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.

Gold Futures

Gold prices in the April contract are currently trading at 1,319 an ounce after settling last Friday in New York at 1,319 as the U.S. stock market dropped 10% in a matter of days. Generally speaking, that sends gold prices much higher, but not in this case as the precious metals continue to go lower. The U.S. dollar is the main culprit to this phenomenon as its higher once again today as investors are buying the dollar and selling all assets including the metals as silver and platinum continue to move lower coupled with the fact that copper has absolutely fallen out of bed this week. If you take a look at the daily chart gold prices bottomed out on December 12th at 1,242 while then topping out on January 25th at 1,370 and the 50% retracement stands around the 1,306 area. I think that will be tested in next week's trade as I am currently not involved in any of the precious metals. Gold is trading below their 20-day moving average, but slightly above its 100-day as we are right near a five-week low as investors don't want to own anything at the current time. It looks to me this could continue next week as well. However, there is panic going on at present as there will be very good buying opportunities in the coming days ahead.
TREND: MIXED - LOWER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Crude Oil Futures

Crude oil futures are trading lower for the 6th consecutive session after settling last Friday in New York at 65.45 a barrel while currently trading at 59.90 down about $5.50 for the trading week. If you read my previous blog earlier this week, I stated that if you were long a futures contract, it was time to move on at the two-week low which was around the 63.30 level as prices have absolutely collapsed. Prices are trading right at a six-week low now below their 20-day moving average but still above their 100-day as the trend is mixed to lower. I'm sitting on the sidelines as I have no recommendations in the energy sector as they have fallen out of bed due the high volatility that has encompassed the U.S. stock market and that is putting pressure on oil prices here in the short-term. Longer-term I'm still bullish the energy sector, and I think prices will recover & head higher, but it looks like prices could test major support around the $57 level so look at other markets that are beginning to trend. One bright spot is the volatility in 2018 across all sectors has increased tremendously as we had very little volatility in 2017 so there will be more opportunities as price swings are becoming dramatic on a daily basis.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: INCREASING

Natural Gas Futures

Natural gas futures in the March contract settled last Friday in New York at 2.84 while currently trading at 2.61 lower for the third consecutive session looking to retest the contract low which was touched on December 21st at 2.55. I am currently not involved in this commodity, but I'm looking for a possible bullish position. I will be patient as I think lower prices are ahead despite the fact that we have had a severe cold snap in the Midwestern part of the United States with substantial snows. The problem is the energy sector has completely collapsed over the last week as oil prices are now down about $7 from the most recent high so avoid this market as catching a falling knife is very troublesome in my opinion. Natural gas prices are trading below their 20 and 100-day moving average as the trend clearly is to the downside and I do think prices are limited, but could still possibly trade as low as 2.40 as spring is right around the corner and that generally means less demand for this product which puts pressure on prices. Volatility in natural gas remains high as that occurs in January and February as that's when cold temperatures can spike demand pushing prices higher or the opposite can happen as warm temperatures arrive pushing prices lower so keep an eye on this market for possible a bullish position on the next leg down.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

10-Year Note Futures

The 10-year note in the March contract settled last Friday in Chicago at 120/23 while currently trading at 121/01 up slightly for the trading week and experiencing tremendous volatility due to the U.S. stock market dropping 10% from its recent highs sending investors into the bond market as a flight to quality. I have been recommending two bearish positions with an average price of 123/12 & if you took those trades, the stop loss remains at 122.17 on a closing basis only as that will remain so for another seven trading sessions so you will have to accept the monetary risk at this time. I will not recommend any more short positions as the volatility has increased tremendously and I don't see that stopping anytime soon as crazy volatility has entered the U.S. stock market, but I do believe the 10-year note will crack the 3% yield as we are right now at about 2.85%. The trend remains strong to the downside so stay short. The main reason for the selloff in the stock market is higher interest rates as nobody knows how high they can actually go, but I do think we will trade near the 3.50% level come Christmas or even higher as growth rates in the United States are way too high to have these extremely low-interest rates.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 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 March contract finished the week on a sour note down 3 cents at 3.62 a bushel after settling last Friday in Chicago at 3.59 continuing its slow grinding bullish momentum with extremely low volatility reacting pretty neutral off of yesterday's USDA crop report. The U.S. dollar is up once again today as the commodity markets are getting slammed overall and oil has now dropped $8 over the last week or so as people are just selling to sell at this point. The grain market is lower across the board, but I remain bullish this commodity as I think all the fundamental bad news has already been reflected in the price. I have been recommending two bullish positions with an average price of around 3.58 & if you took the trade, the stop loss has been raised to 3.56 as the chart structure is outstanding at present as we are still hovering right near a 14 week high. The U.S. stock market has absolutely fallen out of bed over the last week which is also putting pressure on all commodity sectors as investors don't want to own anything at the current time as I think there will be some terrific buying opportunities down the road as the commodity markets remain extremely cheap. Corn prices are hovering right near 14-week highs as we will keep a close eye on planting intentions in 2018 as I am also recommending a bullish position in wheat & the oat market which are lower in today's trade as well as there is very little green on my screen as I write this article.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Cotton Futures

Cotton futures in the May contract settled last Friday in New York at 78.61 while currently trading at 77.69 down about 90 points for the trading week and right at a six-week low. I am not involved in cotton as I am waiting for another bullish trend to develop which could take some time as yesterday's USDA crop report stated that world ending stocks rose 760,000 bales to 88.5 million bales as U.S. and China supply both increased and that has put pressure on prices over the last several weeks. Prices are trading below their 20-day but still above their 100-day moving average as we are right at major support and the trend is lower to mixed, so be patient as we will now focus on the 2018 crop in the coming months. Prices topped out last month at the 84 level, and we have now dropped over 700 points with the next major level of resistance at the 75.00 level. I think that could be tested in the weeks ahead as the U.S. dollar continues its bullish momentum higher once again today as the U.S. stock market has dropped 10% from its high and has sent shock waves throughout many of the commodity sectors like oil and the precious metals, which also continue to decline on a daily basis. I think that prices are limited to the downside. However, we might have a little more weakness over the next couple of weeks as the fundamental picture remains relatively strong so keep a close eye on this market to the upside.
TREND: LOWER - MIXED
CHART STRUCTURE: POOR
VOLATILITY: INCEASING

Coffee Futures

Coffee futures in the March contract is trading lower by 100 points at 121.85 a pound, and I'm currently sitting on the sidelines. But I will be recommending a bullish position if prices break the five-week high of 125.85 while placing the stop loss under the two-week low standing at 119.10 as the risk would be about $2,600 per contract plus slippage & commission. Coffee is one of the largest contracts out of the commodity sectors as you are controlling 37,500 pounds as the chart structure at present is outstanding even though the risk is relatively high because it is such a large contract, so you're going to have to accept that type of risk if your trading coffee. I think the risk/reward would be in your favor as coffee can have huge price swings, however, at present, a large crop coming out of Vietnam and Brazil coupled with large worldwide supplies continue to keep volatility extremely low coupled with depressed prices. I do believe all of the fundamental bad news has already been reflected into the price as we could be involved possibly tomorrow. Coffee is trading above their 20-day moving average but below their 100-day as the trend is mixed to sideways as the 120 level has held on multiple occasions as I do think we are in a bottoming process as I see the volatility expanding to the upside in the weeks ahead.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY:LOW

Cocoa Futures

Cocoa futures in the March contract is currently trading at 2011 after settling last Friday at 2059 down about 50 points for the trading week and unable to crack the critical 2070 level as that was attempted on three different occasions only to fail every single time. I have been recommending a bullish position over the last month from the 1990 level if you took the trade the stop loss has now been raised to 1943 as the chart structure is excellent because prices have gone nowhere over the last week. Prices are trading above their 20 and 100-day moving average, but just barely. We need some fresh fundamental news to push prices higher as the U.S. dollar continues its bullish momentum and that has put pressure on prices in many commodity sectors this week as investors are exiting the U.S. stock market and buying the dollar as a flight to quality for safety reasons. Volatility in cocoa has increased over the last several weeks as I remain bullish and I will not second guess as I will continue to place the proper stop loss and see what next weeks trade brings. If prices break the critical 2070 level, I will be recommending to add another bullish position as the risk/reward will still be in your favor due to the outstanding chart structure.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: INCREASING

Trading Theory

What Is A Rounding Top Chart Pattern? A chart pattern used in technical analysis which is identified by price movements that, when graphed, form the shape of an upside down "U." A rounding top may form at the end of an extended upward trend and indicates a reversal in the long-term price movement.

The pattern can develop over several weeks, months or even years, and is considered a rare occurrence by many traders.

This pattern is also described as an inverse saucer. A rounding top represents a sell signal to technical analysts. The initial upwards trend becomes exhausted as the demand for the stock dries up.

The reversal to the downward slope of the rounding top indicates that demand has tapered off and a surplus supply is present. Basically there are more sellers than buyers.

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: 630-408-3325
mseery@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.

2 thoughts on “Weekly Futures Recap With Mike Seery

  1. Sentiment My instincts told me the spike in bullish sentiment that had some concerned would be temporary. The last few weeks that bullish sentiment has been in retreat. Based on the weekly survey from AAII, bullish sentiment declined from 44.

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