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 May contract settled last Friday at 50.60 a barrel while currently trading at 52.10 up about $1.50 for the trading week spiking higher in today's action due to the bombing in the country of Syria sending the precious metals and energies higher. Syria is not a major player in oil as I had witnessed this before in 2013 as prices rallied sharply off of Syria using chemical weapons on their own people only then to sell off sharply in the weeks ahead, so I'm not convinced about this rally as I'm currently sitting on the sidelines. The chart structure in crude oil is poor at present as prices are at a 4 week high while trading above their 20 and 100-day moving average telling you the short-term trend is higher. However, the risk/reward is not in your favor so that I will look at other markets with a better monetary scenario. Crude oil prices have rallied about $5 over the last 2 weeks as this market really has gone nowhere over the last 6 months as oversupply issues continue to keep prices at bay.
TREND: HIGHER
CHART STRUCTURE: POOR

Silver Futures

Silver futures are currently trading at 18.35 after settling last Friday in New York at 18.25 an ounce up $0.10 for the trading week right at a 5 week high as I'm not involved in this market at present as prices touched major resistance in early trade at 18.50 but unable to break through as prices spiked higher on the news of the bombing in Syria overnight. The U.S dollar is up another 30 points today right near a 3 week high continuing its choppy momentum lending very little support or resistance to several different commodity sectors. However, if you are long this market, I would place my stop loss under the 10-day low standing at 18.06 an ounce. At present I do not have any trade recommendations in the precious metal sector despite the fact that silver is trading above its 20 & 100-day moving average telling you that the short-term trend is higher as I'm certainly not recommending any type of short position, but if 18.50 on a closing basis is broken you would have to think that the bullish trend would continue. The chart structure in silver is very solid at present as the volatility is very low as we could be involved in this market especially if prices break major resistance.
TREND: HIGHER
CHART STRUCTURE: SOLID

Coffee Futures

Coffee futures in the May contract settled last Friday in New York at 139.30 a pound while currently trading at 137.00 down over 200 points for the trading week continuing its sideways trend with extremely low volatility as I've not been involved in coffee for months as I'm looking for a trend to finally develop. In my opinion, it looks like coffee prices might retest the December 28th low around 135.20 as the chart structure is excellent as prices have gone nowhere as this market will start to increase volatility wise, as I'm very surprised at how little fresh fundamental news is out there to dictate short-term price action as it still looks like the sideways trend will continue. At present I only have one soft commodity recommendation as that is a bearish position in cotton as I am also negative sugar prices as I think they are also headed lower, but keep a close eye on coffee as we probably will be involved in the next couple of weeks as the risk/reward is starting to become in your favor. Growing conditions in the country of Brazil which is the largest coffee producer in the world are ideal at present helping keep a lid on prices coupled with the fact that the U.S dollar is near a 3 week high.
TREND: LOWER - MIXED
CHART STRUCTURE: EXCELLENT

Sugar Futures

Sugar futures in the May contract settled last Friday in New York at 16.76 a pound while currently trading at 16.82 basically unchanged for the week trading higher for the 2nd session as I am not involved in this market, but I'm still bearish and if you are short place your stop loss at the 10-day high of 18.17 and in Tuesday's trade that will be lowered to 17.59 as the chart structure is improving on a daily basis. Sugar prices are still under their 20 and 100-day moving average is telling you that the trend is lower as the agricultural sectors, in general, continue to head lower in my opinion as I am currently recommending a short cotton position as I still remain negative on sugar prices as I still think there is further downside ahead. Sugar prices continue to be under pressure due to the fact of overproduction and lack of demand at the present time as I think that will continue here in the short term so stay short, however, if you have missed the trade look at other markets that are beginning to trend as the risk/reward are not your favor at the current time. I have talked about sugar many times and I still think there's a possibility prices could head down to the 13.00 level over the next month or so as prices still look expensive in my opinion.
TREND: LOWER
CHART STRUCTURE: IMPROVING

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

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.

Cotton Futures

Cotton futures in the May contract settled last Friday in New York at 77.33 while currently trading at 74.15 down over 300 points for the trading week, as I have been recommending a short position from the 76.25 level & if you took that trade continue to place your stop loss above 10 day high which stands at 78.10 as the chart structure will not improve for another 7 trading sessions, so you're going to have to accept the monetary risk at this time. Cotton prices are now trading under their 20 and 100-day moving average for the first time in months as this was in a bullish trend until recently as the USDA announced 12.2 million acres being planted in 2017 which was well above estimates as we could produce a massive crop in the United States this year. Prices are trading at a 10 week low telling you that the short-term trend is to the downside as I recommended adding more contracts earlier in the week as I think this market still has room to run to the downside with the next major level of support around 72.50 as the fundamental and technical pictures look weak in my opinion so stay short.
TREND: LOWER
CHART STRUCTURE: POOR

Live Cattle Futures

Live cattle futures in the June contract settled last Friday in Chicago at 110.87 while currently trading at 110.30 down slightly for the week, however trading higher for the 3rd consecutive trading session as I'm currently sitting on the sidelines looking at a possible short position in next week's trade. The chart structure in cattle is starting to improve as prices are trading right at their 20-day but still far above their 100-day moving average which stands around 106 telling you that this trend is mixed as prices have rallied about 20% from their October 2016 low and remain right near contract highs. At present I am recommending a short position in the hog market and I do think prices will start to drag cattle down so keep a close eye on this market as the risk/reward is starting to become in your favor as patience is the key here, as we will not be involved until next week as prices are only near a 3 week low. Many of the agricultural sectors continue to move lower, and I do think cattle prices look expensive compared to many sectors in general. However, I will be patient and wait for the true breakout to occur.
TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING

Lean Hog Futures

Lean hog futures in the June contract settled last Friday in Chicago at 73.85 while currently trading at 73.00 as I have been recommending a bearish position from around the 77.45 level and if you took the trade place the stop at the 10-day high of 74.60 as the chart structure has turned outstanding as I'm looking at adding more short positions in next week's trade. The next major level of support is this week's low around 71.70 & if that is broken, I think we can head substantially lower possibly retesting the October 19th low of 68.12 as prices are now trading below their 20 and 100-day moving average telling you the short-term trend is lower. As a commodity trader you must trade with the trend as the path of least resistance is the most successful way to go over the course of time as there are many false breakouts, but fighting the trend is very dangerous in my opinion as I am also looking at a short cattle position which is sharply higher once again today so keep a close eye on that market as I think the livestock sector is overpriced. The U.S dollar is up 30 points this Friday afternoon continuing its short-term bullish momentum keeping a lid on prices here in the short-term, but oversupply issues are the main problem as we have had a tremendous rally over the last 6 months. However, everything comes to an end in my opinion so stay short.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Soybean Futures

Soybean futures in the May contract settled last Friday in Chicago at 9.46 a bushel while currently trading at 9.40 down about 6 cents for the trading week in a relatively nonvolatile manner as I have been recommending a bearish position over the last 6 weeks from around the 10.48 level and if you took the trade continue to place your stop loss above the 10-day high which now stands at 9.76 as the chart structure will improve in next week's trade, therefore, lowering monetary risk once again. Soybean prices are trading at a 1 year low as I do think the May contract which is considered the old crop could still test the $9 level as I am also recommending a short position in the November contract which is the new crop from around the 10.01 level as soybeans continue their bearish trend on a weekly basis. Soybean prices are trading far below their 20 and 100-day moving average telling you that the short-term trend is lower as traders are awaiting the WASDE report which will be released this Tuesday afternoon and certainly should send some volatility back into this market so stay short as who knows how low prices can actually go.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Orange Juice Futures

Orange juice futures in the May contract traded lower for 9 consecutive days and now have traded higher for the last 4 consecutive trading days currently trading at 166.5 up 450 points this Friday afternoon in New York as I'm currently sitting on the sidelines as I'm looking at a short position in Monday's trade as the 10-day high currently stands at the 174 level so keep a close eye on this market as I think prices are too high. The weather in the state of Florida has encompassed greening disease and drought which have pushed prices higher from way oversold levels over the last several days. However, the agricultural markets, in general, are very weak as I have several short recommendations, so focus on a bearish trade come Monday.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Trading Theory

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.