December T-Bond Up on the October Retail Sales Report
| PREVIOUS POSITIONS | ||||
|---|---|---|---|---|
| Market |
Long/Short |
Enter | size=2 color=000000>Exit | size=2 color=000000>P/L (per contract) |
| Dec. 99 T-bonds | Long | 114-05 | 115 | $843.75 |
| Dec. 99 S&Ps | Short | 1376 | 1379.50 | $-975 |
| Dec. 99 Swiss franc | Long | .6550 | .6500 | -$625 |
CURRENT POSITIONS (AS OF 11/12/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Dec. 99 T-bonds | – | Flat | – | – | – |
| Dec. 99 S&Ps | 11/12/99 | Short | 1401 | – | – |
| Dec. 99 Swiss franc | 11/8/99 | Short | .6478 | .6590 | – |
Note: All price levels are approximate.
T-bond futures
| Today’s reports eased concerns about a rate hike emerging from the Fed meeting next week |
The December T-bond [USZ9>USZ9] was up today on the October Retail Sales report, which came in as expected. This eased concerns about a rate hike emerging from the Fed meeting next week. Also, the U.S. productivity and costs report showed productivity increasing and labor costs not rising as much as expected. In short, this was what the bulls have been looking for.
Short-term, we think we will see a pre- Fed sell-off, and we sold our longs at our profit target.
 |
| Figure 1. December T-bond futures (USZ9), 15-minute bar. Source: Quote.com.
|
Stock index futures
| As with bonds, we think there is a good chance of a pullback |
The December S&Ps [SPZ9>SPZ9] rallied today on the this morning’s bullish government reports. Inflation fears are going down and the bulls are still buying, despite some sell-offs in the tech stocks. Our logic is the same as the bonds today. We think there is a good chance of a pullback and we are establishing a short position on the close at the 1401 area.
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| Figure 1. December S&P futures (SPZ9), 30-minute bar. Source: Quote.com.
|
Currency futures
The December Swiss franc [SFZ9>SFZ9] made new lows today on a weak German retail sales report (which fell 4.3% in September) and a rally in U.S. stocks. The weak retail sales report quells expectations of further rate hikes by the European Central Bank, which is bearish for Euro currencies. We are staying with our positions.
Next update: Monday, November 15, 1999.
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)