Weekly Futures Recap With Mike Seery

Silver Futures

Silver futures in the March contract is currently trading at 17.23 an ounce in a tranquil Friday afternoon in New York as the holiday markets are upon us as that generally lowers the volatility. I'm keeping a close eye on a possible bullish position as silver prices have been stuck in a very tight 6-week consolidation. If prices break the December 4th high of 17.41, I will be recommending a bullish position as I think the commodity markets in 2020 will experience significant rallies to the upside.

At the current time, silver is trading right at its 20-day but still below its 100-day moving average, which stands around the 17.59 level as I think we will probably go sideways for the rest of this month. However, I do expect the volatility to increase substantially in January.

I do not have any precious metal recommendations, but I do believe that platinum and palladium are still bullish and will head higher. I think silver will join the party eventually, so keep a close eye on this market as we could be involved soon as the risk/reward is in your favor due to the excellent chart structure.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

S&P 500 Futures

The S&P 500 in the March contract is continuing its bullish momentum ending the week on a positive note up another 15 points at 3227 after settling last Friday in Chicago at 3175 up over 50 points for the week and hitting another all-time high. This gravy train continues, and I see absolutely no reason to be short this market.

I believe as long as President Trump remains in office this market will have a 10%/15% gain on a yearly basis as the U.S. economy is firing on all cylinders regardless what the current socialist European countries does as the United States is the only place to invest at the current time.

The S&P 500 is trading far above its 20 and 100-day moving average as this is the strongest trend at the current time. If you've been following any of my previous blogs, you understand that I thought that the 3200 level could be hit as we are far above that area. I still believe there is significant room to run to the upside as picking the top in this market is extremely dangerous as money flows continue to enter into U.S. equities. I don't think that the situation is going to end anytime soon despite the impeachment of the U.S. president.

Historically speaking, the month of January is also a very bullish month as retirement funds enter into the 1st week of January as I still see significant room to run to the upside, and if you're not involved, don't be short as that's a fool's game.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: LOW

Lean Hog Futures

Hog futures in the February contract settled last Friday in Chicago at 69.50 while currently trading at 71.05 up about 150 points for the trading week. I have been recommending a bullish position from around the 69.60 level, as I think prices have created a long-term bottom.

If you took the recommendation, place the stop loss under the August 5th low of 63.67 as an exit strategy as the chart structure will improve in next week's trade, therefore, lowering the monetary risk. The volatility has come back into this market, and that is no surprise because we have made major trade agreements with Canada, Mexico, China. We are looking forward to another trade agreement with the U.K. in the coming months ahead.

I see no reason to be short this commodity. Hog prices are trading above their 20-day moving average, but slightly below their 100-day as the volatility still remains very high. I think the entire agricultural sector will rally significantly in 2020 as I see no reason to be short as the risk/reward is to the upside, so stay long.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: VERY HIGH

Orange Juice Futures

Orange juice futures in the March contract settled last Friday in New York at 99.90 while currently trading at 104.00 up over 400 points for the trading week hitting a 7 week high. I have been recommending a bullish position from around the 103.30 level, and if you took that trade, continue to place the stop loss under the multi-year low which was hit on December 6th at 97.90 as an exit strategy as the risk/reward is highly in your favor in my opinion.

Juice prices have now traded higher for the 3rd consecutive session as prices look to test resistance at the 110 level. We are trading above the 20-day moving average for the 1st time in months, but right at its 100-day. I see no reason to be short the agricultural markets at this time as a trade agreement with China and many other countries is very bullish the agricultural sector, in my opinion.

The chart structure at the current time is outstanding as this market can explode in the month of January due to the fact that there could be a frost in the state of Florida so stay long as I have several recommendations to the upside out of the soft commodity sector.

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 March contract is currently trading at 3.87 a bushel after settling last Friday in Chicago at 3.80 up about 7 cents as prices are still near a 5-week high. However, the volatility is extremely low at the current time as we look to enter 2020.

I have been recommending a bullish position from the 3.87 level, and if you took that trade, continue to place the stop loss under the contract low standing at 3.65 as the chart structure will start to improve in next week's trade. Therefore, the monetary risk will also be lowered as I think the grain market across the board will rally next year from these depressed prices.

Corn is still trading above their 20 and right at their 100-day moving average as estimates of next year planted acres are around 94 million, which is about 3 million more than we planted in 2019. Still, demand has been the main problem with this commodity, and I think that the situation will improve now that we have multiple trade agreements that should spur demand.

Generally speaking, volatility during this time of year is really low & that's precisely what is occurring once again, but that will pick up as we enter spring planting, so play this to the upside as I think the downside is minimal. I am also advising farmers not to be selling their cash crop.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cotton Futures

Cotton futures in the March contract settled last Friday in New York at 66.80 while currently trading at 67.60 up about 80 points for the week as prices have now hit a 5 month high.

I have been recommending a bullish position from the 66.60 level, and if you took that trade continue to place the stop loss at the November 21st low of 63.70 as an exit strategy, however, the chart structure will improve in next week's trade. Therefore, monetary risk will also be reduced. Cotton prices are trading above their 20 and 100-day moving average as the trend is strong to the upside as the trade agreement with China certainly is very supportive of prices going ahead. I think we will test the contract high that was hit on July 1st at 69.07, possibly in next week's trade.

I also have bullish recommendations in orange juice and sugar out of the soft commodity sector. I am bullish most agricultural markets as we head into 2020, so stay long as the risk/reward remains in your favor as I see no reason to be short.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 13.50 a pound while currently trading at 13.58 up about 8 points for the trading week, continuing its bullish momentum to the upside. Volatility at the current time remains extraordinarily low as we continually grind higher weekly.

I would like to see that situation change as we head into 2020. I have been recommending 3 bullish trades with an average price of 12.79, and if you took those trades, continue to place the stop-loss under the 10-day low standing at 13.19. However, in Monday's trade, that will be raised to 13.22 as the chart structure is outstanding.

Fundamentally speaking, sugar prices have been strong over the past 2 months on the outlook for smaller global sugar supplies as the USDA in last Tuesday's WASDE report cut its U.S. 2019/20 sugar production estimate by -3.8% to 8.28 NMT from Nov's estimate of 8.61 MMT. Unica last Tuesday reported that Brazil's Center-South sugar production in the 2nd half of November tumbled -36.7% y/y to 337,000 MT. Sugar prices are trading above their 20 and 100-day moving average, telling you that the trend is to the upside, so stay long as I still think there's room to run.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Coffee Futures

Coffee futures experienced extremely high volatility this week after settling last Friday in New York at 130.90 a pound while currently trading at 128.70 up about 200 points for the week. However, that does not tell you the whole story as prices traded as high as 142.45 in Tuesday's trade as we already have dropped off about 10% from the contract high.

I'm sitting on the sidelines as I have several soft commodity recommendations to the upside. However, if you are long a futures contract, I would place the stop loss under the 2 week low standing at 123.20 as an exit strategy as margin requirements were raised, sending prices lower over the last several days.

If you are involved in this market, make sure that you risk only 2% of your account balance on any given trade. This sleeping giant certainly has woken up as we had multiple 1000 point trading ranges this week as that situation is going to continue for months ahead.

Fundamentally speaking, Safras & Mercado, last Thursday, cut its Brazil 2019 coffee production estimate by -3.1% to 57.05 mln bags from April's estimate of 58.9 mln bags. Safras also projects that Brazil's 2019/20 coffee ending stocks will plunge -26.8% y/y to 2.32 million bags and that Brazil 2019/20 coffee exports will fall -18.4% y/y to 34.4 million bags. The International Coffee Organization (ICO) is forecasting a global 2019/20 coffee deficit of -502,000 bags compared with a +3.7 million bag global surplus in 2018/19.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: VERY HIGH

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.

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

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: 630-408-3325
[email protected]

There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.