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 are trading below their 20 and 100 day moving average settling last week at 1,163 while currently trading at 1,160 down slightly and traded as low as 1,146 in Wednesdays trade hitting a three month low as I’ve been recommending a short position and if you took that trade place your stop loss above the 10 day high which currently stands at 1,188 risking around $28 or $1,000 per mini contract plus slippage and commission.

The chart structure will improve starting next week as the trend still remains bearish as I still see no reason why to own the precious metals as their looks to be agreement with Greece possibly over the weekend but all of the interest still lies in the S&P 500 in my opinion which is sharply higher this Friday afternoon. The U.S dollar is down 90 points today which generally is very bullish precious metals, however gold is unchanged this Friday afternoon as volatility remains low as platinum, copper, and palladium are all near contract lows which will pressure gold prices in the long run in my opinion so continue to play this to the downside while taking advantage of any price rally while maintaining the proper stop loss of 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Soybean Futures

Soybean futures in the November contract which is concerned the new crop which will be harvested this October settled last week in Chicago at 10.30 a bushel while settling around 10.22 slightly lower for the trading week but with extreme volatility as prices traded as low as 9.78 earlier in the week as the WASDE crop production number was 3.885 million bushels up 35 million from the last report.

The volatility in soybeans is extremely high at the current time as I’m not involved in this market as the risk/reward is not your favor as almost every day is a $.20/$.30 move but if this crop does come in at 3.885 million I would have to think come October prices would be much lower as soybeans are still expensive at 10 .30 a bushel. The chart structure in this market is terrible, however if you are bearish soybean prices my recommendation is to sell a futures contract at today’s price while placing your stop above the recent high of 10.40 risking 20 cents or 1,000 per contract plus slippage and commission. Weather will be the key issue in the next 6 weeks as the crop currently is behind by about 2 weeks as hot weather would be bearish at this time as this year so far has been cold and rainy and if you are a producer I would definitely start selling at these prices levels as oversupply issues and a possible recession in China could turn this market bearish quickly in my opinion.
TREND: HIGHER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the August contract are trading far below their 20 and 100 day moving average settling in New York last week at 56.93 a barrel while currently trading at 52.66 down about $7 for the trading week hitting a three month low as I’ve been recommending a short position for quite some time and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 59.70 as the chart structure will improve on a daily basis.

The next level of major support is at 49/51 as oversupply issues continue to hamper prices here in the short-term coupled with the fact of a possible Chinese slowdown affecting many commodities especially oil prices, however if you did not take the original trade the chart structure is terrible at the current time as the risk/reward is not your favor so sit on the sidelines and look for better markets with less risk. The U.S dollar is sharply lower this afternoon as a possible deal with Greece is on the table, however the dollar is still up significantly in the year 2015 and that’s keeping pressure on commodities as deflation is a worldwide problem so play by the rules and place the proper stop loss as who knows how prices can go.
TREND: LOWER
CHART STRUCTURE: POOR

Live Cattle Futures

Live cattle futures in the December contract are trading below their 20 but still above their 100 day moving average as I’ve been recommending a short position over the last several weeks when prices broke 153 & if you took the original trade place your stop loss at the 10 day high which has been lowered to 155.45 as prices are currently trading at 152.70 risking around 280 points or $1,100 per contract plus slippage and commission.

There were two reasons why I took this trade as the first was identifying a head & shoulders top at the 157 level with prices hitting a four week low with solid chart structure meeting my criteria to enter into a trade as the next major support is at 151.50 which was hit on three different occasions and if that level is broken I think the bear market is underway. Hog prices have been under pressure here in recent days and that is also helping push cattle prices lower as feeder cattle continues to move lower due to the fact that corn prices hit an 8 month high. The chart structure will not improve until next week so you will have to be patient & play by the rules as I still think lower prices are ahead as the risk/reward is in your favor at the current time.
TREND: LOWER
CHART STRUCTURE:SOLID

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

Sugar Futures

Sugar futures in the October contract are trading above their 20 day but still below their 100 day moving average telling you that the trend is mixed after settling last week in New York at 12.30 while currently trading at 12.12 slightly lower for the trading week as I’m currently sitting on the sidelines waiting for a trend to develop.

Sugar prices continue its long-term bearish trend while trading sideways in recent weeks as a breakout to the upside is 12.69 and on the downside below 11.52 so look at other markets that are currently trending as sugar prices look to go nowhere. Volatility in sugar prices at the current time is relatively low as I still do think lower prices are ahead but prices remain choppy so keep a close eye on this market as oversupply issues continue to pressure sugar coupled with an extremely weak Brazilian Real versus the U.S dollar as there are very few fundamental bullish reasons to push prices up at the current time.
TREND: MIXED
CHART STRUCTURE: SOLID

Corn Futures

Corn futures in the December contract are up 7 cents this Friday afternoon in Chicago currently trading at 4.47 a bushel trading far above its 20 and 100 day moving average continuing its bullish trend due to the fact that the USDA crop report lowered carryover levels and lowered production by 100 million bushels from the June report to 13.530 billion bushels. Corn futures settled last Thursday at 4.37 while currently trading at 4.46 this week hitting a 1 year high as traders are still very concerned about lower production due to wet weather as generally speaking poor crops become worse throughout the season and excellent crops become better throughout the year as it certainly looks like this year is not going to be an excellent crop.

I’m certainly recommending producers to be hedging up at the 4.50 level as we have now have rallied $.85 and I think the easy money has been made as generally the month of July is the peak in the grain market so take advantage of this as the weather could still improve during the critical pollination stage which were about to enter. Soybean prices are up about 8 cents as that report was not bullish but traders don’t believe the report therefore they are fading it pushing prices higher as the next crop report in August will certainly will tell the story of acres planted and what the production number is as there’s so much uncertainty at the current time. I have been sitting on the side-lines in the corn market as I have missed this trade to the upside as the chart structure and the risk/ reward were not in my favor and that happens sometimes as I’m disappointed but sometimes you will miss trades due to improper risk.
TREND: HIGHER
CHART STRUCTURE: POOR

Lean Hog Futures

Lean hog futures in the December contract settled last week in Chicago at 63.80 while currently trading at 59.55 down over 400 points re testing recent lows as I’ve been recommending a short position for the last six weeks when prices broke 69.00 and if you took that trade place your stop loss above 64.32 as the chart structure will improve next week lowering monetary risk. Hog prices are trading far below their 20 and 100 day moving average with the possibility of demand peeking at the Fourth of July holiday as I still see lower prices ahead due to massive expansion as there are a lot of hogs presently.

The next level of support is 59.00 and if that level is broken I think you could trade down to 55.00 in the coming weeks as oversupply issues are really starting to put pressure on this market as well as many of the other commodity markets that all seem to have the same fundamentals so continue to place your stop loss at the proper level while trying to let your winners run as that’s the key to success trying to capture 75% of the trend. Cattle prices are also down 100 points this Friday afternoon in Chicago putting pressure on hog prices as well as the meat sector certainly looks like they have topped out in my opinion as I’m also recommending a short position in December cattle.
TREND: LOWER
CHART STRUCTURE: POOR

Coffee Futures

Coffee futures in the December contract settled last week in New York at 131.15 while currently trading at 129.80 a pound slightly lower for the trading week still trading below its 20 and 100 day moving average telling you that the short-term trend is to the downside and the long-term trend is also to the downside as I’m now recommending a short position while placing your stop loss above the 10 day high which currently stands 137.40 risking around 800 points or $3,000 per contract plus slippage and commission as this trade should only be taken with a large trading account.

Coffee prices continue their slow grinding bearish trend with very little volatility as the fundamentals have improved with Brazilian coffee exports rising to a record in the crop year ending June 30th up 6.9% to 36.5 million bags but that has been unable to support prices as we continue to move lower because of oversupply. The chart structure will start to improve in the next couple of days lowering monetary risk as many of the commodity markets still look weak as anything grown in Brazil continue to be under pressure due to the fact that the Brazilian Real is still right near a historical low versus the U.S dollar.
TREND: LOWER
CHART STRUCTURE: SOLID

Cotton Futures

Cotton futures in the December contract are trading above their 20 and 100 day moving average telling you that the short-term trend is to the upside settling last week at 67.39 while currently trading at 66.55 down slightly for the trading week still remaining in an extremely choppy trend over the last six months.

Traders are waiting the WASDE crop report this afternoon with estimates of 14.37 million bales slightly lower than last month as this report should send high volatility into this market as volatility has been relatively high in recent weeks due to the fact that the Chinese stock market has been falling out of bed raising the possibility of a Chinese recession which definitely would hurt world economies as China is the largest importer of cotton in the world as the commodity markets in my opinion still look week. At the current time I’m sitting on the sidelines in this market as I’ve not traded cotton in over six months as the trend has been extremely choppy and difficult to trade successfully in my opinion so wait for better chart structure and a true breakout to occur so look at other markets that are beginning to trend.
TREND: HIGHER
CHART STRUCTURE: POOR

Trading Theory

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
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Twitter–@seeryfutures
Phone #: (800) 615-7649
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