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.

Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 4.82 a bushel while currently trading at 4.65 down about $0.17 for the trading week reacting to a very bearish USDA crop report which was released yesterday sending prices down $0.20. Ending wheat stocks were stated at 933 million bushels, but expectations were around 901. That coupled with the excellent growing conditions pushed wheat prices to lows that we haven't seen since June 12th. There is major support around the 4.50/4.60 level as we traded in that area for several months before rallying on fears of drought in the Dakotas and the state of Montana. I have been looking at a bullish position in this market, but I will avoid the grains for now as they still look like they are headed lower in my opinion. Wheat prices are trading under their 20 and 100-day moving average telling you that the trend is to the downside as the chart structure is poor, so look at other markets with a better risk/reward scenario.
TREND:LOWER
CHART STRUCTURE: POOR

Corn Futures

Corn futures are currently trading at 3.71 after settling last Friday in Chicago at 3.81 a bushel down about $0.10. Corn also reacted to a very negative USDA crop report with estimates of 169.5 bushels per acre which could produce around 14.2 billion bushels which was much higher than expected as ideal weather conditions persist in the Midwestern part of the United States. Final production numbers could be raised down the road. Corn prices hit a contract low in yesterday's trade and now are trading under their 20 and 100-day moving average telling you that the trend is lower. I have not been involved in corn or any of the grains for months, and I'm still going to avoid this commodity as the risk/reward is not in your favor coupled with poor chart structure. I'm advising clients to avoid the grains at the present time. Weather conditions are very mild here in the Midwestern part of the United States as the 7/10 day forecast has no problems on the horizon. I see very little activity in this commodity for weeks to come as corn has been incredibly choppy in 2017 and I still believe prices are limited to the downside and the upside.
TREND: LOWER
CHART STRUCTURE: POOR

Soybean Futures

Soybean futures in the November contract settled last Friday in Chicago at 9.56 a bushel while currently trading at 9.43 down about $0.13 for the trading week and finishing over $0.30 lower in yesterday's trade. In part due to the USDA announcing that the United States is producing 49.4 bushels per acre which could produce nearly 4.4 billion bushels which is another outstanding crop surprising estimates. I am not involved in soybeans, and I'm advising clients to avoid this commodity as the chart structure is very poor. I do think there's a possibility we will retest the $9 level as prices are trading under their 20 and 100-day moving average telling you that the trend in the soybean market is lower as well as the soybean meal market. We are experiencing outstanding weather conditions in the state of Illinois with very mild temperatures forecast for the next 7/10 days with adequate rain. I think the 4.4 billion production number could even be raised in next month's USDA crop report as there is nothing bullish about the grain market and soybeans in particular at this time.
TREND: LOWER
CHART STRUCTURE: POOR

Coffee Futures

Coffee prices in the September contract settled last Friday in New York at 140.15 a pound while currently trading at 140.50 unchanged for the week. I have been recommending a bullish position from the 132 level, and if you took that trade, the 10-day stop has now been raised to today's low of 136.85. The chart structure is outstanding at the present time. Many of the soft commodities sold off in yesterday's trade, and I was stopped out of the cocoa and sugar earlier in the week. However, coffee has been rather strong and hung in there as prices are still trading above their 20 and 100-day moving average telling you that the trend remains to the upside so continue to place the proper stop loss. The U.S. dollars has hit a 14 month low, and I'm also recommending a short position in that commodity. The low U.S. Dollar is helping support coffee prices here in the short term as harvest is in full swing in Brazil and should be finished in the next couple of weeks which is a positive fundamental aspect in my opinion.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the October contract have now traded lower for the 9th consecutive trading session. I've been recommending a bullish position with the combined average price of around 14.25 getting stopped out earlier in the week around the 13.72 level as this market has completely fallen out of bed & is now trading at 13.20 after settling last Friday in New York at 14.14. That is why you must have an exit strategy because apparently, this trend has turned to the downside. I'm not involved in sugar, but it looks to me that prices might retest the contract low that was hit on June 28th at 12.74 as the soft commodities drifted lower this week except for the coffee market despite the fact that the U.S. Dollar is at a 14 month low. Sugar prices are now trading under their 20 & 100-day moving average telling you that the short-term trend is lower. However, I will not take a short position as I do think the downside is limited and I still have a bullish bias across the board in the commodity sectors, so I will keep a close eye on this market as the chart structure remains very solid, therefore volatility remains low.
TREND: LOWER
CHART STRUCTURE: SOLID

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.

Copper Futures

Copper futures in the September contract settled last Friday in New York at 2.8850 a pound while currently trading at 2.9120 up nearly 300 points for the trading week. I have been recommending a bullish position for several weeks from around the 2.71 level and if you took the trade place the stop loss which has been raised to 2.86. The chart structure will not improve for another three trading sessions, so you are you going to have to accept the monetary risk at this time. Copper prices are trading above their 20 and 100-day moving average telling you that the trend is to the upside as the chart structure is outstanding for such a large contract. However, for the bullish momentum to continue, we are going to have to break the August 9th high of 2.9550. Copper has been riding the coattails of the stock market which had a hiccup this week due to major tensions between the United States and North Korea selling off many different sectors across the board. There are many bullish factors as to why copper prices continue to move higher including the housing market which is very strong. Couple that with high demand for physical copper, I still think prices can break the 300 level, and if that happens we could be off to the races to the upside as long as the stock market can stabilize. So stay long & continue to place the proper stop loss.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

U.S. Dollar Futures

The U.S. Dollar in the September contract settled last Friday in New York at 93.41 while currently trading at 93.04 down about 37 points for the trading week. I have been recommending a bearish position from around the 93.40 level if you took the trade the chart structure is outstanding so continue to place the stop loss above the 10-day high at 93.77. This trend is clearly to the downside. I am looking at adding more contracts on any price rally in next week's trade because the risk/reward is in your favor and if repercussions do occur between North Korea and the United States, the dollar will fall rather dramatically. The next major level of support is the May 2nd, 2016 low of 91.88 and if that level is broken, I think we could head to the 90 level rather quickly as there is room to run the downside with very little support. That's how far the dollar had rallied in 2016 so continue to play the downside as I remain bearish. The U.S. Dollar is trading far below it's 20 and 100-day moving average telling you that the trend remains to the downside as the currencies are an extremely trendy commodity and they can last for long periods of time just like what is occurring in 2017 so stay short.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Live Cattle Futures

Live cattle futures in the October contract settled last Friday in Chicago at 114.10 while currently trading at 108.00 down about 600 points for the trading week. I have written about in previous blogs that I was looking to sell this market several days ago. However, I was unable to get executed, and I'm currently sitting on the sidelines kicking myself, and I still think there is room to run to the downside. The major break out was at the 111 level as the chart structure did not meet my criteria to enter into a short position. I was waiting for some type of price rally to enter, but it never occurred, and I will keep a close eye on this market and look to sell on any significant rally. I still think 105 is in the cards and if that is broken I think we can head down to the 100 level in the coming weeks ahead as overproduction is continuing to put pressure on this market. The livestock sector was the biggest bullish trend for the first six months of 2017. However, that has come to an end so keep a close eye on this market for a possible short in next week's trade as cattle futures are trading under their 20 and 100-day moving average telling you that the trend is to the downside despite today's 140 point rally which I think is due just to oversold conditions. I'm hoping this market can get back up to the 110 level to enter into a new short position.
TREND: LOWER
CHART STRUCTURE: POOR

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 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 contracts.

2 thoughts on “Weekly Futures Recap With Mike Seery

  1. Like the SGG Sugar ETN for price appreciation through the months of Sept/Oct. I am not in on it yet (as of Aug 14th) but will be shortly-just looking for the lowest buy range possible to limit my Downside risk as much as possible. The Reward to Risk Ratio, in my opinion, is probably 3 to 1 to the upside as long you buy at or near the current price of $28.36.

    I am looking to buy 300 shares of SGG and sell the Nov $34 Covered Call. I believe the upside could go near $36 at the 200 day EMA but just to be safe I am going with selling the $34 Call instead.
    The best 2 months for Seasonality to be profitable in SGG are the months of September and October, which on average produce a 2-month gain of 7.4%, with September being the best month of the year for SGG at an average return of 5.5%.

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