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 is currently trading at 1,258 an ounce after settling last Friday at 1,254 up slightly for the week still right near a 7-month low as the precious metals, in my opinion, remain very weak. As I've written about in previous blogs, I have a bearish bias towards gold prices, and I still think 1,200 is a realistic level that we could be trading at in the coming weeks. The Trump tariff situation has been established today which has been one of the main reasons why we have seen weaker commodity prices across the board over the last several weeks. Gold prices are trading far under their 20 and 100-day moving average as the trend is to the downside as demand for this precious metals is weak at the current time as silver, copper, & platinum all remain bearish trading near contract lows once again this week. As I have talked about previously, all of the interest still lies in the U.S. equity market which is slightly higher in today's trade as the U.S. employment number was very impressive. We added 213,000 jobs as money continue to flow out of gold and into the stock market, and I don't see that trend ending any time soon. If you are short a futures contract place the stop loss at the 10-day high standing at 1,274 as an exit strategy as the chart structure will also improve in next week's trade, therefore, the monetary risk will also be lowered so stay short if you already have a bearish position.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY:INCREASING

10-Year Note Futures

The 10-year note in the September contract traded higher by 4 ticks at 120/10 this week as the yield currently stands at 2.83% as prices are right near a 5-week high as I am still monitoring this trade as I'm looking for a short position on any rally near the 121 level as that is acting as critical resistance. Volatility remains relatively low as the monthly unemployment number was released today stating that we added 213,000 new jobs as the U.S. economy remains very strong, but now with the Trump tariffs, money flows have entered the bond market as a flight to safety, in my opinion. However, I don't think that's going to last much longer. The 10-year note is trading above its 20 and 100-day moving average as the short-term trend is to the upside as this would be a counter-trend recommendation which I don't do very often so be patient & let's see what tomorrow's trade brings. If you take a look at the daily chart, there is a possible double top that may have been created around the 121 level as money flows continue to support this market. The commodity sectors continue their bearish trends as nobody wants to own anything with tariffs and I'm hoping that situation comes to an end soon and if that does happen the bond market could start to accelerate to the downside in my opinion.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Crude Oil Futures

Crude oil futures in the August contract settled last Friday in New York at 74.15 while currently trading at 72.43 down about $1.70 for the trading week after hitting a 4-year high on July 3rd at 75.27 as profit-taking has come about sending prices slightly lower. President Trump contacted the Saudi Arabian king requesting that they raise production to 2 million barrels but that has not been written in stone and that has sent the market lower this week. The original agreement was only a 600,000 production increase as this is the only bullish commodity at the current time as the Trump tariffs were established today as the commodity markets continue to move lower due to that fact. Oil prices are trading above their 20 and 100 day moving average as the trend is to the upside as the volatility certainly has increased at these escalated levels as I don't see that going away anytime soon as the U.S employment member was released today as we added 213,000 jobs which were higher-than-expected as the economy is outstanding and that's why you're seeing such strong demand for crude oil and unleaded gasoline at this time also supporting prices. The chart structure at the current time is terrible due to the recent run-up in prices as I'm not involved, but I'm certainly not recommending any type of bearish position as I still think higher prices are ahead.
TREND: HIGH
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Copper Futures

Copper futures in the September contract is trading lower for the 7th consecutive trading session down another 235 points currently trading at 2.8020 a pound continuing its bearish momentum as the entire precious metal sector in my opinion still looks to move lower in the coming weeks ahead. Anything associated with China, which is the largest consumer of copper in the world, continues to go lower as the Trump tariffs will be enacted come tomorrow. Prices topped out on the June 7th high at 3.3345 and now have dropped about 50 cents during that time span with the next major level support all the way down to 2.50. So, if you are short a futures contract stay short as there is room to run to the downside in my opinion. Prices have now hit a 1-year low and are still historically rather expensive as we are trading far under their 20 and 100-day moving average telling you that the trend is to the downside as the only bullish commodity is crude oil as everything else continues to melt away on a daily and weekly basis. The housing market in the U.S. is starting to cool as it was red-hot for quite some time. However, most of this is due to the Trump tariff situation as nobody wants to own the commodity markets with all of this uncertainty in place. I am certainly not recommending any bullish position at this time as I think that would be very dangerous.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

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 December contract settled last Friday in Chicago at 3.71 a bushel while currently trading at 3.67 continuing its bearish momentum as excellent weather conditions in the Midwestern part of the United States coupled with the Trump tariffs which took effect today continue to put pressure on this commodity. I live in the state of Illinois as the corn crop is about 6 feet tall at the current time and it looks to have excellent production numbers come harvest. We had record amounts of rain in June, and in July we have had significant rain already as the 7/10 day weather forecast remains ideal. Prices are trading far below their 20 and 100-day moving average as a trend clearly is to the downside as the downtrend line remains intact. However, we are starting to squeeze blood out of a turnip as we are experiencing oversold conditions. I'm not involved in this market as a lot of the commodities are experiencing a relief rally today on the old classic statement of "sell the rumor and buy the fact" as the Trump tariff situation has already been priced in as soybean prices are up $0.20 this afternoon. The main problem with these corn prices being so depressed is that it really does hurt the American farmer and unless some hot and dry weather comes about in July or August, there will be pressure on prices come harvest time. If you take a look at the daily chart, it looks to me that the 3.60 level is starting to build some support as the chart structure is beginning to improve as the volatility will remain high for the rest of the summer. I will keep a close eye on this market for a bottoming out pattern which could develop soon.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Cotton Futures

Cotton futures in the December contract settled last Friday in New York at 83.92 while currently trading at 82.34 down about 160 points for the week continuing its bearish momentum hitting a 7-week low. The Trump tariffs have been established today as there are reports that China is not buying U.S. cotton and instead buying from India. That is undoubtedly a fundamental bearish factor towards prices coupled with the fact that the crop in the United States is coming along nicely as we also had larger than expected planted acres despite the problems in West Texas. The agricultural markets, in general, continue to move lower as cotton is now following the grain market to the downside in my opinion as I think the next major level of support is around 80 as this market remains bearish in the short term. Tariffs are a terrible thing for commodity prices, and until the situation is resolved I think prices will remain under pressure as cotton is now trading below its 20-day but slightly above its 100-day moving average as the trend is mixed, but it's to the downside, and I'm not recommending any position at this time. Tariffs curb demand, and that is precisely what is happening to cotton as we had strong demand several months ago and when you have weak demand that means you have larger supplies, therefore, pushing prices lower so sit on the sidelines and avoid cotton.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Sugar Futures

Sugar futures in the September contract is currently trading at 11.47 a pound after settling last Friday in New York at 12.25 down about 75 points for the trading week and continuing with its bearish momentum looking to retest the April 25th contract low at 11.23. Many of the commodity markets traded lower again this week due to the Trump tariffs. However, there was a relief rally today as there is a lot of green on my trading screen as profit-taking has ensued. I think prices are getting relatively cheap and I will keep a close eye and wait for the chart structure to improve before entering into a bullish position. The chart structure at the current time is terrible as prices sold off hard this week as the large worldwide production of sugar continues to pressure prices and the fundamental picture remains bearish. Sugar prices are trading under their 20 and 100-day moving average and the trend is to the downside. If the contract low is broken, I think prices could head down to the 10.50 level, but I do think the downside is relatively limited at these depressed prices. If a favorable resolution comes about from the tariffs, you will see bullish trends across the board develop in my opinion. Coffee prices may have created a spike bottom today as we had a 500 point trading range trading lower than finishing higher as they are both grown in the country of Brazil & have been following one another on the daily basis which could be beneficial for sugar prices in the short-term.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Wheat Futures

Wheat futures in the September contract settled last Friday in Chicago at 5.01 a bushel while currently trading at 5.05 up slightly for the trading week and has been the strongest commodity out of the grain sector as prices are right near a 2-week high. If you take a look at the daily chart, there is major support at the 4.80 level which has been hit on about a dozen occasions only to rally every single time as I think wheat prices may have bottomed out in the short term. If you are long a futures contract place, the stop loss at the 10-day low around 4.79 as an exit strategy as the risk would be around $0.25 or $1,300 per contract plus slippage & commission, but at the current time, I'm sitting on the sidelines. There is a price gap which was created earlier this week between 4.95/4.96, and I think that will be filled. I don't like gaps, so I would be patient & see if that situation does occur. There are concerns in the northern Great Plains about hot and dry conditions over the next 7/10 days with below average rainfall as that's been the catalyst helping support wheat prices over the last several months and that's why this commodity has not collapsed like corn or soybeans. The fundamentals remain relatively strong at these depressed prices as the tariff situation with China does not affect wheat as much as it does soybeans as those two commodities can move in opposite directions. I think the downside in wheat is limited at this time as prices are trading right at their 20 and 100-day moving average forming a bottoming out pattern in my opinion.
TREND: MIXED - LOWER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Trading Theory

This 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 combined even more contracts which are all losing money your account will lose much more than 2%. In some cases 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 losses and move on to the next possible trade.