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 August contract settled last Friday in New York at 48.56 a barrel while currently trading at 47.71 down about $1 for the trading week while selling off $2.50 this Friday afternoon. The U.S dollar is up over 200 points putting pressure on oil and the commodity sector as a whole. Crude oil prices are trading below their 20 day but still above their 100-day moving average telling you that the short-term trend is mixed as I’m currently sitting on the sidelines looking for a possible short entry in next week’s trade. Crude prices are retesting last week’s low as a possible top has been created as the Brexit situation is spooking many different markets including stock markets around the world as demand could start to wane over the next several months. The commodity markets do not like uncertainty and no one really knows how this Brexit situation will develop, but I always look at risk/reward scenarios as I do think prices may have topped out in the short-term so be patient and wait for the entry criteria to come about. If a short position is initiated the risk is around $1,700 which is too much in my opinion so are going to have to be patient and wait for the chart structure to improve so keep a close eye on this market.
CHART STRUCTURE: IMPROVING
U.S. Dollar Futures
The U.S dollar is sharply higher this Friday afternoon trading at 95.53 up 200 points reacting sharply to the Brexit situation as the UK has exited the EU sending the dollar up 300 points over the last 2 trading sessions. At present, I’m sitting on the sidelines in this market as the chart structure is terrible as I’m advising clients to avoid this market currently as volatility is extremely high, but in my opinion, it certainly does look like the U.S dollar has bottomed in the short-term. The dollar is affecting many commodities to the downside as nobody wants to hold money in Europe at this point as a flight to quality is taking place. I think that’s going to stay for several more weeks until the dust settles so look at other markets that are beginning to trend with better chart structure as the 10 day low is $3,000 away which does not meet my criteria to enter into a new bullish position. The U.S dollar is trading above its 20 and 100-day moving average telling you that the short-term trend is higher so do not sell this market as that would be countertrend trading which is very dangerous over the course of time in my opinion.
CHART STRUCTURE: POOR
Gold futures in the August contract settled last Friday in New York at 1,295 an ounce while currently trading at 1,319 up about $25 for the trading week while skyrocketing this afternoon by $55 all due to the Brexit situation which is pouring money back into the precious metals. At present, I'm sitting on the sidelines in the gold market as the chart structure never met my criteria to enter into a bullish position. However, I am recommending a bullish position in the silver market which is also up about $.50 today as I do think the precious metals are headed higher. Gold prices are trading above their 20 and 100-day moving average telling you that short-term trend is higher. The commodity markets, in general, are very weak as all of the interest is back into the precious metals which is used as a flight to quality despite the fact that the U.S dollar was up over 200 points this afternoon. Gold prices are trading at a 2 year high as I do think this trend will continue as stock markets around the world are sharply lower as interest in gold certainly has come back like it was in 2011 when prices traded as high as $1,900 an ounce. Negative interest rates around the world continue to support the gold market and that situation is not going to change as the United States Federal Reserve certainly will not be raising rates in 2016 in my opinion.
CHART STRUCTURE: POOR
Silver futures in the September contract settled last Friday in New York at 17.46 while currently trading at 17.90 up about $.45 for the trading week as I’ve been recommending a bullish position from the 17.35 level and if you took that trade continue to place your stop loss under the 10 day which stands at 17.17 an ounce as the chart structure has tightened up. Silver is experiencing wild volatility this Friday afternoon due to the fact of the Brexit situation which is sending gold sharply higher as well as the U.S dollar is up 250 points as there is a flight to quality which is occurring in the precious metals so continue to stay long while placing the proper stop loss. Silver is trading at prices not seen since January 2015 as prices are trading above their 20 and 100-day moving average telling you that the short-term trend is higher as at the current time as I have very few trade recommendations, but I do think silver prices remain bullish. At present, there is absolute panic occurring throughout stock markets around the world and that is why money is pouring back into the precious metal sector and should continue for a while, but I do think this situation is overblown. The trend is your friend & the trend in silver clearly is higher as prices historically speaking still look cheap.
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
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.
Corn futures in the December contract settled last Friday in Chicago at 4.49 a bushel while now trading lower for the 5th consecutive trading session currently at 3.86 down about $.63 for the trading work week absolutely collapsing hitting a 5 week low. I have been sitting on the sidelines in the corn market for quite some time as the chart structure is absolutely terrible as I’m advising traders to completely avoid this market as the risk/reward is not in your favor at present. The Brexit vote is sending shockwaves throughout the commodity world this Friday including stock markets around the world as I do think that was the correct decision, but in the short term, it looks like lower prices are ahead. Corn prices are trading far below their 20 and 100-day moving average as the outstanding weather in the Midwestern part of the United States is pushing prices lower. It looks like we will produce another record crop, but avoid this market at present and look at other markets with better risk parameters as the next major level of resistance is around the contract low of 3.65 a bushel which looks to be retested in the coming weeks.
CHART STRUCTURE: POOR
Soybean futures in the November contract settled last Friday in Chicago at 11.48 a bushel while currently trading at 10.76 down about $.72 for the trading week following in the footsteps of corn as the grain market is absolutely falling out of bed. At the current time, I’m sitting on the sidelines in the soybean market, but I have a bearish stance. I do think prices are way too high compared to the rest the grain market especially corn prices, but prices have only hit a 3 week low coupled with poor chart structure which does not meet my criteria to enter into a new position. Soybean prices are trading below their 20 but still above their 100-day moving average as the excellent weather in the Midwestern part of the United States is starting to pressure prices as it certainly looks like an excellent crop is developing. The U.S dollar is up 250 points which is putting pressure on all commodity sectors as the UK has exited the EU, which is bearish asset prices across the board. I still think soybean prices could trade sharply lower even from today’s price levels and if you are a producer start to hedge as this could get very ugly to the downside in my opinion. Soybean meal futures which have been the leader to the upside over the last several months now looks very weak and is also starting to put pressure on soybean prices as this whole complex looks to head lower.
CHART STRUCTURE: POOR
Sugar futures in the October contract settled last Friday in New York at 19.90 a pound while currently trading at 19.15 down about 75 points for the trading week hitting a 2 week low as I was stopped out of my bullish position around the 19.09 level as its time to move on and look at other markets that are beginning to trend. Sugar prices are trading right at their 20-day but still over their 100-day moving average as this was a trade that we have been involved with for over 2 months as prices continued to move higher, but as an exit strategy if I have a bullish position and prices hit the 2 week low it’s time to move on. Sugar prices had a hard time staying above the 20 level, but I’m not disappointed as this trend was extremely strong over the last 8 weeks and one positive note was that the chart structure finally had tightened up to a reasonable level. The soft commodities, in general, are extremely weak this afternoon due to the fact of the Brexit situation selling off many commodity sectors. The U.S dollar is up over 200 points as maybe the tide is turning, but I will wait for a 4 week low before entering any type of short position as the trend at the current time is now mixed.
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
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.