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 prices settled last Friday in New York at 1,271 an ounce while currently trading at 1,256 down about $15 for the trading week and topping out at the 1,300 level. The Federal Reserve announced that they raised interest rates a .25 point and plan on raising interest rates further down the road and this sent gold prices to a three-week low. I am not involved in any of the precious metals as they have been incredibly choppy in 2017 and the monetary risk and the risk/reward has not met my criteria as prices are now trading below their 20 and 100-day moving average. I'm advising clients to avoid this sector and gold at the present time. The commodity markets, in general, remain weak in my opinion except for a select few with the stock market continuing to move higher taking money flows out of the gold and moving them into the Dow Jones once again. I think that trend will continue despite the terrorist attacks happening on a weekly basis coupled with uncertainty worldwide. Prices seem to have one more leg lower to the downside with a possible retest of 1,215 in my opinion. Silver prices this week also went into the negative as those prices remain extremely choppy as well, but one day the trends will come back in the metals so keep a close eye on this market & wait for the chart structure to improve.
TREND: MIXED - LOWER
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the July contract settled last Friday in New York at 45.83 a barrel while currently trading at 44.65 down over $1 for the trading week testing lows we haven't seen since November 2016. I'm not involved in this market, but I do think lower prices are ahead for the entire energy sector. At present, my only energy recommendation is a short natural gas position as complex oversupply issues continue to put pressure on prices in the short-term. We are still trading far below the 20 and 100-day moving average, and that's telling you that the short-term trend is lower in natural gas. The next major level of support is all the way down at the 42 level as Rig counts in the United States continue to increase supply, so if you are short a futures contract stay short & place the proper stop loss as I think lower prices are ahead. Gasoline and heating oil are also at fresh contract lows putting pressure on crude oil, and there is nothing right or positive to say about this sector at present. Today's slight rally across the board is just a dead cat bounce in my opinion and is due to oversold conditions.
TREND: LOWER
CHART STRUCTURE: POOR

Natural Gas Futures

Natural gas futures in the July contract settled last Friday in New York at 3.03 while currently trading at 3.03 unchanged for the trading week despite Thursday's trade rallying 12 points due to a bullish inventory report. I recommended a short position from the 3.17 level and if you took that trade continue to place your stop loss above the 10-day high standing at 3.10 as the chart structure is outstanding. Natural gas prices are still trading under their 20 and 100-day moving average which tells you that the trend is lower as we retested 4-month lows in Wednesday's trade. Stay short as mild temperatures in the 7/10 day forecast for Midwestern part of the United States could put pressure back on this market as the energy sector looks very weak in my opinion. Natural gas prices are just an eyelash away from getting stopped out as this trade has experienced very low volatility since the entry point, but if we are stopped out we will move on and look at other markets that are beginning to trend as the trends are coming back in the commodity sectors which is a great thing to see, but stay short as who knows what Monday's price action will bring.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

If you are looking for a futures broker feel free to contact Michael Seery at 312-224-8140 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.

Dow Jones Industrial Futures

The Dow Jones in the September contract settled last Friday in Chicago at 21,207 while currently trading at 21,323 hitting another all-time high. I was initially recommending a bullish position in the June contract at 21,000 and if you took the trade now place the stop in the September contract at the 10-day low of 21,064 as the chart structure will also improve early next week, therefore, lowering the monetary risk. The Dow Jones continues to move higher despite the fact that the NASDAQ 100 dropped 80 points this week right at a four-week low as rotation out of the NASDAQ & into the Dow continues as this market remains bullish in my opinion as who knows how high prices can go. The Dow Jones is trading far above it's 20 and 100-day moving average telling you that the short-term trend is higher. Low-interest rates in the United States continue to prop prices higher with possible growth coming back for the 1st time in nearly a decade coupled with the fact of massive stimulus plans possibly taking effect later this year and continuing to support prices to the upside. Stay long as this trend is getting stronger on a weekly basis.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Sugar Futures

Sugar futures in the October contract are trading lower for the 6th consecutive trading session after settling last Friday in New York at 14.47 a pound while currently trading at 13.60 down nearly 80 points and continuing its bearish trend. I'm not sure anyone knows how low prices could go. The next significant level of support is around the February 2016 low of 12.45, and if that is broken it could retest the August 2015 lows around 10.00 that's how bearish this commodity is. This is due to overproduction and a very weak Brazilian Real which continues to put pressure on anything grown in Brazil. Sugar prices are trading far under their 20 and 100-day moving average and this trend is getting stronger on a weekly basis. I'm certainly not recommending any type of bullish position as that would be counter trend trading and trying to pick a bottom is very dangerous over the long haul. The soft commodities still look very weak as the agricultural sectors except for a couple continue to head lower so, if you do have a short futures position stay short & place the proper stop loss as you are on the right side of this trade.
TREND: LOWER
CHART STRUCTURE: SOLID

Cotton Futures

Cotton futures in the December contract are trading lower for the 6th consecutive trading session. I have recommended a short position around the 71.85 level and if you took that trade place the stop loss above the 10-day high which now stands at 73.19 as the chart structure is poor due to the collapsing price over the last week. The next major level of support is right at the 69 level, and if that is broken, I think we could head down to the 66 level very quickly. The 12.2 million acres planted in the southern part of the United States is just too many in my opinion coupled with the fact that China has massive reserves which they continue to sell onto the world market. The July contract has collapsed over the last several weeks dropping over 1300 points which is putting pressure on the December crop which is the new crop and currently being grown. Prices are trading far below their 20 and 100-day moving average and this trend still has room to run in my opinion. The chart structure will not improve for another five trading days, so you're going to have to accept the monetary risk at this time. I'm looking at adding more contracts on any type of price rally.
TREND: LOWER
CHART STRUCTURE: POOR

Cotton Futures

Coffee futures in the September contract settled last Friday in New York at 128.85 a pound while currently trading at 128.40 unchanged for the trading week and hitting a one-year low in Wednesday's trade as volatility is as low. I've never seen it in the nearly 25 years that I have traded and prices are stuck in a very tight 2-week consolidation. At present, I'm not involved in coffee, but I will not take a short position. I'm looking at a bullish position if prices break the four-week high of 135.70 as prices are still trading under their 20 and 100-day moving average. The trend is clearly to the downside in a very slow grinding methodical manner. The soft commodities still look very weak as sugar prices have also hit contract lows this week and my only recommendation is a short position in cotton, which has also fallen out of bed over the last several days. Keep a close eye on coffee as we could be involved soon as I can't imagine that this volatility will stay at these levels for much longer. The chart structure has become excellent because prices have had very little movement.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Trading Theory

There are different theories about how long does a meaningful consolidation have to last before you enter a trade? In my opinion, I always want to see a consolidation that lasts at least 8 or more weeks before I would consider entering.

The reason that I want a longer consolidation is to try and avoid a bunch of false breakouts such as a 10 or 15-day consolidations which happen all the time. I am trying to put the odds in my favor by trading the breakout of at least 8 weeks or more and the longer such as a 10 or 13 week consolidation, the better.

If you are looking for a futures broker feel free to contact Michael Seery at 312-224-8140 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 #: 312-224-8140
mseery@seeryfutures.com

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

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