only as we could finally be stopped out today, however, if you are a longer-term trader I would just stay short this market as the yield at the present time is 2.96% as I still think we're headed to 3.50% come Christmas time. The 10 year note is now trading above its 20-day moving average, but still below its 100-day as the trend is mixed as we bottomed out on May 17th at 118/10 as the yield on that day was 3.12% as this has been a significant rally over the last week or so, but I do believe it's just a kickback as short covering had something to do with this rally in my opinion. The U.S. stock markets have stabilized and remains bullish in my opinion as the economy is in outstanding shape, but sometimes markets can act in strange ways as I think that's what's occurring in the situation, but if we are stopped out we will move on as I'm not giving up on this trade as I will counter trend trade this once the opportunity arrives again.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

Orange Juice Futures

Orange juice futures in the July contract settled last Friday in New York at 166.20 while currently trading at 168.50 up 200 points for the trading week as I've been recommending a bullish position over the last several months from the 142.30 level and if you took the trade place the stop loss which has now been raised to 165.40 as the chart structure is outstanding at the present time due to the fact that prices have gone sideways over the last 2-weeks. I still have contacts in the country of Brazil as they tell me that the orange juice trees are suffering from stress as they have had very minimal amount of rain over the last 2-months as many of the commodity markets are lower today, but juice continues to hang in there as I still think we can trade up to the 200 level in the weeks ahead. Prices are still trading above their 20 and 100-day moving average as clearly this trend is strong to the upside as this is my only soft commodity recommendation currently so continue to place the proper stop loss as we could be stopped out possible even in today's trade due to the fact that the stop is only about 300 points away. The next major level of resistance is the contract high which was recently hit around the 171 level & if that is broken I will be recommending to add more contracts to the upside as the risk/reward are in your favor in my opinion.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 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

Corn futures in the July contract which is considered the old crop which was grown in 2017 is currently trading at 4.05 a bushel after settling last Friday in Chicago at 4.02 up about 3 cents for the trading week & traded as high as 4.12 in yesterday's trade as we have not seen those levels since last August as the bullish momentum continues. If you are long a futures contract place the stop loss at 3.95 as I'm currently not involved, but I do think higher prices are ahead as I will wait to see what Tuesday's trade brings as it is a long holiday weekend due to Memorial Day as the grain market looks bullish across the board in my opinion. Crude oil prices are down $3 in today's trade as that's generally a bearish or negative influence on corn prices, but not in this case as the weather is the main influence on prices as we are in the high 80s over the next week or so as this has now become a full-blown weather market. Corn prices are trading above their 20 & 100-day moving average as the trend is higher as the Trump tariff talks have subsided and China has agreed to buy an additional 35%/40% on American agricultural products which is bullish the grain market as a whole. In my opinion, I think we can trade near the 4.50 level even without a weather problem, but if we do experience a drought tremendous gains to the upside could be ahead as I'm telling my farmer clients do not sell your cash crop at this time as prices are still cheap as I will be looking at a bullish position if prices are lower come Tuesday.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW - INCREASING

Wheat Futures

Wheat futures in the July contract is currently trading higher by $0.12 at 5.41 a bushel after settling last Friday in Chicago at 5.18 up about $0.24 for the trading week as prices have reached levels that we have not seen in 9-months as this trend is getting stronger to the upside on a weekly basis. If you have read any of my previous blogs you understand I have been bullish wheat and corn as I'm currently not involved in a futures position, but I do think higher prices are ahead as I think we could test last July's high around $6 as there are significant weather problems in the southern Great Plains part of the United States as that has been prevalent for months now as prices are finally acting correctly in my opinion. Wheat futures are trading above their 20 and 100-day moving average as the trend clearly is to the upside & is the strongest grain out of the entire sector & if they don't start to receive rain soon prices could accelerate quickly to the upside so continue to play this higher as I am advising farmer clients to not sell your crop as I still think there is room to run. There are also concerns about the Russian crop as prices historically speaking are still very cheap across the board in my opinion despite the fact that the U.S dollar has hit a 5 month high in today's trade as wheat is in a weather market as that will dictate short-term price action as the weather at the current time is problematic so stay long.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Soybean Oil Futures

Soybean oil futures in the July contract settled last Friday in Chicago at 30.98 while currently trading at 31.46 up nearly 50 points for the trading week as I have been recommending a bullish position around the 31.70 level and if you took that trade place the stop loss at 30.55 as the chart structure will start to improve in next week's trade. Oil is trading above its 20-day moving average but still below its 100-day as the trend is higher to mixed as we hit a 6-week high in yesterday's session as I still remain bullish. The grain market as a whole has come to life this week as the tariff talks with China have subdued as that sent the entire sector higher as we enter the extremely volatile summer months as demand is coming back into this complex which is a terrific thing to see. Traders are keeping an eye on the 7/10 day weather forecast as we are witnessing the upper 80s as the hot & dry weather conditions generally come about in the months of June and July as we have not experienced a drought since 2012 as we are due for some type poor crop cycle so stay long and if you have not taken the original trade I'm still recommending it at today's price levels as the risk is around $600 per contract plus slippage & commission as the risk/reward is in your favor in my opinion.
TREND: HIGHER - MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Oat Futures

Oat futures in the July contract has now finished higher 9 out of the last 10 trading sessions finishing up another 3 cents at 2.47 a bushel continuing its bullish momentum hitting a 2-month high as I am considering a bullish position, however the 10-day low stands at 2.31 as the risk is around $1,000 per contract plus slippage & commission as that is too much for this commodity at the current time, but on any type of 6/7 cent retracement I will be recommending a bullish position. The grain market in general has turned bullish as the U.S. and China have agreed to put the tariff talk on hold as China also has agreed to increase purchases of U.S agricultural commodities which is a very bullish fundamental factor towards prices as I am bullish across the board as I think higher prices are ahead as we enter the extremely volatile summer season for the oat market so let's wait for some type of pullback before entering, but I'm certainly not recommending any type of bearish position at this time. Oat futures are trading above their 20 and 100-day moving average as this market has room to run as clearly the trend has now turned positive after bottoming out on April 23rd around the 2.20 level as prices look cheap as they are catching up to the wheat and corn markets which continue their bullish momentum as I think higher prices are ahead in those sectors as well so be nimble and patient and wait for some type of profit-taking.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

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.