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.

Crude Oil Futures

Crude oil futures in the February contract settled last week in New York at 37.04 a barrel while currently trading at 33.33 down about $4 for the trading week hitting a 12 year low continuing its remarkable bearish trend. Oil prices have been very volatile as in Monday’s trade prices were sharply higher and then finished lower as there were concerns about Saudi Arabia and Iran causing crude oil prices to spike in early trade only to sell off sharply for the rest of the week as there seems to be no end in sight to where the bottom is. The problem with crude oil is China basically came out stating that their economy is definitely slowing down as that’s not only bearish crude oil or any commodities in general as there seems to be a worldwide slowdown occurring as even the stock market which has been incredibly resilient over the last several years is now starting to weaken dramatically. Oil prices are trading far below their 20 and 100 day moving average as I’m currently not involved in this market as I have missed this recent breakout so continue to look at other markets that are beginning to trend, however I am certainly not recommending any type of bullish position as I still think prices head lower.
TREND: LOWER
CHART STRUCTURE: IMPROVING

U.S. Dollar Futures

The U.S dollar in the March contract settled last Thursday at 98.75 while currently trading at 99.10 as I have been recommending a bullish position from around the 99.50 level as high volatility has entered this market and if you took that trade continue to place your stop loss below the 10 day low which stands at 97.93 as the chart structure will start to improve in next week’s trade. The dollar is still trading above its 20 and 100 day moving average telling you that the short-term trend is to the upside is prices hit a four week moving averages telling you that the short-term trend is higher as prices hit a 4 week high earlier in the trading week as the momentum continues to move higher in my opinion. If you been following any of my previous blogs you understand that I’m short many different commodities while bullish the U.S dollar as I hope that trend continues here in the short-term as volatility has entered the stock market plus the commodity markets so make sure you risk 2% of your account balance on any given trade as a risk parameter, as this high volatility is going to continue for some time as 2016 has come in as a lion.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Silver Futures

Silver futures in the March contract settled last Thursday in New York at $13.80 an ounce while currently trading at $14.02 as I’ve been recommending a short position for the last several weeks from around the $14.20 level and if you took the original trade continue to place your stop loss above the 10 day high of $14.40 as yesterday prices traded as high as 14.38 while then falling in Friday trade. Silver futures have been stuck in a trading range between $13.60 – $14.40 as a true breakout is coming as the chart structure is outstanding , therefore lowing monetary risk as prices are trading right at their 20 day but still below their 100 day moving average telling you that the short-term trend is mixed to the downside. Gold has supported silver in recent weeks as gold prices hit an 8 week high as there is nervousness around the globe due to the fact that Saudi Arabia and Iran are in a heated dispute and chaos in the Mideast coupled with a falling stock market have pushed prices higher in 2016; however I’m sitting on the sidelines in the gold market at the current time. If silver prices break $13.62 I will be looking at adding more positions to the downside as Chinas economy is slowing down which is bearish the precious metals.
TREND: LOWER - MIXED
CHART STRUCTURE: EXCELLENT

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

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.

Lean Hog Futures

Lean hog futures in the June contract settled last Thursday in Chicago at 78.00 while currently trading at 77.10 down slightly for the trading week near a 2 week low. I've been recommending a short position for the last several weeks from around the 76 level and if you took that trade continue to place your stop loss around 79.00 as I still remain bearish. Hog prices are trading slightly above their 20 and 100 day moving average as this has been in a bullish trend and as I've talked about in many previous blogs I was taking a countertrend trade which I don't often do as this trade has not worked out in the short-term, but the chart structure is solid at the current time so remain short. Cattle prices in the April contract settled last week at 138 while currently trading at 135 down about 300 points for the trading week as I think that rally has certainly stalled out especially if the rest of the commodity markets continue to head lower, so if you are a cattle producer I would certainly start to hedge at these price levels. I still believe that hog and cattle prices are too expensive compared to the rest of the markets as prices remain very volatile especially cattle.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

Cocoa Futures

Cocoa futures in the March contract settled last Thursday at 3235 while currently trading at 3002 down over 200 points for the trading week continuing its bearish momentum hitting a new contract low with as we have not seen these prices since May 2015. Prices are trading far below their 20 and 100 day moving average telling you that the short-term trend is to the downside as I have been recommending a short position from around the 3350 level and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 3235 as the chart structure is terrible at the present time due to the fact that prices have collapsed this week. The trend in many of the commodity markets in my opinion still remains weak is I’m still recommending many short positions in different sectors ,but remain short cocoa as I still think it’s too expensive compared to the rest of the commodity markets as demand should start to fall in the coming months. The chart structure will not improve for another week so you’re going to have to be patient with the risk parameter as prices traded as low as 2898 in Thursday’s trade only to rally on profit taking.
TREND: LOWER
CHART STRUCTURE: POOR

Coffee Futures

Coffee futures in the March contract settled last Thursday in New York at 126.70 a pound while currently trading at 119.15 down over 700 points for the trading week keeping up pace with the rest of the commodity markets to the downside and still look weak in my opinion. Coffee prices are trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside and if you have been following any of my previous blogs you understand that I’ve been sitting on the sidelines in this market, but I do believe coffee prices are in the midst of bottoming out as prices have gone nowhere over the last several months, as we enter the volatile months of January and February. At the current time I’m short many of the soft commodity markets including cotton, orange juice, and cocoa , but coffee prices remain extremely choppy as this could go on for quite some time as traders are looking at weather conditions down in Brazil which will give short-term price direction in my opinion. At the current time I truly believe you should avoid this market as prices have gone nowhere as I do not like to trade choppy markets as the success rate is very poor in my opinion , but keep an eye on this market as the sleeping giant is looming.
TREND: MIXED - LOWER
CHART STRUCTURE: IMPROVING

Orange Juice Futures

Orange juice futures in the March contract are trading below their 20 and 100 day moving average as I have been recommending a short position when prices broke 140 in yesterday’s trade and if you took that recommendation place your stop loss above the 10 day high which currently stands at 151.25 risking around $1,700 per contract plus slippage and commission. Orange juice prices have been very resilient in recent months as greening disease decimated the orange crop in the state of Florida continuing to push prices higher as prices traded as low as 110 in the month of October before peaking out in the month of November around 155. I think prices are too high as economies around the world are starting to deflate rather quickly. At the current time my only bullish position is long the U.S dollar as I’m short many short soft commodities and other sector plays at the current time as I think prices could drop dramatically. I’ve been recommending a short position in cocoa and take a look at what’s happened over the last several days so remain short and take advantage of any price rallies as the chart structure will start to improve dramatically over the next couple of days , as I’m possibly looking at adding more positions to the downside as lower prices are ahead in my opinion.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Sugar Futures

Sugar futures in the March contract settled last Thursday in New York at 15.24 a pound while currently trading at 14.82 down around 40 points for the trading week still remaining in a choppy to sideways trend. I had been recommending a short position getting stopped out in last week’s trade as I’m currently sitting on the sidelines as prices are consolidating at the present time. The next major support level is around 14.25 as we traded as low as 14.33 in Thursday’s trade as I’m keeping a close eye on this market for another possible short as the chart structure is improving on a daily basis , therefore lowering monetary risk. Sugar prices are trading right their 20 day still above their 100 day moving average telling you that the short-term trend is slightly to the upside, but avoid this market at present time and look at other trends that are beginning to develop such as cotton & the orange juice market.
TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING

Cotton Futures

Cotton futures in the March contract settled last Thursday in New York at 63.28 while currently trading at 61.86 down about 140 points for the trading week as I have been recommending a short position from around 62.50 and if you took that trade continue to place your stop loss above the 10 day high which currently stands at 64.50. Cotton prices are trading below their 20 and 100 day moving average telling you that the short-term trend is to the downside as prices have hit a 12 week low breaking the critical 61.50 level before rallying this Friday afternoon, as the chart structure will start to improve on a daily basis starting next week, therefore lowering monetary risk on a daily basis. Traders are awaiting the highly anticipated USDA crop report which arrives on Tuesday afternoon as expectations are mixed at the current time ,but rumors of next year’s planting acres being raised by around 13% from 2015 is putting pressure on prices here in the short-term as I see no reason to own cotton presently. This week China announced that their economy is slowing down which is bearish commodity prices as China holds about 50% of the world reserves, but we need a bearish crop report to continue this trend to the downside. I think prices will start to catch up to grain prices to the downside as corn and wheat prices continue to hover around their contract lows as the world is awash in commodities as its obvious to me that we are in a deflationary period of time.
TREND: LOWER
CHART STRUCTURE: IMPROVING

How Can You Use Moving Averages To Your Advantage?

How Can You Use Moving Averages To Your Advantage? A simple moving average is calculated by adding the closing price of a commodity such as crude oil for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying commodity, while long-term averages are slower to react. I generally follow the 20 and 100 day moving averages when commodity prices break below or above in my opinion that establishes a trend which in my opinion should always be followed as the saying goes the trend is your friend. If the 20 and 100 day have crossed to the downside and you have a long position that is telling you that you are trading against the trend which can be dangerous over the course of time. I generally like to buy a commodity or sell a commodity when the price has hit a 20 day high or low and the simple moving average also should have crossed at that point confirming or establishing that the trend is starting.

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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