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 July contract settled last Friday in New York at 49.07 while currently trading at 47.15 a barrel down about $2 for the trading week all based on Great Britain leaving the EU, therefore, sending oil prices lower. Crude oil prices are trading below their 20 but still above their 100-day moving average telling you that the short-term trend is mixed as prices are hovering right near a 6 week low as I don’t like to trade choppy markets. At the current time, I’m sitting on the sidelines waiting for better chart structure to develop as I just don’t know where prices are headed so look at other markets that have stronger trends like the soft commodities. Last week rig counts actually increased for the first time in several months because of the fact that crude oil hit $50, so production is coming back online as that is the problem with this market as the higher prices go, the more production occurs sending prices lower. I think we will remain choppy until the Brexit situation is resolved which is still over a week away. Keep a close eye on this market as we could be entering a short position, but the 10 day high is too far away. Therefore, the monetary risk does not meet my criteria, however if you take 4/5 days off the calendar something could be developing.
CHART STRUCTURE: POOR
Gold futures in the August contract settled last Friday in New York at 1,276 an ounce while currently trading at 1,292 up about $16 for the trading week in a highly volatile session in Thursday’s trade on massive volume all due to the speculation about the Brexit situation. Gold prices traded as high as 1,318 yesterday on rumors that Great Britain might leave the EU & then sold off tremendously on rumors that it might not happen as this is a real seesaw developing and will continue until the vote happens later next week. Gold prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher. However, I’m sitting on the sidelines as the 10 day low it’s too far away, therefore, the monetary risk is not acceptable at this time. Currently, I’m recommending a bullish position in silver while keeping a close eye on any type of price dip in the gold market. I still think higher prices are ahead because of the fact that interest rates around the world are going negative, so there is nowhere to park your money as the precious metals look attractive once again just like they did about 5 years ago when gold traded around $1,900 an ounce.
CHART STRUCTURE: POOR
Silver futures in the September contract settled last Friday in New York at 17.38 while currently trading at 17.50 an ounce in an extremely volatile trade all due to the Brexit situation which is sending high volatility back into this market as I’ve been recommending a long position from around 17.35 and if you took that trade place your stop loss above the 10 day low which currently stands at 16.30 as the chart structure has tightened up. Silver prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher hitting a six-week high. The commodity markets in general in my opinion are continuing their bullish momentum and are going higher as an asset class as there’s nowhere else to go except for equities & commodities so continue to buy this market. At the current time, silver is my only recommendation in the precious metals, but I do think gold prices are also going higher I’m just waiting for a down day to enter into a position, therefore, lowering monetary risk. I do not think Brexit will not actually happen, but it doesn’t matter in my opinion as I still think the commodity markets are the place to park money at the current time as the trend is your friend and these trends are getting stronger on a weekly basis. In my opinion, so stay long & place the proper stop loss.
CHART STRUCTURE: IMPROVING
Sugar futures in the October contract continues its bullish momentum up another 14 points at 19.90 as I was originally recommending a bullish position in the July contract initially recommending the bullish position around the 16.00 level as now we must move on due to delivery and if you took that trade continue to place your stop loss under the 10 day low which stands at 18.40 as the chart structure is starting to improve on a daily basis. Sugar prices are trading above their 20 and far above their 100-day moving average hitting a 3 year high with the next major level of resistance around the 24 level believe it or not. I still think there is much more room to run to the upside due to production cuts and huge demand so continue to play this to the upside. Sugar prices settled in New York last Friday at 19.73 a pound while currently trading at 19.90 up about 17 points as volatility is relatively high especially in last Thursdays trade as this Brexit situation is sending many of the commodities on a huge roller coaster ride, but the trend clearly in sugar is higher. I’m certainly not recommending any type of short position as that will be countertrend trading which is extremely dangerous in my opinion.
CHART STRUCTURE: IMPROVING
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.
Oat futures in the September contract settled last Friday in Chicago at 2.13 while currently trading at 2.15 a bushel as I have been recommending a bullish position from the 2.08 level and if you took that trade continue to place your stop loss at the 10 day low which stands at 2.01 however that will be raised in Monday’s trade to 2.06 as the chart structure is improving on a daily basis. Oat prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher as most of the commodity markets are experiencing wild volatility but the oat market has gone nowhere over the last 5 days, but this market can become extremely volatile in the summer months. At the current time, this is my only recommendation in the grain market as the risk/reward is highly in your favor in my opinion as I still see higher prices are ahead so be patient and place the proper stop loss.
CHART STRUCTURE: EXCELLENT
Cocoa futures in the September contract settled last Friday in New York at 3099 while currently trading at 3067 experiencing incredible volatility in Thursday’s trade dropping about 150 points in just a couple of minutes trading as low as 2927, however it still closed above the 10 day high which remains at 2993 so I’m still in this position by the skin of my teeth. The chart structure will improve in Monday’s trade raising up to 3050 as prices are still trading above their 20 and 100-day moving average as cocoa is priced in British Pounds. The Brexit situation made traders extremely nervous as prices dropped instantly and then came back so keep on your seatbelt as who knows where cocoa prices are headed but I remain bullish. The soft commodities continue to move higher across the board today as the trend is your friend in the commodity markets so continue to place the proper stop loss. I have been recommending a bullish position from around the 3115 level as the risk in Monday’s trade will be about $700 per contract plus slippage and commission.
CHART STRUCTURE: IMPROVING
Cotton futures in the December contract settled last Friday in New York at 65.07 while currently trading at 65.90 hitting a fresh contract high up about 80 points for the trading week. I’ve been recommending a bullish position from the 64.75 level, and if you took that trade, the chart structure has tightened up and stands currently at 63.28 as I remain bullish. Prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher as I’m long many different commodity markets at the current time as I think these bullish trends will continue I just would like to see this Brexit nonsense come to end which is still over a week away. Weather concerns in the southern part of the United States is supporting prices at the current time as hot and dry conditions are headed towards key growing regions as cotton prices historically speaking are relatively cheap. Volatility in this market should increase tremendously over the next several weeks as production numbers will start to surface giving us a better idea about production numbers, but continue to stay long as the chart structure will not improve for another 7 days, so you are going to have to accept the monetary risk.
CHART STRUCTURE: IMPROVING
Coffee futures in the September contract settled last Friday at 136.95 while currently trading at 141.30 right at a 10 month as I have been recommending a bullish position from around the 123 level and if you took that trade continue to place your stop loss under the 10 day low which stands at 127.10 and will improve in Monday’s trade to 129.60 as I still think higher prices are ahead. Coffee is experiencing wild volatility on a daily basis, and that will continue especially at higher prices so stick to the rules and don’t take profits. At the current time, I’m recommending a bullish position in cocoa, coffee, cotton, and the sugar market as the soft commodities continue their torrid pace to the upside and that is why you must be a trend follower as trading against the path of least resistance is extremely dangerous over the course of time. Rumors of a frost developing in key coffee-growing regions in the country of Brazil has sent prices higher. However, it does not look like that situation is going to occur in my opinion, but coffee still remains cheap compared to the rest of the soft commodities. If you have missed this trade move on and look at other markets as the risk/reward are not in your favor as the risk is extremely high at today’s price levels
CHART STRUCTURE: IMPROVING
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
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.