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.

Silver Futures

Silver futures in the May contract settled last Friday in New York at 16.46 an ounce while currently trading at 16.60 up about 14 cents for the trading week experiencing some rather high volatility which is good to see as we are still stuck in a five week consolidation chart pattern. I will be recommending a bullish position if silver breaks 17.03 which is about $0.40 away as we could be involved in next week's trade as the chart structure is excellent at the current time as I am still bullish, but I have no recommendations in the precious metals presently. Silver prices are still trading under their 20 and 100 day moving average as this trend remains mixed to lower in my opinion as this has been very choppy over the last six months as I do think we are in a longer-term bottoming out pattern as historically speaking I think silver prices are very cheap. The U.S dollar is still hovering at a three year low as that market currently is in a sideways pattern as the U.S dollar is lending very little support to silver prices. However, demand will start to come back into this market. The U.S. monthly unemployment number showed that 800,000 people came back into the workforce as that is a good thing towards commodity prices & will spur demand so keep a close eye on this market as we could be involved in next week's trade as the risk/reward would be in your favor in my opinion.
TREND: LOWER - MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

10-Year Note Futures

The 10-year note in the June contract settled last Friday in Chicago at 120/06 while currently trading at 120/02 unchanged for the week after reacting negatively to the incredible U.S. jobs report. That report was released Friday morning adding 313,000 jobs, but the real shocking number was 806,000 people went back into the workforce which was the highest number in 35 years. Hourly earnings rose 2.6% as that is an inflationary indicator and if these type of numbers continue which are remarkable in my opinion, you're going to see interest rates rise rather precipitously over the rest of the year. I remain very bearish & if your a longer-term investor I would be short this market. I was stopped out of the futures position last Friday, and I will be looking at getting back into the short side as the chart structure is outstanding because the volatility is very low so keep a close eye on another possible bearish position in next week's trade. The current yield on the 10-year note is 2.90%, and I still think we're headed for 3.50% come Christmas time as this was one of the best monthly unemployment numbers in recent memory. The U.S. economy is a well-oiled machine at this time & looks to progress even more in the coming years ahead with less regulation and tax cuts continuing to spur growth which is a terrific thing to see.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Natural Gas Futures

Natural gas futures in the April contract ended the week up three points currently trading at 2.73 this afternoon hitting a four week high earlier in the trading session only to sell off slightly on profit-taking. I have been recommending four mini contracts with an average price around 2.70, and if you took that trade, the stop loss has now been raised to 2.63 as the chart structure is outstanding due incredibly low volatility as we enter the spring and summer months here in the United States. Natural gas prices are trading above their 20-day but still slightly below their 100-day moving average stands at 2.79 which was touched earlier in the trading session so stay long & continue to place the proper stop loss as I still think we could retest the 3.00 level in the coming weeks ahead. The natural gas inventory was released this morning as it was slightly bullish but had very little impact on today's trade as I still think prices remain cheap as that was the main reason why I took this counter-trend trade because that I thought the downside was limited.
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 May contract finished up 5 cents at 3.90 hitting price levels that we haven't seen since August of 2017 reacting positively off of the USDA crop report showing lower global supplies as this market remains bullish in my opinion. I have recommended several bullish positions originally in the March contract around the 3.58 level and if you took those trades place the stop loss at the 10-day low which now stands at 3.76 as the chart structure will improve in next weeks trade, therefore, lowering the monetary risk. The next major level of resistance is at the $4 level which could be tested in tomorrow's trade. The volatility in corn is starting to increase slightly. However, spring planting is about five weeks away & certainly will see volatility expand to the upside in my opinion. We will have to see what the official U.S. planted acres will be as there is a wide range of estimates. I still think there is the possibility that we will have a weather problem such as drought which we have not experienced since 2012 that could send prices dramatically higher. Corn futures are trading above their 20 and 100-day moving average telling you that the trend is higher as we continue to grind slowly to the upside on a weekly basis as demand has come back into this market so stay long and continue to place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Soybean Futures

Soybean futures in the May contract are trading lower for the 4th consecutive session down $0.12 this Friday at a 10.52 a bushel after settling last Friday in Chicago at 10.71 down about $0.20 for the week reacting negatively to the USDA crop report which that released Thursday. Soybean prices topped out around the 10.80 level in last week's trade as the ending stocks are at 555 million bushels which, historically speaking, is huge. Which means we have massive worldwide supplies which were raised another 25 million as the recent rally from the January 12th low around 9.55 has all been due to the drought in Argentina ss that soybean crop production was cut but that has already been reflected in the price. If you are long a futures contract place the stop loss under the two week low which is just an eyelash away at 10.43 as we will now focus on the 2018 crop year in the United States. Soybean prices are still trading above their 20 and 100-day moving average as the trend is higher, but it looks to me that prices have topped out as I'm currently not involved in soybeans. My only recommendation in the grain market is a bullish corn trade which hit a fresh multi-month high in yesterday's trade as they reduced carryover levels for that commodity. The volatility in soybeans is relatively high as that will certainly expand as the spring and summer months are the most volatile season for prices as I think the short-term top is in place and I think we will chop around in the coming weeks ahead until the next crop report is released.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

Coffee Futures

Coffee futures in the May contract are unchanged at 120.25 a pound as prices have traded in a 600 point trading range for nearly three straight weeks as the volatility is as low as I can ever remember. We continue to hover around the contract low looking for some fresh fundamental news to push prices higher in my opinion. I'm looking for a bullish position if prices crack the 126.50 level as the chart structure is outstanding. I will not take a short position as I think the downside is very limited. However, my only soft commodity recommendation at the current time is a bullish cocoa position which continues to move higher on a daily basis. Coffee prices are still trading under their 20 and 100-day moving average as the trend remains bearish. A large crop coming out of the largest producer of coffee in the world which is Brazil continues to put pressure on prices here in the short term and fundamentally speaking there is nothing bullish about this commodity at the current time, but things can change very quickly. The U.S. dollar is still trading at a three year low, and I think eventually that will start to support prices so keep a close eye on this market as we could be involved soon as I think the volatility will have to expand to the upside it's just a matter of time.
TREND: LOWER - MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cotton Futures

Cotton futures in the May contract settled last Friday in New York at 82.09 while currently trading at 85.34 up over 300 points for the trading week hitting a 3 1/2 year high continuing its bullish run to the upside. Cotton prices reacted positively off of the USDA crop report which was released Thursday stating that the ending stocks were 5.5 million bales 500,000 lower-than-expected. The fundamental picture for this commodity remains strong coupled with strong worldwide demand for this fiber which continues to push prices higher. As I have written about previously, I was looking to buy at the 81 level, but that was not executed, and I'm sitting on the sidelines. But if you are long a futures contract stay long as I think we could trade up to the 90 level in the coming weeks ahead with spring planting right around the corner in the southern part of the United States. Cotton futures are trading far above their 20 and 100-day moving average as this trend is clearly higher. My only soft commodity recommendation currently is a bullish position in the cocoa market which continues to surge higher on a daily basis. I'm certainly not recommending any short position in cotton as that would be counter-trend trading, and I still see higher prices ahead. The U.S. dollar is still at a three year low as that market remains extremely choppy to sideways, but even if prices stay stagnant, that will still be supportive the agricultural market and especially cotton.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Cocoa Futures

Cocoa futures in the May contract are trading higher for the 7th consecutive session up another 34 points at 2527 after settling last Friday in New York at 2313 up over 200 points for the trading week continuing its strong bullish momentum. I have been recommending a bullish position from the 1990 level & if you took the trade, the stop loss has now been raised to 2179. However, that will not improve for another three trading sessions so you will have to accept the monetary risk as the volatility certainly has expanded as cocoa historically speaking can have huge price swings on a daily basis with tremendous risk. If you have missed this trade move on & look at other markets that are beginning to trend as there are several on the horizon as the risk/reward is not your favor as I do not like to chase markets. The next major level of resistance is at 2600/2700 & if that is broken I think we can hit the 3000 level possibly in the next couple of weeks as you have to remember the higher a commodity goes the more volatile it becomes as it wouldn't surprise me to see a 100 or 200 point day as conditions in West Africa are still remaining hot & dry which is concerning traders at this time. Cocoa prices are trading far above their 20 and 100-day moving average as this is the strongest trend out of the commodity markets in 2018 so stay long continue to place the proper stop loss as predicting a top is impossible as who knows how high prices can go.
TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Trading Theory

Never answer a margin call because you are probably over trading and most likely the position is going against you and probably have lost much more than 2% on that trade.

Never allow this to happen to you because you always want to have sufficient margin in your trading account just in case the exchange raises margin, and that will not force you out of the position.

A great rule is to keep 50% of your total portfolio in cash and the other 50% in trades that way if something crazy happens and it sometimes does, this helps in managing risk in a huge way.