Good News In Balkans Means Opportunity In S-franc
| CURRENT POSITIONS (as of 5/5/99) | ||||
|---|---|---|---|---|
| Market | Long/Short | Entry | Stop | Target |
| June T-bonds | Flat | – | – | – |
| June S&Ps | Flat | – | – | – |
| June Swiss franc | Flat | – | – | – |
Note: All price levels are approximate.
S&P 500 futures
The June contract [SPM9>SPM9] eluded our profit target on Tuesday by a fraction. We sold out our longs at the 1330 level for a small loss. We now await the next opportunity.
The market is very difficult to read at the moment, with prices switching direction with unusual frequency. This type of behavior is best viewed from the sidelines.
Figure 1. June S&P futures (USM9), 15-minute bar. Source: Quote.com.
Currency futures
We exited our June Swiss franc [SFM9>SFM9] position yesterday at the .6612 level for a profit. Today the strength continued as signs of progress in the Balkans gave investors a reason to buy European currencies. Further, the sagging stock market here also put pressure on the dollar.
However, we will be looking to go short again in the franc tomorrow around .6750 if we see weakness at that level. Our technical volatility and price movement studies indicate a good risk-reward trade at those prices. Stay tuned.
Figure 2. June Swiss franc futures (SFM9), 15-minute bar. Source: Quote.com.
T-bond futures
The June futures [USM9>USM9] rallied a bit after recovering from an early sell-off after the Factory Orders report showed a 2% increase for March vs. the 1.3% expected rate. Bargain hunters and short covering helped push the market back up. It seems the intermediate-term trend is down now and we will be looking for an entry point in the next couple of sessions.
Next scheduled update: Friday, May 7, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)