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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 June contract are trading above their 20 & 100 day moving average telling you that trend has turned higher after settling last Friday at 1,303 going out today at 1,318 up $15 dollars for the trading week as money flowed out of stocks and into bonds and gold. I am neutral in the gold market currently so I’m not recommending any position as the trend is not strong as the chart structure in gold is poor as well which does not allow you to place tight stops minimizing your risk so wait for better chart pattern to develop before entering a new position. If your bullish gold prices look at bull call spreads possibly for the month of June or if you’re bearish look at a bear puts spreads for the month of June limiting your risk to what the premium costs.
TREND: HIGHER
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the May contract are trading below their 20 and 100 day moving average with very little volatility in the last several weeks settling last Friday at 19.95 and going out this week at 19.96 after trading as high as 20.40 in yesterday’s trade but unable to see any follow through as I do think silver prices are bottoming. If you read any of my previous blogs I continue to harp on the fact that if you’re a long-term investor I think silver prices are very cheap and if you look at the daily chart prices are unable to break $19 an ounce as this is been an excellent buying opportunity in the past so I’m recommending to get long the silver market as the commodity markets in general have been moving higher & silver will start to follow in my opinion. The chart structure in silver is outstanding allowing you to place a stop below $19 if that make you feel better but I would buy this market without placing any stops as I do think the longer-term horizon in silver prices is higher and will be back up to $30 range eventually. This market currently is a sleeping giant as volatility will come back it’s just a matter of time so keep a close eye on this market.
TREND: SIDEWAYS
CHART STRUCTURE: EXCELLENT

Crude Oil Futures

Crude oil futures are trading above their 20 and 100 day moving trading up over $3.00 for the trading week & closing higher 3 out of the last 4 trading sessions trading at 104.20 a barrel in the May contract right near 1 year highs as the chart looks bullish in my opinion when prices broke 102 a barrel which was the breakout to the upside placing my stop below the 10 day low which is around 99.00 risking around 300 points or $1,500 per contract if your trading the crude oil mini. The chart structure in crude oil is starting to improve as we enter the strong demand season as crude oil & unleaded gasoline as both headed higher in my opinion, however make sure that you do have a proper risk management system in place minimizing your risk in case the trend does change. Generally speaking when the stock market sells off that generally puts pressure on crude oil prices however this market has been resilient lately because of the Ukrainian situation.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Coffee Futures

Coffee futures in the May contract are trading above their 20 & are 6000 points above their 100 day moving average telling you that the trend is strong settling up 1700 points for the trading week despite today’s 500 point drop and I have been recommending a long position in coffee from 175 placing my stop at 166 as this has been a terrific trade, however the chart structure is terrible so if you took my recommendation please give me a call so I can tell you where to place the new stop but I do think prices are headed higher possibly up to the 2.50-2.70 level due to the fact of one of the worst droughts in Brazil’s history doubling coffee prices in the last 2 months so continue to buy dips in this market as the chart structure will start to improve in the next week or so.
TREND: HIGHER
CHART STRUCTURE: AWFUL

Sugar Futures

Sugar futures finished down about 50 points for the trading week in the May contract at 16.80 right at major support around 16.70 as this market has been choppy and I’ve been recommending to sit on the sidelines in the sugar market as there really is no trend at this point and wait for better chart structure to develop before entering. Many of the commodity markets are in strong trends however sugar has been choppy so avoid this market at this time and look for another commodity that is trending because choppiness makes it difficult to make money.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Soybean Futures

Soybean futures are trading above their 20 and 100 day moving average with excellent chart structure despite today’s 10 cent sell off finishing higher by 7 cents for the trading week closing around 12.15 in the November contract as this market has been grinding higher despite the fact of a 6% increase in planting this year versus 2013 which could produce a record crop of around 3.5 billion bushels which would send prices sharply lower come harvest time in October but it is a long growing season and I am a short-term trader who follows the trend which currently is higher. I have been bullish this market for 2 months and if you took my recommendation I would place my stop at the 10 day low of 11.82 as an exit strategy. The supply demand report was bullish in my opinion but the market reacted to the downside so we will see what next week brings. If you’re longer-term investor & like trading the options market my recommendation would be a 2 by 3 call ratio spread buying the 12.60 November soybeans calls: selling 3 of the 14.00 November soybeans calls as a spread as I believe this trade has a high probability of success with the risk reward situation in your favor tremendously so if you have any questions about option trade feel free to give me a call.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Cotton Futures

Cotton futures are trading below their 20 day but still remain above their 100 day moving average despite hitting 4 week lows this afternoon in New York finishing lower by 350 points this week breaking major support as the trend has turned bearish. I am currently neutral the cotton market so sit on the sidelines and wait for another trend to develop as the uptrend line has been broken in recent days so the tide has turned in the cotton market as I was a bull on this market for some time but now I am looking for a stronger trend in other markets to trade.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Orange Juice Futures

Orange juice futures are trading far above their 20 and 100 day moving average trading higher by 1100 points this week settling at 165 in the May contract as I was recommending a buy at 156 on the long side as this market continues to move higher due to the fact of poor crops in the United States and Brazil which could send prices into the 180-190 level in the next couple of weeks. If you did not take my original recommendation and want to get long this market wait for a dip in prices to get long as prices might be over extended in the short term but the trend is higher and I do think prices will continue to hit new highs in the short term as the trend is getting stronger to the upside.
TREND: HIGHER
CHART STRUCTURE: POOR

Corn Futures

Corn futures went out on a sour note in Chicago this afternoon finishing down $.06 breaking $5 a bushel closing around 4.99 finishing down about $.07 week after hitting new 7 month highs earlier in the week trading at 5.17 and possibly could have hit a spike high as that price came right after the supply demand figures were released and then sold off dramatically afterword’s and I have been long this market from 4.60 and you took that recommendation a couple of months ago place your stop below the 10 day low which is at 4.92 or $.07 away equaling $350 per contract as a possible top has been created in my opinion however, I’m not recommending any type of short position at all it just looks like a pause in the market. The weather here in the Midwest has improved as we are 50/60° on a daily basis which should improve planting here in the Midwest as there were concerns that we would have a delayed planting season due to cold and wet weather but at this time it looks like everything will be on schedule which is also putting pressure on prices currently. If you are not long this market sit on the sidelines and wait for another market as the trend has now become choppy as volatility in this market will increase tremendously in the next several months due to the fact that were headed into the critical growing season and we need an outstanding crop or higher prices are coming but if we do get 13.5 billion bushels come October you could see sharply lower prices so we will see some wild price swings in the next several months.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Bond Futures

The 5 year note rallied sharply this week in Chicago rallying over 1 full point which is a large move in the 5 year notes with a yield of 1.57% finishing higher 6 days in a row due to the fact that there is panic selling in the stock market therefore money is flowing into the bond market as a flight to safety. If you’ve been following any my previous blogs I have been extremely bearish the bond market as I do think interest rates are moving higher and I’m recommending a short position in futures contract as the federal government is starting to taper bond program and with higher commodity prices. The five-year note is trading above its 20 and 100 day moving average and if you have deep pockets I have stated many times before continue to sell the futures contract and as I think a bubble has been created in this market ever since the 2008 financial collapse the government has been purchasing bonds and on the fact that they are going to slow down and stop by September which tells me trouble is on the way to get short this market my opinion. I have been early on this trade as the trade has gone against me, however I still think in the long run interest rates will move higher you just need to be patient.
TREND: HIGHER
CHART STRUCTURE: SOLID

Cocoa Futures

Cocoa futures remain in a 10 week tight consolidation between 2900 – 3050 as the chart structure remains outstanding allowing you to place very tight stop losses minimizing monetary risk and I am recommending a long futures contract when prices break out above 3039 which is the contract high so be patient as prices remain in a sideways pattern. Cocoa futures traded higher by 10 points this Friday afternoon in New York and closed up 20 points for the trading week at 2980 and has tested the 2900 level in the last couple of months on 6 different occasions and unable to break that level so there is major support developing, however the trend is sideways and as a trader I must look for trends because that is where you make your money as sideways markets are choppy and choppiness is not what you’re looking for. If you look at orange juice and coffee prices which continue to move higher and I think that will also push cocoa prices to new highs as well so keep a close eye on this market because a breakout is coming soon in my opinion.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Live Cattle Futures

Live cattle futures in the June contract hit 4 week lows last Friday rallying around 100 points this week in the June contract going out this Friday afternoon in Chicago at 135.85 a pound so now you should sit on the sidelines and wait for a better trend to develop as this market has become choppy with no short term trend. Cattle futures are now trading below their 20 day but still above their 100 day moving average which tells you the trend is mixed so move on to another market and just keep an eye on this as choppiness is probably ahead. Prices are still near all-time highs and I don’t believe prices are going much lower as the supply/demand situation is in favor for the bulls and this should continue for some time in my opinion.
TREND: MIXED
CHART STRUCTURE: POOR

Feeder Cattle Futures

Feeder cattle futures are slightly higher this Friday afternoon in Chicago trading up 50 points at 180.15 in the May contract and finishing higher by 170 points for the trading week right near all-time highs again and I’m still recommending a long position in this market while placing your stop at the 10 day low at 176.35 risking about 380 points or $1,900 from today’s price level per contract. This market continues to defy gravity as the fundamentals support prices and I do think could support prices even at higher levels as the herds are the smallest in over 6 decades which is a staggering number considering the fact that the population much higher than it was 60 years ago. We are entering the strong demand season for beef which could also propel prices higher but eventually everything comes to an end that is why I keep my stop at the 10 day low and if stopped out I will reevaluate the situation and wait for another trend to develop. Corn prices have hit a 7 month high which is usually a negative influence on feeder cattle prices but this market has such strong fundamentals that higher corn prices don’t even effect prices at least here in the short term.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Mexican Peso Futures

The Mexican Peso was down 10 points this week trading at 7620 trading lower for the 2nd straight trading session as the selloff in the S&P 500 has put pressure on the Peso in the last couple of days. I have been recommending a long position from 7550 & if you still want to get long the Mexican Peso buy at today’s price of 7610 placing your stop below the 10 day low which currently stands at 7565 risking 45 points or $225 per contract. As a technical trader the only reason I want to buy this market is because the risk /reward is in your favor and whenever that situation occurs I believe you have to take the trade even if you have doubts. The Mexican Peso is a very trendy currency just like many of the commodities as it will start a trend and go in that direction for quite some time as I’ve had experience with this in the past, so take a chance on this currency making sure that you place a tight stop.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Rough Rice Futures

Rough Rice futures for the May contract finished down 13 cents for the trading week at 15.63 in the May contract trading above its 20 & 100 day moving average telling you that the trend is higher hitting a 4 week high last Friday and I’ve been recommending this trade buying the futures contract at today’s price while placing your stop loss below 15.47 risking around $300 per contract as every cent equals $20 profit or loss as the agricultural markets certainly have turned bullish so I would take advantage of the situation as it has excellent chart structure & make sure you place your stop loss minimizing your risk in case the trend reverses.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Double Bottom & Double Tops---This indicator is one of my favorite patterns that signals a trend reversal because its considered to be one of the most reliable and is commonly used by many technicians. These patterns are formed after a sustained trend and signal to chartists that the trend is about to reverse. The pattern is created when a price movement tests support or resistance levels twice and is unable to break through. This pattern is often used to signal intermediate and long-term trend reversals. Their also can be triple bottoms and triple tops which are in my opinion an excellent indicator that predicts bottoms and tops at a relatively high rate and if you look at some of the daily charts you will see some double and triple tops and bottoms. If you are using any indicator such as these make sure you place a stop loss to try and minimize your monetary loss because indicators do not work a 100 % percent of the time so you still need solid money management technique to cut loses.

What Does Risk Management Mean To You? I generally tell people that the reason people lose money in commodities is not due to the fact that they are bad at predicting where prices are headed, however they are bad when it comes to losing trades and refusing to take a loss which results for heavy monetary losses that are difficult to come back from. For example if a customer has $100,000 account in my opinion on any given trade he or she should risk 2% – 3% of the account value meaning if you are wrong the worst-case scenario is still a $97,000 remaining balance, however what I always see is traders risking ridiculous amounts of money and instead of the 3% stop loss will risk 20% to 30% on any given trade or even higher therefore if you are wrong on two or three trades that $100,000 dollar account could dwindle down to nothing very quickly and I’ve seen it many times throughout my career. What many traders forget to realize is they might have 4 or 5 commodity positions on and if you have too many contracts on all at the same time and all of those trades go against you which is very possible the losses can add up to be staggering so what I am suggesting to you is if you have $100,000 account risk between $2,000 – $3,000 per trade so if you lose on five straight trades the worst-case scenario is that your down $15,000 and still have an $85,000 balance which is very possible to still come back from and your still in the game.

If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

SEERY FUTURES ACCEPTS CANADIAN COMMODITY ACCOUNTS

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.

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: (800) 615-7649
mseery@seeryfutures.com

Comments

  1. Kurt T. Bachmann says:

    Thank you for discussing the crude oil market the last couple of weeks.

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