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 December contract settled last Friday in New York at 1,121 an ounce while currently trading at 1,106 down about $15 this week trading below its 20 and 100 day moving average near a 3 week low as I’m currently sitting on the sidelines as this market remains choppy with poor chart structure. I still see no reason to own gold currently as the risk/reward is not your favor so look at other markets that are starting to trend such as the silver market which I am currently recommending a short position because the chart structure is outstanding. Gold prices had a significant rally in the month of August bottoming out around 1,080 then rallying to 1,170 which was impressive in my opinion due to short covering and a flight to quality as the stock market has experienced volatility in recent weeks sending money out of stocks and into gold as a safe haven but things have settled down putting short-term pressure on gold. As I’ve talked about in many previous blogs I am a trend follower and I do not like to trade choppy markets because they are extremely difficult in my opinion so avoid this market at the current time and focus on silver.
TREND: LOWER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the October contract settled last Friday in New York at 46.05 a barrel while currently trading at 45.20 as this market has been highly volatile as I probably will not be trading crude oil for quite some time as the chart structure is terrible so look at other markets that are beginning to trend with less risk. Prices are currently trading above their 20 day moving average for the first time in months but still below their 100 day average as the trend remains mixed. Crude oil prices have been following the stock market as when the S&P 500 is sharply lower you can rest assured crude oil prices will be lower and vice versa as everything comes to and as we were short this market from $59 as the trend was our friend for three months before turning on a dime, as this is why you must have an exit strategy as mine is placing a stop at the 10 day high if I am short as never getting out is very dangerous in my opinion. Goldman Sachs cut demand for crude oil sending prices lower this Friday afternoon as experts are calling for lower prices and the possibly of breaking $30 a barrel due to massive oversupply but I will wait for a trend to develop.
TREND: MIXED
CHART STRUCTURE: POOR

Silver Futures

Silver futures in the December contract are trading lower by about $.30 this Friday afternoon in New York currently trading at 14.33 an ounce as I’ve been recommending a short position from around 14.70 and if you took that trade place your stop loss above the 10 day high which currently stands at 14.95 as you’re going to have to be patient as that stop loss will not be lower for quite some time. The next major level of support is at the contract low around the $14 mark and I do think that’s a possibility that could be retested in next week’s trade as the chart structure is still very solid at the current time. Silver prices settled last Friday at 14.55 while currently at 14.33 down over $.20 for the trading week as prices have been consolidating the recent downdraft in prices over the last three weeks, but the long-term and short-term trend still remain bearish in my opinion, so continue to play this to the downside while taking advantage of any price rally while maintaining the proper risk management strategy. Silver futures are trading below their 20 and 100 day moving average closing at 3 week low in today’s trade as the commodity markets still looks bearish in my opinion.
TREND: LOWER
CHART STRUCTURE: SOLID

Live Cattle Futures

Live cattle futures in the December contract settled last Friday in Chicago at 142.77 while currently trading at 143.15 going out on a sour note this Friday afternoon currently down 150 points as I’ve been recommending a short position from 146 and if you took that trade continue to place your stop loss at 146.72 as I remain bearish. Prices are trading below their 20 and 100 day moving average telling you that the downtrend is still intact despite the fact that in Wednesdays trade we rallied limit up which was 300 points only to come back down as the bearish short-term trend continues as the next level of major support is at the double bottom around 142 which could be tested in the next week’s trade. The volatility in cattle at the current time is relatively high so if you do trade this market make sure you place the proper amount of contracts risking 2% of your account balance and if 142 is broken I think the bearish trend could get ugly to the downside as cattle prices are still way too high historically speaking compared to the rest of the commodity markets, especially if Canada goes into recession which is the 2nd largest importer of U.S beef.
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

Dollar Index Futures

The dollar index futures in the September contract are trading below their 20 day but still above their 100 day average telling you that the trend is mixed and has remained choppy for the last two weeks as I’m currently sitting on the sidelines waiting for a breakout above 96.63 to occur before entering a bullish position. The dollar settled last Friday at 96.24 while currently trading at 95.50 as investors are awaiting the Federal Reserve’s interest rate decision which will come out next week and will certainly send high volatility into this market so keep a close eye on this trade as we could be involved in next week’s trade. I have not traded the currencies in quite some time but when I do see excellent chart structure coupled with a solid risk/reward situation I will trade the currency market but at this point the chart structure does not meet my criteria so sit on the sidelines and see what the Federal Reserve states, and in my opinion I think they will not raise interest rates at the current time as there is too much uncertainty especially in the stock market.
TREND: MIXED
CHART STRUCTURE: IMPROVING

Cocoa Futures

Cocoa futures in the December contract are trading above their 20 and 100 day moving average settling last Friday in New York at 3168 while currently trading at 3240 down about 20 points today, but traded higher 4 out of the last 5 trading sessions continuing its short-term uptrend. If you have been following my previous blogs you understand that I was short cocoa getting stopped out last Friday at the 10 day high, however I have missed this trade as I’m sitting on the sidelines as it looks to me that prices can retest the contract high at 3377 as dryness in Ghana and in the Ivory Coast are causing concerns pushing prices higher in the short-term. As a trader you must have an exit strategy and mine was at the 2 week high which was around 3150 last Friday as prices have gone exponentially higher but I’ve missed the boat as the risk/reward is not in your favor at the current time as the chart structure remains poor, however the situation could change in the next couple of days so keep a close eye on cocoa especially if they trade lower therefore lowering monetary risk.
TREND: HIGHER
CHART STRUCTURE: POOR

Coffee Futures

Coffee futures in the December contract are trading below their 20 and 100 day moving average hitting a multi-year low while settling in New York last Friday at 119.15 a pound while currently trading at 117.50 down slightly for the week in low volatility. I’m currently sitting on the sidelines kicking myself as we should be entering a short position but the 10 day high is too far away and does not meet my risk/reward criteria, however I’m certainly not recommending any type of bullish position in this market as I do think prices could break 100 in the next month or so as ample supplies worldwide continue to keep a lid on prices. Many of the soft commodities including sugar and cocoa have rallied in recent weeks but has not help support coffee prices at all as this trend remains your friend and certainly the short-term trend is to the downside and if the chart structure does improve I will be recommending a short position which could happen in the next couple of days especially if a price rally occurs. I would imagine that volatility in coffee will start to increase as historically speaking coffee is one of the top five most volatile commodities in the world as this low volatility will not last.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Soybean Futures

Soybean futures in the November contract reacted violently to the USDA crop report this afternoon stating that the U.S produced 3.93 billion bushels averaging 47 bushels per acre which was above expectation sending prices to a new contract low at one point trading at 8.53 a bushel before rallying closing unchanged around 8.74 riding the coattails of corn which was sharply higher. Soybean futures are still trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside but corn surging $.13 help support soybean prices as I still recommend a short position as the 10 day high has been lowered to 8.86 risking around $.12 or $600 per contract from today’s price levels plus slippage and commission. I was stopped out of the corn market today in a very disappointing trade as we probably will not be in that market for some time, however the soybean stop has not been executed so continue to take advantage and stay short as 3.93 billion bushels is a huge crop and a record 83.5 million acres which will be harvested shortly. Estimates of Brazil’s planted acres are around 80 million which could produce 100MMT which would produce another record crop and in a couple years Brazil will be the largest soybean grower in the world due to the fact that they have seem to have endless land to plant on a yearly basis despite depressed prices.
TREND: LOWER
CHART STRUCTURE: Outstanding

Trading Theory

Where Should You Place Your Stops?

Identifying where stops exist in the market is an important lesson to learn because placing a correct stop loss that will improve your trading tremendously over the course of time. Nobody knows for sure where stops are located, however I have learned a couple of things over my 20 year career and I have a general idea where stops are placed and why. Buy stops are generally placed above the 10 day high as well as above contract highs as the bulls generally are buying more and the short selling are getting stopped out. Sell stops are usually placed at the 10 day low as well as below contract lows which means the shorts are adding to their position and the longs are getting stopped out as they figure they are wrong. The other common places to have stops are at certain moving averages such as the 20 or 100 day moving average where traders think either the trend is turning bullish or the market is starting to break down. Placing stops to close or not at important price levels can get very frustrating because the market can stop you out and then go the direction that you thought leaving you behind and out of the market. Placing stops is one of the most important aspects of trading in my opinion.

Sugar Futures

Sugar futures settled last Friday in New York at 11.27 a pound while currently trading at 11.50 up over 20 points for the trading week as I still think there’s a possibility that the price gap on the daily chart around 11.90 could be filled relatively soon, however I’m sitting on the sidelines waiting for better chart structure to develop. Sugar futures have rallied about 150 points from their low due to the fact that heavy rains in sugarcane areas across Brazil are slowing down harvest coupled with short covering over the last several weeks sending prices higher, however sugar is the only trading above its 20 day but below its 100 day moving average as I will wait for a better risk/reward situation to develop which could happen relatively soon. If you have been following my previous blogs I still have many short positions as I don’t think the downturn in the commodity markets is over but I’m currently not shorting sugar as the trend is higher and as a trend follower that would be breaking the rules so look at other markets that are beginning to trend at the current time
TREND: MIXED - HIGHER
CHART STRUCTURE: IMPROVING

Natural Gas Futures

Natural gas futures settled in New York at 2.65 last Friday afternoon while currently trading at 2.67 in a very nonvolatile trading week as prices are stuck in an incredibly tight three-week channel looking to breakout one direction and my feeling is to the downside and if prices break 2.63 I’m recommending a short position while placing your stop loss above the 10 day high at 2.73 risking $1,000 per contract plus slippage and commission. Natural gas futures are still trading below their 20 and 100 day moving average as this has been a bearish trend over the last several years due to oversupply issues here in the United States as we are a massive supplier and exporter of natural gas and I don’t think that situation is going to change, so keep a close eye on this market as a breakout is in the cards in my opinion. As a trader you have to look for special situations as my consolidation rule states that a consolidation must be 8 weeks or longer so this does not meet criteria, however the chart structure is outstanding therefore lowering monetary risk as I’m looking forward to getting into this trade either on the short side or possibly even on the long side as the risk/reward is your favor once the breakout occurs but you must be patient.
TREND: SIDEWAYS
CHART STRUCTURE: OUTSTANDING

Cotton Futures

Cotton futures in the December contract are trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside settling last Friday at 62.62 while currently trading at 63.30 in a very nonvolatile trading week despite today’s crop report. Traders reacted to the September USDA crop report which stated that the U.S will produce 13.43 million bales compared to the estimate of 13.78 construed slightly bullish, but they also increased carryover levels as the report was considered neutral. At the current time I’m sitting on the sidelines waiting for better chart structure to develop but I’m certainly not bullish this market as weak demand from China as their economy is collapsing right before our eyes as they hold 50% of the world’s reserves so they will continue to sell with major support at 61 – 62 so keep a close eye on this next report.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Oat Futures

TREND: LOWER
CHART STRUCTURE: OUTSTANDING

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
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