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 1,134 an ounce while currently trading at 1,122 down about $12 this week trading below its 20 and 100 day moving average near a 2 week low as I’m currently sitting on the sidelines as this market remains choppy with poor chart structure. The monthly unemployment report number was released this morning in the United States adding 173,000 new jobs which was below consensus having very little impact on gold prices today as 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. 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.
TREND: MIXED
CHART STRUCTURE: POOR

Crude Oil Futures

Crude oil futures in the October contract have experienced a wild and crazy trading week hovering right near a 4 week high after settling last Friday in New York at 45.22 a barrel while currently trading at 46.20 and traded as high as 49.33 in Monday’s trade as I was recommending a short position for three months getting stopped out around the $44 level last Friday as I’m currently sitting on the sidelines. This market has been absolutely crazy with high volatility 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.
TREND: MIXED
CHART STRUCTURE: POOR

Live Cattle Futures

Live cattle futures in the December contract settled last Friday in Chicago at 146.05 while currently trading at 142.70 as I’ve been recommending a short position from 146 and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 146.72 as the trend remains bearish in my opinion. Cattle prices are trading far below their 20 and 100 day moving average telling you that the short-term trend is to the downside as prices are near a 6 month low testing recent support and a double bottom around 142 and if that level is broken I think an all-out bear market is underway as cattle prices are still too high compared to the rest of the commodity markets. The fundamentals in cattle are starting to turn bearish as Canada is entering a recession as they are a large importer of U.S beef which should slow down demand as these are still very high historical prices as the chart structure is very solid at the current time so take advantage of any price rally while maintaining the proper risk parameter of 2% of your account balance as I do think prices will break 140 next week.
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

Corn Futures

Corn futures in the December contract are trading below their 20 and 100 day moving average telling you that the trend is to the downside as I’ve been recommending a short position over the last several weeks and if you took the original trade continue to place your stop loss above the 10 day high which stands at 3.87 as that will also be lowered in next Wednesday’s trade to 3.80 as I remain bearish. Corn prices settled last Friday in Chicago at 3.75 while currently trading at 3.61 down about $.14 for the week looking to retest the contract low of 3.57 in the next couple of days as traders are awaiting the USDA crop report which will be released on September 11th with production estimates between 13.5 billion/13.7 billion bushels as that will certainly send high volatility into this market. The chart structure will start to improve so take advantage of any price rally while maintaining the proper stop loss risking 2% of your account balance as prices have hit a 1 year low as I still think come harvest time which is right around the corner prices could trade between 3.00—3.25 a bushel as the grain market still remains very bearish in my opinion as I’m currently recommending a short position across the board.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Cocoa Futures

Cocoa futures in the December contract settled in New York last Friday at 3112 while currently hitting a four week high up 50 points this Friday afternoon trading at 3155 as I was recommending a short position over the last two months getting stopped out in today’s trade as now I’m sitting on the sidelines and possibly entering into a bullish position as the chart structure is outstanding. This trade has been extremely frustrating as it twisted us in the wind for the last several weeks but that’s the way it goes sometimes, but now I’m looking at possibly buying as the 10 day low in Tuesdays trade will be 3050 but at the current time be patient as we will not be trading until Tuesday due to the Labor Day holiday in the United States. Cocoa prices are now trading above their 20 and 100 day moving average telling you that the trend is to the upside as dryness in Ghana and certain parts of the Ivory Coast is pushing prices up here in the short-term so keep a close eye on this as we could be entering a bullish position in Tuesday’s trade as the risk at this point is a little over $1,000 per contract plus slippage and commission.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Coffee Futures

Coffee futures in the December contract settled last Friday in New York at 124 while currently trading at 120.70 a pound trading below its 20 and 100 day moving average hitting a contract low in Thursday’s trade, however I have been sitting on the sidelines in this market as the risk/reward is not your favor as the 10 day high is too far away so keep a close eye on this market as we could be entering a short position very soon. As I’ve talked about in many previous blogs coffee prices could trade as low as 100, however the market has remained choppy over the last several months so I have been unable to capture lower prices, but the real problem is the fact that the Brazilian Real continues to hit historical lows against the U.S dollar which makes it very difficult to rally at this time especially with ample worldwide supplies. At the current time I’m certainly not recommending any type of bullish position and I’m telling producers that I think lower prices are ahead so be patient as the downtrend should continue in my opinion as we might be in a short position in the next couple of days when the chart structure tightens up.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Soybean Futures

Soybean futures in the November contract settled last Friday in Chicago at 8.85 a bushel while currently trading at 8.67 down about $.18 this week hitting a five-year low as I’ve been recommending a short position and if you took the original trade continue to place your stop loss above the 10 day high which currently stands at 8.89 risking around $.22 per contract or $1,100 plus slippage and commission from today’s price level. Soybean prices are trading far below their 20 and 100 day moving average telling you that the short-term trend is to the downside as traders are awaiting the September 11th USDA crop report with estimates between 3.7/3.9 billion bushels with carryover levels between 475 million/500 million which historically is extremely high as we are awash with soybeans worldwide. The problem with soybeans at this juncture is the fact that Brazil is possibly going to produce 100MMT which would be another record crop continuing to keep a lid on prices so continue to take advantage of any price rally as the chart structure is outstanding at the current time as I still see lower prices ahead. The next major level of support is around the 8.60 level and if that is broken I think we can trade down to the $8 level as harvest is right around the corner which will bring massive supplies onto the market.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Trading Theory

When Do You Add To Your Winning Trade?

This has always been a very interesting question because it can create a situation of going from rags to riches or from riches to rags in a very short amount of time. Many times I see traders abuse pyramiding or adding to positions with utter lack of any type of money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse. Commodity prices can move very quickly with large gains or loses like we experienced in the 2008 crash of stock and commodity prices, so you always have to use stops and not fall in love or marry a position. In my opinion the answer to this question is add only once to the trade if that position has made you at least 2%-3% of your account balance while still having stop losses on all positions that equal 2% loss at a maximum risk. Remember your stop loses will be different on both positions because of the fact that you entered those trades at a different date and price.

Sugar Futures

Sugar futures in the October contract hit a 5 week today settling last Friday in New York at 10.97 while currently trading at 11.40 now trading above its 20 day but still below its 100 day moving average telling you that the short-term trend is mixed at the present time. I was recommending a short position for quite some time getting stopped out at the 2 week high which was around 10.95 about two weeks ago as I’m now sitting on the sidelines, but I’m not recommending a short position at this time as there is the possibility that prices will fill the gap around 11.90 on the daily chart but I will wait for the risk/reward to be in my favor as the bearish trend may have stalled in the short term. Sugar futures have rallied along with crude oil as sugar is used as a biodiesel, however the Brazilian Real still is right near historical lows against the U.S dollar so I do believe that this rally is limited to the upside but I’m a trend follower so there is no reason to be short at this time so keep an eye on this market and be patient.
TREND: MIXED
CHART STRUCTURE: POOR

Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 4.84 a bushel while currently trading at 4.66 down $.18 for the trading week as I’ve been recommending a short position and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 5.16 as wheat prices have hit a five-year low. The chart structure will start to improve in Wednesday’s trade as the 10 day high will be lowered to 5.04 as traders await the USDA crop report which comes on September 11th , as a strong U.S dollar continues to hamper prices coupled with the fact of ample supplies so continue to play this to the downside in my opinion. At the current time I’m short the entire grain market as I think lower prices are ahead despite the fact that many commodities have rebounded from recent lows but harvest is just several weeks away in corn and soybeans which will continue to pressure wheat and oat prices to the downside. When the chart structure tightens up I’m advising clients to add to this position as knows how low prices can actually go as the trend is your friend and this trend continues to get stronger on a weekly basis.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

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 63.00 while currently trading at 62.75 in a very nonvolatile trading week. Traders are awaiting the September 11th USDA crop report which will send high volatility back into this market as the last report sent prices up nearly 350 points as a 10% reduction in production in the United States sent the shorts scrambling including me , but we will see if this report reconfirms that production number. 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. Cotton prices are currently trading at the bottom end of their six-month trading range and traded as high as 69 which was the upper end of the trading range after the last report was released as there is very little fundamental news to dictate short-term price action until the crop report is released.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Oat Futures

Oat futures in the December contract settled last Friday in Chicago at 2.28 a bushel while currently trading at 2.23 as I’ve been recommending a short position as the chart structure is outstanding at the current time while placing your stop loss above the 10 day high which currently stands at 2.31 risking 8 cents or $400 from today’s price level plus slippage and commission. If you have been following any of my previous blogs you understand that the risk/reward and chart structure are the 2 main criteria before entering into a trade and at the current time it meets criteria. Oat futures are still trading below their 20 and 100 day moving average as I’m currently recommending a short position in corn, soybeans, and wheat as the grain market still remains weak in my opinion. Oat prices sometimes follow wheat prices and the wheat market continues to hit contract lows and a 5 year low as you would have to think that will start to pressure oat prices here in the short-term as the risk/reward is in your favor in my opinion as traders are anticipating the USDA crop report on September 11th.
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
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Phone #: (800) 615-7649
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