Weekly Futures Recap With Mike Seery

S&P 500 Futures

The S&P 500 in the September contract is trading at 2989 lower by 11 points off of the monthly jobs number showing that we added another 224,000 new jobs which was construed as bearish because the Federal Reserve might not lower rates. If you have followed any of my previous blogs, you understand that I've had a bullish bias towards the upside for quite some time, and I still think higher prices are ahead.

The primary catalyst for the surge in equity prices is the fact that the 10-year note is now yielding 2.02% which is remarkable in my opinion especially for the growth rate that we are experiencing here in the United States with the GDP average of over 3%.

Generally speaking, you don't see interest rates this low when economies are surging. However, one of the main reasons for bond yields to continue to head lower is the fact that Europe, which is a collection of socialist countries that have no economic growth. They are the catalyst for lower interest rates as many of them are experiencing negative rates while at the current time, the 10-year note stands at 2.02% and still looks expensive.

I still believe the S&P 500 will trade significantly higher come year end as I see no reason to be bearish the U.S. economy as this is the perfect soup with low-interest rates coupled with the fact that the Federal Reserve will back up the U.S. economy.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Silver Futures

Silver futures in the September contract settled last Friday in New York at 15.34 an ounce while currently trading at 15.02 down over $0.30 for the trading week as prices hit a 2 week low.

I have been recommending a bullish position from the 14.93 level and if you took that trade continue to place the stop loss under 14.70 on a closing basis only as an exit strategy as I'm hoping that today's sell-off was exaggerated due to the low volume because of the holiday.

Silver is now trading under its 20 and 100-day moving average as the trend has turned mixed as prices had a difficult time cracking the 15.50 level which was hit on a handful of occasions only to fail as for the bullish momentum to continue prices have to break the 15.50 level in my opinion.

The volatility in silver is starting to increase as we are having many 20/30 cent trading sessions and historically speaking, that's what silver prices do as we can experience tremendous price swings quickly.

If you did not take the original recommendation, I'm still bullish even at today's price levels as the risk is around $300 per mini contract or $1,500 per large contract plus slippage and commission.

TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING

Natural Gas Futures

Natural gas futures in the August contract is currently trading at 2.40 after settling last Friday in New York at 2.30 as prices are right near a 4 week high. I'm not involved in natural gas, but it does look to me that a possible longer-term bottom which was hit on June 20th at 2.13 could be at hand. However, the chart structure is poor, so be patient and wait for a better chart pattern to develop.

Natural gas prices are now trading above their 20-day moving average for the 1st time in over a month, but still far below their 100-day as fundamentally speaking the weather forecast has above-normal temperatures in the Great Lakes and the southern U.S. during July 8-12.

Gas prices moved higher despite Wednesday's bearish weekly EIA nat-gas inventory report that showed U.S. nat-gas inventories rose 89 bcf, higher than expectations of 84 bcf and above the 5-year average of 70 bcf as that marked the 14th consecutive week that U.S. natural gas inventories rose by more than the 5-year average.

The commodity markets are lower across the board today as a stronger U.S. dollar is putting pressure on prices. However, I still believe many sectors look bullish as today is a very thin trading day as I don't put too much meaning into today's action.

TREND: MIXED - HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Platinum Futures

Platinum futures are sharply lower this Friday afternoon in New York down $34 an ounce at 809 as I have been recommending a bullish position from the 840 level and, if you took that trade continue to place the stop loss under the contract low which was touched on May 30th at 793 on a closing basis only.

The entire precious metal sector is getting hammered today as gold is down about $30, as well as the U.S. dollar, is up 65 points putting pressure on the entire sector coupled with the fact that profit-taking is also occurring.

Platinum prices are now trading under their 20 and 100-day moving average as the trend is lower, but, in my opinion, it is still mixed as I will continue to place the proper stop loss and not 2nd guess as I remain bullish. I am surprised at today's trading action. However, you have to remember that today is a very thinly traded market with low volume because the 4th of July holiday was yesterday as many people are still on vacation so let's see what Monday's trade brings.

The volatility in platinum has undoubtedly increased over the last several weeks, so stay long as the risk/reward are still in your favor.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: AVERAGE

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.

Palladium Futures

Palladium futures in the September contract settled last Friday at 1,537 while currently trading at 1,564 remaining the strongest precious metal as it was a real bloodbath across the board today except for palladium which remains in a very strong bullish trend.

I have been recommending a bullish trade from around the 1,388 level and if you took that trade the stop loss now stands at 1,491. However, in Tuesday's trade, will be raised to 1,501 as the chart structure is improving daily, therefore, the monetary risk will also be reduced significantly.

If you have been following any of my previous blogs you understand that I thought we would crack the contract high of 1,563 which happened this week as I still think we move substantially higher in the coming days ahead so, continue to place the proper stop loss as who knows how high prices can go.

Palladium is trading far above its 20 and 100-day moving average telling you that the trend is higher with the next major level of resistance at the all-time high around the 1,600 area as the rounding bottom technical indicator that I've talked about over the last month worked well in this situation.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Corn Futures

Corn futures in the December contract is currently trading at 4.41 a bushel after settling last Friday in Chicago at 4.31 as prices tried to fill the gap at 4.20 earlier in the week coming within 1/4 cent of accomplishing that feat. I am not involved in corn as my only grain recommendation is a bullish soybean oil trade which has been stuck in the mud over the last couple of weeks, but I do believe corn prices will break the June 18th contract high of 4.73 in the coming weeks ahead.

If you have been following any of my previous blogs, you understand that I do not believe the last crop report which sent corn prices down over $0.20 last Friday as there is no way we only lost 1 million acres in my opinion. I think the following report which comes out next week will straighten that situation out.

Volatility in corn remains high, and it will stay that way for the rest of the summer months as there still is a lot of uncertainty on what final production numbers are going to be in 2019.

Corn prices are still trading above their 20 and 100-day moving average as the trend does remain higher, and if you are bullish at this level, I would place the stop loss under this week's low of 4.20 as an exit strategy.

TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Coffee Futures

Coffee futures in the September contract is ending the week on a sour note down 260 points at 111.05 after settling last Friday in New York at 109.45 as prices are still hovering right near a 5 month high. Fundamentally speaking the International Coffee Organization (ICO) cut its global 2018/19 coffee surplus estimate by -8.8% to 3.11 mln bags from a prior view of 3.41 mln bags. Strength in the Brazilian real against the dollar Wednesday was another positive factor for coffee prices since the stronger real discourages export selling by Brazil's coffee producers.

I'm sitting on the sidelines as the chart structure did not meet my criteria to enter into a bullish position as I will wait for some type of price retracement before entering into a bullish trade. If you take a look at the 6-month chart coffee prices bounced off of major resistance at the 115 level as that has been touched on multiple occasions only to fail every single time as the agricultural sector looks to move higher.

Currently, my only soft commodity recommendation is a bullish sugar position as I'm also keeping a close eye on cotton to the upside.

Coffee prices are trading above their 20 and 100-day moving average as I am certainly not recommending a bearish position as that would be counter-trend trading as the volatility has also come to life which is a terrific thing to see as historically speaking prices still look cheap.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: AVERAGE

Live Cattle Futures

Cattle futures in the August contract settled last Friday in Chicago at 104.35 while currently trading at 106.90 gapping higher in today's trading session. I had been recommending a bearish position from around the 106.30 level getting stopped out today at 106.50 as the trade went nowhere over the last several weeks.

Cattle prices are now trading right near a 5 week high while trading above their 20-day but still below their 100-day moving average as I possibly could be looking at a bullish position in next week's trade. The next major level of resistance is between the 107 / 110 area as I will be patient and wait for the chart structure to improve therefore the risk/reward would be more in your favor as it is time to move on if you had a short position and become neutral.

Volatility in many commodity sectors indeed is expanding which is a terrific thing to see, and as I've talked about in many previous blogs, I do think that the giant bearish trends that we have witnessed over the last several years are ending.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: AVERAGE

Trading Theory

What is a Rounding Bottom? A rounding bottom is a chart pattern used in technical analysis and is identified by a series of price movements that graphically form the shape of a "U." Rounding bottoms are found at the end of extended downward trends and signify a reversal in long-term price movements.

This pattern's time frame can vary from several weeks to several months and is deemed by many traders as a rare occurrence. Ideally, the volume and price will move in tandem, and then the volume confirms the trend.

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
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Phone #: 630-408-3325
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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.