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 August contract are ending the week on a sour note down $26 an ounce currently trading at 1,284 filling the gap that I've talked about in previous blogs that occurred on December 21st at 1,284 as this market has now hit a 6-month low. The U.S. dollar continues to hover around its contract high as that's the main culprit for depressed prices as gold continues its bearish momentum in 2018 also pushing silver prices down $0.60 this afternoon as that is my only precious metal recommendation at the current time. Gold futures are trading under 20 and 100-day moving average telling you that the trend is to the downside breaking out of a 4-week consolidation as the volatility certainly has expanded as the entire commodity markets across the board today are lower as the Trump tariffs talks are throwing a wrench into the closet and who knows how this situation is going to end up. The next major level of support stands at 1,260 as there is still room to run to the downside in my opinion as all of the interest still remains in the U.S. equity market which is also lower today, however the NASDAQ 100 did hit all-time highs once again this week as money flows continue to come out of gold and into stocks as I don't see that situation changing as I still believe the stock market will remain strong for the rest of this year.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Silver Futures

Silver futures in the September contract is trading sharply lower this Friday afternoon in New York down by $0.64 at 16.69 an ounce as the entire commodity markets are lower across the board due to the Trump tariffs. I have been recommending a bullish position from around the 16.91 level and if you took the trade continue to place the stop loss under the 10-day low at 16.45 as the chart structure is excellent. Silver prices are now trading right at their 20 and 100-day moving average as I still believe the trend is higher as gold prices are down nearly $30 in today's trade putting massive pressure on silver prices here in the short-term. Silver settled last Friday at 16.81 as prices are slightly lower for the trading week as the U.S. dollar continues its bullish momentum right at its contract high and finished up 110 points in yesterday's trade as that certainly is a bearish fundamental indicator towards the precious metals and silver prices. Volatility in silver certainly has increased this week as the commodity markets, in general, are experiencing high volatility all due to the uncertainty that is circulating between the United States and China as I don't think that situation is coming to an end anytime soon so stay long and lets see what Monday's trade brings as the original risk was about $600 per mini contract.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

Crude Oil Futures

Oil futures in the July contract settled last Friday in New York at 65.74 a barrel while currently trading at 66.67 up about $1 for the trading week right near a 2-week high. Next week the highly anticipated OPEC meeting will come about as they will state what their plans are as speculation is that they will increase production, but we will have to see how that situation develops as the volatility has come to a crawl over the last couple of weeks, but that certainly will send shock waves back into this market. Oil prices are still trading above their 20-day but below their 100-day moving average as the trend really is mixed as I am currently sitting on the sidelines waiting for another trend to develop as this week's API report was bullish as inventory levels were lower than expected. However, it looks to me that prices are just consolidating the recent run-up that we've experienced in 2018 and I think prices will remain in a sideways trend. The only recommendation I have out of the energy is a bullish natural gas trade which continues to grind higher on a weekly basis as the U.S. dollar is right near a 5-month high once again as that is keeping the lid on many of the markets coupled with that that the Trump tariffs have absolutely crushed some of the agricultural sectors and until that situation is resolved I don't think many of the commodity sectors are going anywhere.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Natural Gas Futures

Natural gas futures in the July contract settled last Friday in New York at 2.89 while currently trading at 3.02 breaking the critical 3.00 level as I have been recommending a bullish position from the 2.83 level and if you took that trade continue to place the stop loss under the 2-week low standing at 2.87 as this is one of the very few commodities that traded higher this afternoon. The energy sector was sharply lower today except for natural gas as they can move in opposite directions as I was also looking at adding more contracts if we closed above the 3.00 level. However, I will just stay with the original trade as the Trump tariffs have really spooked these markets so I will not add more positions at the current time. Natural gas prices are trading above their 20 and 100-day moving average as the trend is to the upside with the next major level of resistance around the 3.10 area as I still think higher prices ahead so stay long and continue to place the proper stop loss. The Midwestern part of the United States is going to possibly receive record temperatures this weekend as that is also supporting prices here in the short term as demand has come back into this commodity & if you take a look at the longer-term chart prices bottomed out around the 2.50 level as historically speaking prices are still cheap.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

S&P 500 Futures

The S&P 500 in the September contract settled last Friday in Chicago at 2782 while currently trading at 2777 down slightly for the trading week and I still remain bullish the equity markets as the NASDAQ 100 also hit all-time highs this week and the trend still remains strong. The Trump tariffs spooked many of the commodity sectors today as that also put pressure on the equity market, however, low unemployment coupled with the tax cuts continue to support prices here in the short-term and I still think 2018 will produce solid gains. The S&P 500 is trading above its 20 and 100-day moving average as the trend clearly is to the upside as the 10-year note is currently yielding about 2.90% as that is also beneficial for large and small corporations as easy money policies remain. The NASDAQ 100 has been incredibly strong as company's such as Amazon, Microsoft, and Google continue to push prices higher as the U.S. economy is very strong at the present time as the unemployment rate stands at 3.8% as we are basically at full employment as the fundamental picture for this sector remains very bullish. If you are long a futures contract continue to place the stop loss under the 2-week low standing at 2733 as the chart structure will start to improve on a daily basis next week, therefore, lowering the monetary risk as we are still about 100 points away from hitting all-time highs. I think the S&P will catch up to the NASDAQ 100 and the Russell 2000 which also hit all-time highs this week.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
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.

Soybean Futures

Soybean futures in the November contract which is considered the new crop and is currently being grown in the Midwest has traded lower for the 8th consecutive session after settling last Friday in Chicago at 9.89 while currently trading at 9.37 down $0.50 for the week and down $1.20 over the last 2-weeks due to the fact of excellent growing conditions and the Trump tariffs. Soybean prices are at a 1 -ear low as I'm not involved in this market as the chart structure is terrible as prices are becoming very cheap. However, tariffs are a terrible thing for agricultural markets and until this situation is settled prices probably will remain depressed. Volatility in soybeans certainly has expanded as that is expected as the summer season experiences high volatility for soybeans and the grain market as a whole as weather conditions have been absolutely outstanding and so looks like we could produce around 4.5 billion bushels as there is nothing bullish about this commodity. Currently, I do not have any grain recommendations as they all continue to move lower. However, we are experiencing oversold conditions at this time and if you are short I would probably start to take profits and if anything positive comes out of these tariffs you will see a sharp rebound quickly. Traders are keeping a close eye on the 7/10 day weather forecast as record temperatures could be hitting several sections of the Midwest part of the United States, however ample rain continues to fall as soybeans flourish in hot and wet temperatures.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Wheat Futures

Wheat futures have experienced tremendous volatility this week after settling last Friday in Chicago at 5.20 a bushel while currently trading at 5.04 as it traded as low as 4.87 earlier in today's session as the Trump tariffs have absolutely collapsed the grain market in recent days. As I've written about in many previous blogs, I was bullish on the wheat market and I still think higher prices are ahead as these Trump tariffs are frustrating. It certainly has impacted grain prices as I think they are incredibly cheap at this time, but I do not have any recommendations in the grain sector at the current time. Wheat prices are now trading under their 20 and 100-day moving average as the trend is lower, but it really is mixed as prices are right near a 6-week low as there are still concerns about the drought expanding in the southern plains of the United States, but the sell-off is due to the Chinese reciprocating tariffs on U.S. agricultural products. Traders are keeping a close eye on the 7/10 day weather forecast as we are supposed to get really hot temperatures in the Midwest. However, we have had an ample amount of rain as corn and soybeans are off to an outstanding growing season at the current time so let's sit on the sidelines in the wheat market and wait for the chart structure to improve, but I'm certainly not recommending a short position.
TREND: MIXED - LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Sugar Futures

Sugar futures in the October contract settled last Friday in New York at 12.52 a pound while currently trading at 12.56 basically unchanged for the trading week still experiencing a sideways trend. Sugar prices are trading right at their 20-day moving average but still below their 100-day which stands at 12.94 and if you take a look at the daily chart we are experiencing higher lows as it looks to me that a long-term bottom has occurred as the low was touched on April 25th at 11.23 as we have been grinding higher on a weekly basis. The downtrend line in sugar has been broken as I am currently not involved in this market. I'm waiting for the chart structure to improve as many of the agricultural markets have absolutely fallen out of bed over the last couple of weeks due to the fact of the Trump tariffs which has a terrible impact on commodity prices. Volatility in sugar is starting to increase and I will be looking at a bullish position in the coming weeks ahead. I will be patient as the risk/reward is not in your favor at this time, but I do believe that all of the bad fundamental news has already been reflected into the price while at this time I do not have any soft commodity recommendations as they all look bearish in my opinion except for the cotton market. The U.S. dollar is right at its contract high while finishing up 110 points in Thursday's trade which is a huge move as that is definitely a negative influence on prices in the short-term.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Trading Theory

What Is The RSI Oscillator? ---The RSI oscillator ranges from 0 to 100 and when a commodity is deemed to be at overbought levels when the RSI approaches the 70 level and beyond meaning if the oscillator has an overbought condition of 92 that is higher and even more of an overbought condition then the 70 level and could mean that it's getting overvalued and is a good candidate for a short-term pullback. On the other hand, if the RSI approaches 30 or below that is an indication that the commodity may be getting oversold and therefore likely to become undervalued.

The closer to zero the more oversold the commodity has become and the odds can increase for a kickback. If you are using this indicator you will be trading counter-trend meaning that you are always buying in a down market and selling in an up market or using the oscillator to determine when to take profits. In my opinion, this indicator should be used with other indicators when establishing a position or when exiting a trade.