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.

Crude Oil Futures

Crude oil futures in the October contract settled last Friday in New York at 48.66 a barrel while currently trading at 47.80 down slightly for the trading week with low volatility despite the fact that Hurricane Harvey could do some severe damage in the state of Texas. Harvey has put tremendous volatility in the heating oil and unleaded gas futures. Oil prices are trading slightly below their 20 and 100-day moving average telling you that short-term trend is lower, but this trend is mixed to sideways with little movement over the last six weeks. I'm currently not involved, and I'm waiting for a breakout to occur which could happen in next weeks trade. I've seen hurricane situations before, and they do spike prices up in the beginning, but then they fade away very quickly. I don't think there will be much damage occurring from the situation, but we will see come Monday but in the meantime look at markets with a better risk/reward scenario as prices are still stuck in a consolidation between 47/50 over the last month or so as a breakout is coming soon. My only recommendation at the present time is a bullish copper position as there are very few strong trends.
TREND: LOWER - MIXED
CHART STRUCTURE: SOLID

Gold Futures

Gold futures in the December contract is currently trading at 1,295 an ounce after settling last Friday in New York at 1,291 up about $4 for the trading week while experiencing a wild trading day with a $20 range in today's session. Prices are still hovering around the critical $1,300 level. If you are long the futures contract, I would continue to place the stop loss under the 10-day low which stands at 1,272 and in 2 days that will be raised to 1,281 as the chart structure is outstanding. Prices are still trading above their 20 and 100-day moving average looking for some fresh fundamental news to push through that critical 1,307 double top level in my opinion. Silver prices are trading above $17 at the present time also near 6-week highs as the precious metals are bullish across the board as my only recommendation as my in the metals is a copper position to the upside which is hitting another yearly high in today's trade. Tensions with North Korea coupled with a terror attack in Spain continue to prop up prices as the U.S dollar is also down 40 points this Friday afternoon lending support to gold so continue to play this to the upside as clearly the trend remains higher as the risk/reward is in your favor.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Copper Futures

Copper futures in the December contract is hitting another fresh yearly high up 900 points this week currently trading at 3.0500 a pound continuing to be the strongest trend out of all of the commodity sectors in 2017. I have been recommending a bullish position from around the 2.71 level and if you took the trade place your stop loss at the 10-day low of 2.90. The chart structure will start to improve later next week, therefore, lowering the monetary risk. I still think we are headed toward 3.20/3.40 in the coming weeks as we are trading far above the 20 and 100-day moving average with the trend is getting stronger on a weekly basis as who knows how high prices can go. Yesterday a housing report was released showing that home sales were down about 9% which was way below estimates and that just shows you how strong this market is as it completely ignored that report while making new highs just one day later. I remain bullish, however, if you have missed this trade do not chase & move on and look at other markets that are beginning to trend.
TREND: HIGHER
CHART STRUCTURE: POOR

Live Cattle Futures

Live cattle futures in the October contract settled last Friday in Chicago at 105.90 while currently at 107.70 up about 180 points for the trading week as traders are awaiting the cattle on feed report which will be released after the close and certainly will send high volatility into Monday's trade. Prices are still trading below their 20 and 100-day moving average and I have a bearish bias to the downside & if you are short a futures contract place the stop loss above the 10-day high which stands at 109.70. The chart structure has turned outstanding at the present time, therefore, lowering the monetary risk, but it's all about what this report states. Hog prices hit another contract low and if you have read any of my previous blogs you understand that I have been bearish the livestock sector for quite some time and I think that will also start to put pressure on cattle prices. If the 105 level is broken which is major support & has been hit there on multiple occasions, I think we could head all the way down to the 100 area rather quickly as there are large supplies at the present time.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

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

Corn futures in the December contract settled last Friday in Chicago at 4.65 a bushel while currently trading at 3.55 down about $0.10 for the trading week & has now traded lower 7 out of the last nine trading days continuing its bearish momentum and I still think lower prices are ahead. If you have read any of my previous blogs, you understand that I am bearish the entire grain sector and I think corn prices in the new crop could hit 3.40 in the next couple of weeks with the harvest starting in about four weeks. We should produce at least 14.3 billion & I think it could go as high as 14.5 billion bushels as we have had outstanding weather in August with mild temperatures and above average rainfall. Corn prices are trading far below their 20 and 100-day moving average telling you that this trend is to the downside as this is the classic slow grinding bearish trend. I think this will continue all the way through harvest and I see no reason to own corn at the present time unless some type of shock comes out in the next USDA report which is still 3 weeks away. There is no bullish fundamental or technical news in this commodity so stay short.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Cotton Futures

Cotton futures in the December contract is down 64 points this Friday afternoon in New York currently trading at 69.20 breaking a 6-day winning streak. This is all due to concerns about Hurricane Harvey damaging the crops in the southern part of Texas with heavy rains & possible flooding occurring over this weekend. Prices are now trading above the 20-day but still below their 100-day moving average which stands at 70.12 which is just an eyelash away as the 66 level has held on multiple occasions. It looks to me that a firm bottom is in place. I'm not involved in this commodity as the chart structure is very poor. Therefore the monetary risk is too high as this market remains choppy and has remained choppy for several months. Look at other markets with a better risk/reward scenario at the present time. Hurricane season is upon us, and that will send volatility into orange juice, cotton, and the energy markets. Unleaded gasoline is up sharply in today's trade as well on concerns of a possible shutdown, but I've seen this scenario before and many times its bark is bigger than its bite, but we will see come Monday afternoon if there is any damage to the cotton crop.
TREND: MIXED
CHART STRUCTURE: POOR

Sugar Futures

Sugar futures in the October contract settled last Friday at 13.41 a pound while currently trading at 13.95 up about 50 points for the trading week and right near a three week high. I'm currently not involved in this market, but it looks to me that a possible double bottom has occurred around the 13.00 level. Harvest is in full swing in Brazil and production numbers are very high, and that has already been factored into the price so keep a close eye on this as we could be involved relatively soon. Sugar prices are trading above their 20-day but still below their 100-day moving average which stands at 14.89 which is quite a distance away as you remember several weeks back sugar prices broke the 15 level before the USDA crop report came out sending prices right near contract lows in last week's trade. The soft commodities have been relatively choppy with very few trends, and I don't have any recommendations at the present time as sugar prices can become very volatile and volatility at this time is relatively low. However, I do think higher prices are ahead I'm just waiting for a four week high coupled with the fact of low monetary risk before entering.
TREND: MIXED
CHART STRUCTURE: SOLID

Cocoa Futures

Cocoa futures in the December contract settled last Friday in New York at 1878 while currently trading at 1910 up about 30 points for the trading week trading higher for the 2nd consecutive session remaining in a choppy trend holding major support at the 1800 level. The chart structure is starting to improve as prices have gone nowhere over the last two weeks so avoid this commodity as it's been very choppy over the last several months with no trend in site. Cocoa prices are affected by the U.S. dollar but that has also been going sideways over the last month or so lending very little support. There is very little fresh fundamental news to dictate short-term price action at the present time. Prices are still trading under their 20 and 100-day moving average telling you that the short-term trend is lower, but this market has been sideways for several months trading between 1800/2100. We're starting to enter the demand season which could be beneficial to prices, but I don't see any real action at this time so be patient and keep an eye on this market as we could be involved in September to the upside.
TREND: LOWER - MIXED
CHART STRUCTURE: POOR

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.