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 1,095 an ounce currently trading at 1,095 as this market has been incredibly nonvolatile at the current time as prices have gone nowhere over the last three weeks as I’ve been recommending a short position from 1,170 & if you took that trade place your stop loss above the 10 day high which currently stands at 1,103 risking around $8 dollars or $250 per mini contract plus slippage and commission as the chart structure is outstanding. I have been trading the commodity markets for a longtime and I can’t remember gold trading in such a nonvolatile manner as prices continually go nowhere which is putting me to sleep as I’m getting frustrated in this market because as a trader you want to look at markets that are moving but the risk/reward is in your favor so I will just keep the proper stop loss and if you are stopped out move on and look at other markets. Gold futures are still trading below their 20 and 100 day moving average telling you that the trend is to the downside as a strong U.S dollar continues to keep a lid on the precious metal prices and I think that’s going to continue in 2015, however the stock market has hit a six month low and I think that’s starting to support prices as gold has had a very difficult time breaking 1,080 which is been hit on a half-dozen occasions only to rally as prices remain in a very tight consolidation but continue to remain short.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

S&P 500 Futures

The S&P 500 reacted negatively toward the monthly unemployment report and is trading lower for the 2nd consecutive trading session down another 14 points this afternoon in Chicago trading at 2064 in the September contract as I recommended a short position in Thursday trade while placing your stop loss above the 10 day high at 2110 now risking 44 points or $ 2,200 per mini contract plus slippage and commission as the chart structure is very tight at the current time. If you have been following my previous blogs you understand I like to sell breakouts as this has not broken out to the downside, however the Dow Jones industrial has hit a six month low and has broken out so I chose the S&P 500 so take a shot as the commodity and stock markets around the world look vulnerable to another leg down. If you take this trade my recommendation is to place your stop above the 10 day high, however you can also place the stop above the all-time high which is 2127 which might be a better place if your account balance can withstand that loss in case we are wrong but it seems hard to believe with commodity prices plunging on a daily basis that the stock market can retain these lofty levels in my opinion as I've been recommending short positions in many of the commodity markets for several months as I think there are problems developing that we don't know just yet.
TREND: LOWER
CHART STRUCTURE: SOLID

Crude Oil Futures

Crude oil futures in the September contract settled last Friday in New York at 47.12 a barrel while currently trading at 44.10 trading lower for the 3rd consecutive trading session as I’ve been recommending a short position over the last 8 weeks and if you took that trade place your stop loss above the 10 day high which currently stands at 49.52 as the trend seems to be getting stronger to the downside. Crude oil futures are trading far below their 20 and 100 day moving average telling you that the trend is sharply lower as the chart structure will not improve until later next week as it certainly looks to me that oil prices will retest $40 a barrel as a strong U.S dollar continues to put pressure on oil and many of the commodity markets. Remember as a trader you must trade with the path of least resistance and the oil market is clearly to the downside as picking bottoms and picking tops is extremely difficult to do successfully over the course of time. Traders reacted to Friday mornings monthly unemployment report showing around 215,000 new jobs created as it certainly looks like an interest rate hike could be eminent in the month of September which is also very bearish the commodity markets in general so continue to play this to the downside, however if you did not take the original trade you have missed the boat as I don’t like to chase markets so look at other markets that are beginning to trend.
TREND: LOWER
CHART STRUCTURE: SOLID

Corn Futures

Corn futures in the December contract settled last Friday in Chicago at 3.81 while currently trading at 3.83 a bushel in a very nonvolatile trading week as traders are awaiting next Wednesdays critical USDA crop report will estimates around 13.332 billion bushels with ending stocks around 1.450 billion bushels as that report will certainly send high volatility into this market. I’ve been sitting on the sidelines in corn over the last several months as the chart structure is terrible as prices are still trading below their 20 and 100 day moving average telling you that the trend is to the downside as there is a gap on a daily chart around $4.00 which could possibly be filled on that report as there are wide disparities between crop estimates due to the fact that of a very wet spring. Many of the commodity markets continue to move lower due to the fact of a strong U.S dollar as I’ve been recommending short positions in many different sectors including soybeans as I still think corn prices are probably headed lower come harvest time unless there’s some type of surprise in next week’s report as the chart structure and the risk/reward is not in favor so I’m going to be a spectator in this market for several weeks to come.
TREND: LOWER
CHART STRUCTURE:POOR

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 settled in New York last Friday at 11.14 while currently trading at 10.65 a pound as I’ve been recommending a short position from around 11.50 and if you took that trade continue to place your stop loss above the 10 day high which now stands at 11.64 as the chart structure will start to improve later next week. Sugar futures are trading far below their 20 and 100 day moving average as the trend seems to be getting stronger on a weekly basis trading lower for the 2nd consecutive trading session as I think there is a possibility that sugar will crack 10.00 in next week’s trade as crude oil prices continue to plunge therefore pressuring sugar so continue to play this to the downside in my opinion as the risk/reward is still in your favor. Many of the commodity markets were higher today including several soft commodities as the U.S dollar reversed earlier gains as many markets were probably oversold but to predict day to day action is extremely difficult as I would rather follow the path of least resistance which is to the downside as I’m strictly a trend follower so continue to take advantage of any rallies as I still think lower prices are ahead as supply issues continue to keep a lid on prices and unless lower production happens in 2016 I think prices grind much lower over the course of time.
TREND: LOWER
CHART STRUCTURE: SOLID

Cocoa Futures

Cocoa futures in the September contract settled last Friday at 3209 while currently trading at 3044 down for the 6th consecutive trading session as I’ve been recommending a short position from around 3250 as I do believe cocoa prices are headed lower hitting an 11 week low in today’s trade. If you took the original recommendation place your stop loss above the 10 day high which currently stands at 3240 so you’re going to have to be patient as the chart structure will not improve until late next week as a possible gap on the daily chart around 2800 could be filled in the next several days as the U.S dollar is trading at its highest level since April putting pressure on many commodities here in recent days. I’ve been recommending a short position in coffee, sugar, and cocoa as the soft commodities are overpriced in my opinion but stick to the rules as who knows how low prices could actually go as prices are in oversold territory as it would not surprise me see some type of kickback but the trend is your friend and I do think lower prices are ahead. Cocoa futures are now trading below their 20 and 100 day moving average for the first time in nearly 5 months telling you that the trend is getting stronger on a weekly basis, however the chart structure is poor at the current time so do not add any more positions right now as waiting for tighter chart structure is the prudent way to go.
TREND: LOWER
CHART STRUCTURE: SOLID

Coffee Futures

Coffee futures in the September contract settled last Friday at 125.25 while currently trading at 128 a pound up around 300 points for the trading week now trading above its 20 day but still below its 100 day moving average as I’ve been recommending a short position getting stopped out breaking even on this recommendation as this trade fizzled out at the very end. I’m currently recommending to sit on the sidelines in the coffee market at this time as I’m a little disappointed getting stopped out, however we must move on and look at other markets that are beginning to trend as I’m still recommending a short position in sugar, cocoa, and cotton at the current time but keep a close eye on coffee as the trend can still remain bearish in the next couple of days as the chart structure still remains extremely tight so I’m not giving up on this trade but when prices hit a 10 day high it’s time to move on. Many of the commodity markets were higher this afternoon as the U.S dollar reversed earlier gains but we are not seeing any real strength in the coffee market at the current time as the long-term down trend line is still intact but I’m a short-term trader which means I look for a four week high and four week lows as an entry point as you must be nimble and flexible and not always have a biased opinion as prices can change on a dime.
TREND: MIXED
CHART STRUCTURE: SOLID

Cotton Futures

Cotton futures in the December contract settled last Friday at 64.21 while currently trading at 61.75 trading lower for the 4th consecutive trading session and lower by around 250 points for the trading week hitting a 6 month low as I’ve been recommending a short position from around 64.00 and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 65.00 risking about 340 points from today’s price levels or $1,750 risk per contract plus slippage and commission as the chart structure is poor at the current time. I have not traded cotton in the year 2015 until just a couple of days ago as this trade has met my criteria with excellent chart structure while hitting a four week low as I do think the next level of support is at 61.50 and if that’s broken I think you could trade as low as 55.00 due to the fact of massive worldwide supplies. Remember the fact that China holds about 50% of world supplies as that country is looking to head into a recession which means that China probably will not be importing thus lowering demand coupled with the fact of an excellent crop developing in the southern part of the United States as there is very little bullish news to prop up prices in the short term except for possible short covering so remain short.
TREND: LOWER
CHART STRUCTURE: POOR

Soybean Futures

Soybean futures in the November contract are sharply higher this Friday afternoon in Chicago hitting a 2 week high up $.18 at 9.62 a bushel as I’ve been recommending a short position from the $10 level getting stopped out in today’s trade as my rule states when you’re short a commodity and prices hit a two week high it’s time to move on as hot and dry weather is forecast in the next 7/10 day forecast pushing prices higher this Friday afternoon. Traders are awaiting next Wednesday’s critical and I do mean critical USDA crop report as estimates are ranging from 3.50 billion bushels to 3.75 billion bushels yielding between 40/45 bushels an acre as nobody really knows due to the fact of an extremely cold and wet spring possibly reducing acres planted so now I’m sitting on the sidelines waiting for another trend to develop. Soybean prices are trading below their 20 day but above their 100 day moving average as this report is highly anticipated in my opinion and will send this market up or down $.50 so be patient look & at other markets that are currently trending as short covering moved this market higher in my opinion. Today I was stopped out of many different markets including coffee, cattle, and soybeans and that’s what happens eventually as this was still profitable but I will be a spectator as I’m still very interested to see what this report says as we may be involved in this market come next week.
TREND: MIXED
CHART STRUCTURE: POOR

Trading Theory

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.

here are many different theories about how long does a meaningful consolidation have to last before you enter a trade on the breakout? 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, so 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. The S&P 500 just broke out of a long channel.