Weak Bonds Create Long Opoortunities
| PREVIOUS POSITIONS | ||||
|---|---|---|---|---|
| Market |
Long/Short |
Enter | size=2 color=000000>Exit | size=2 color=000000>P/L (per contract) |
| Sep. 99 T- bonds | Long | 113-19 | 114-02 | $468.75 |
| Sep. 99 S&Ps | Short | 1380 | 1364 | $4000 |
| Sep. 99 Swiss franc | Long | .6710 | .6705 | -$62.50 |
CURRENT POSITIONS (AS OF 8/30/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Dec. 99 T-bonds | 8/30/99 | Long | 114-12 | 113-12 | – |
| Sep. 99 S&Ps | 8/30/99 | Long | 1330 | 1309 | – |
| Sep. 99 Swiss franc | 8/30/99 | Short | .6532 | .6580 | – |
Note: All price levels are approximate.
T-bond futures
The December futures [USZ9>USZ9] fell Monday on the new home sales report, which was slightly higher than expected. Thin trading also helped push down prices even further. The bonds are in the process of forming a range between 113 and 117. We view today’s action as more choppy trading and established a long position at the 114 12/32 level with stops in at the 113 12/32 area.
 |
| Figure 1. September T-bond futures (USU9), 15-minute bar. Source: Quote.com.
|
S&P 500 futures
The September contract [SPU9>SPU9] was down today on weak bonds and a normal pullback from the recent rally off the lows. The VIX (CBOE volatility index) also jumped up noticeably. Same story here as in bonds, however: range-bound trading with sharp rallies and sell-offs. Some economists are already speaking of the timing of the next rate hike, which has changed the psychology of the bulls a little bit. We established longs at the 1330 area. Stops in at the 1309 area.
 |
| Figure 2. September S&P futures (SPU9), 15-minute bar. Source: Quote.com.
|
Currency futures
The September Swiss franc [SFU9>SFU9] and Euro [ECU9>ECU9] were slightly higher today on a weak U.S. stock market. Also, the G-7 meeting of finance ministers started today, which put a lot of traders in a wait-and-see stance.
Volume was very light. It was surprising, however, to see that the currencies were up so modestly against the dollar after a decent sell-off in the stock market here. We established a short position in the franc at the .6532 level with stops in at the .6580 area.
Next update: Wednesday, September 1, 1999.
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)