S&P Bounce Soon
| PREVIOUS POSITIONS | ||||
|---|---|---|---|---|
| Market |
Long/Short |
Enter | size=2 color=000000>Exit | size=2 color=000000>P/L (per contract) |
| Sep. 99 T- bonds | Short | 114-05 | 113-09 | -$875 |
| Sep. 99 S&Ps | Short | 1342 | 1349 | $-1750 |
| Sep. 99 Swiss franc | Long | .6530 | .6580 | $625 |
CURRENT POSITIONS (AS OF 6/25/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Sep. 99 T-bonds | – | Flat | – | – | – |
| Sep. 99 S&Ps | 6/25/92 | Long | 1330 | 1317 | 1342 |
| Sep. 99 Swiss franc | – | Flat | – | – | – |
Note: All price levels are approximate.
T-bond futures
The September futures [USU9>USU9] rose slightly today after yesterday’s continued sell-off. We exited our position yesterday as our stop was hit.
Today bonds briefly sold off after the GDP was revised upward to 4.3% from 4.1%. Afterwards, a lower-than-expected existing home sales number sparked a rally–the market obviously chose to put more weight on this report than the GDP report.
We are now on the sidelines, awaiting next week’s Fed meeting. The market is now weighing the possibility of a 50-basis point hike that has caused selling the last couple of sessions.
 |
| Figure 1. September T-bond futures (USU9), 15-minute bar. Source: Quote.com.
|
S&P 500 futures
We established a long position in the September contract [SPU9>SPU9] at the 1330 area. The probability for a bounce in the next two sessions is high enough to warrant a trade here. We see excess negative sentiment regarding next week’s Fed meeting even though a 25-basis point hike has already been factored in. Also, any bounce in the bonds will rally the stock market. Our stops are in at the 1317 area and we have a profit target around 1342.
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| Figure 2. September S&P futures (SPU9), 15-minute bar. Source: Quote.com.
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Currency futures
The September Swiss franc [SFU9>SFU9] and Euro [ECU9>ECU9] followed up yesterday’s rally with another today. The negative moves in bonds and stocks yesterday helped lift the franc because capital moved from the U.S. back to Europe.
We exited our longs at the .6580 level today at the close. Comments by government officials usually provide good trading opportunities, and this was one of them. Stay tuned.
Next scheduled update: Monday, June 28, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)