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 December contract settled last Friday in New York at 51.84 a barrel while currently trading at 52.52 up to around $0.70 for the trading week continuing its slow, methodical bullish trend. However, the true breakout to the upside stands at 53.11 which could happen in today's trade despite the fact that the U.S. dollar continues its bullish momentum hitting another three month high in today's trade. The main reason that crude oil continues to move higher is that strong demand continues to prop up prices as heating oil and unleaded gasoline are hitting contract highs once again and if you've noticed at the retail gas stations prices are relatively high. I think these trends will continue throughout 2017 as the U.S. economy is very strong coupled with very low unemployment. Crude oil is trading above its 20 and 100-day moving average and the trend is clearly to the upside and I'm recommending a bullish position if prices breakout above 53.11 while then placing the stop loss under the two week low standing at 50.87 risking around $2.20 or $1,100 per mini contract plus slippage & commission. Tthe chart structure is solid due to very low volatility.
TREND: HIGHER
CHART STRUCTURE: SOLID

S&P 500 Futures

The S&P 500 in the December contract settled last Friday in Chicago at 2574 while currently trading at 2564 down about 10 points for the trading week having its 1st losing week in over a month. I remain bullish the entire equity market as excellent earnings in the tech sector such as Google, Microsoft; Amazon continues to propel the NASDAQ to all-time highs once again. If your long a futures contract continue to place the stop loss under the two week low on a closing basis which was touched just two days ago at 2542 as I still see higher prices ahead especially as we enter the holiday season as I see no reason to be short this market. The S&P 500 is trading far above it's 20 and 100-day moving average, and the trend is higher as prices look to retest the all-time high that was touched on October 20th at 2577. I still think we will hit 2600 in the coming weeks ahead as this momentum is getting stronger as American companies are doing extremely well with massive cash reserves at the same time. Low-interest rates coupled with massive deregulation that is occurring under the Trump administration continue to spur profits to the upside, and I don't think that situation is going to change anytime soon.
TREND: HIGHER
CHART STRUCTURE: SOLID

Coffee Futures

Coffee futures in the December contract settled last Friday in New York at 125.25 while currently trading at 125.50 up slightly for the trading week holding major support at the 123 level. I'm itching for a bullish position in this market as I think the commodities are starting to bottom out despite the fact that the U.S. dollar continues to hit multi-month highs but is having little impact on prices at this time. The weather phenomenon known as La Niña is starting to occur & could have a dramatic impact on Brazil as there are certain pockets of coffee growing regions that need rain at present. However, it's very early to say that there is any drought like what developed in 2014 when coffee prices exploded to start the new year due to lack of rain. A double bottom may have occurred on the daily chart as prices are unable to break the 123 level in my opinion despite the fact that prices are still trading right at their 20-day, but below their 100-day moving average as the chart structure is improving, but it is still poor at present. It will take more time before I enter into a bullish position as the risk/reward is not in your favor. If you are bullish coffee and think prices have bottomed out place the stop loss at the contract low of 119 risking around 700 points or $3,000 per contract plus slippage & commission as coffee is the largest contract in the world with huge risk and huge potential as well.
TREND: MIXED
CHART STRUCTURE: POOR - IMPROVING

Sugar Futures

Sugar futures in the March contract settled last Friday in New York at 14.00 a pound while currently trading at 14.11 basically unchanged for the trading week and still stuck in a five-week consolidation with very little volatility. I'm not currently involved in sugar as I'm waiting for the breakout to occur which would be at the 14.57 level as there is absolutely no fresh news to push prices in any direction. Prices are trading right at their 20-day & slightly below their 100-day moving average which now stands at 14.48 as the volatility has come to an absolute crawl. Sugar prices are holding major support around 13.50/13.70 as large worldwide production continues to keep a lid on prices coupled with the fact that the U.S. dollar is up sharply again in today's trade as it hit a three month high and that is definitely putting pressure on the agricultural markets. My only recommendation in the soft commodities is cocoa which is slightly lower in today's trade as the rest of the sector remains in a mixed trend as the volatility in sugar will increase, and I still think historically speaking prices look cheap.
TREND: MIXED - SIDEWAYS
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

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

Corn futures in the December contract settled last Friday in Chicago at 3.44 a bushel while currently trading at 3.50 up about 6 cents for the week still stuck in an eight-week consolidation. The harvest should be around 50% complete after this weekend keeping a lid on prices as we still have about 7 billion bushels out in the fields. Corn prices are trading right at their 20-day but still far below their 100-day moving average which stands at 3.70. I'm not involved in corn, but the true breakout to the upside is at 3.58, and I will not take a short position as I think corn is in a bottoming pattern. At present, I do not have any grain recommendations as I was stopped out of soybean and soybean meal trades this week as prices have gone nowhere over the last several months with very little volatility. There could be a triple bottom on the daily chart in corn, and I think it will start riding the coattails of crude oil which has broken out today as corn is used as an ethanol product. We could be involved to the upside relatively soon. I think the U.S. will plant fewer acres in 2018 as a bullish trend will develop next year as we produced around 14.2 billion bushels in 2017. We need to start producing less on a yearly basis, therefore, helping the farmers become more profitable.
TREND: SIDEWAYS
CHART STRUCTURE: EXCELLENT

Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 4.26 a bushel while currently trading at 4.26 unchanged for the trading week lower for the 3rd consecutive session looking to retest the August 29th low of 4.22 as wheat prices remain on the defensive. The U.S. dollar is up another 40 points hitting a three month high and that is putting pressure on corn and wheat in today's trade as prices are still trading under their 20 and 100-day moving average telling you the trend is to the downside. I am not involved in this commodity at present. Wheat prices are right at major support as we have gone nowhere over the last two months as I'm bullish many of the commodity sectors I think we are in a longer-term bottoming out pattern as some of the commodities have come to life in today's trade despite the strength of the U.S. dollar. Growing conditions in the Great Plains part of the United States are ideal as the winter wheat is off to an excellent start as huge supplies and weak demand continue to keep a lid on prices. We are starting to enter the volatile growing season of the winter months which will spark volatility to the upside in my opinion, however, avoid this market at the present time.
TREND: LOWER
CHART STRUCTURE: SOLID

Cocoa Futures

Cocoa futures in the December contract settled last Friday in New York at 2138 while currently trading at 2115 down about 23 points for the trading week. I have been recommending several bullish positions the original one from around the 2010 level while adding the 2nd position around the 2145 level as prices have stalled out this week. If you took the original trade, continue to place the stop loss which in Monday's trade will be 2057 which is the two week low as the chart structure will not improve for another eight sessions, so you're going to have to accept the monetary risk at this time. Prices look to retest the October 25th high of 2160 as I do think that could occur next week despite the fact that the U.S. dollar continues its bullish momentum to the upside but is having very little impact on cocoa prices currently. Cocoa is still trading above its 20 and 100-day moving average as the trend remains higher and I'm starting to believe that commodity prices are bottoming as we saw some positive action today in coffee and in sugar which broke out today. Continue to place the proper stop loss while risking 2% of your account balance on any given trade.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

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.