Bonds Could Form Bottom if Market Has Factored in Potential November Hike
| PREVIOUS POSITIONS | ||||
|---|---|---|---|---|
| Market |
Long/Short |
Enter | size=2 color=000000>Exit | size=2 color=000000>P/L (per contract) |
| Dec. 99 T-bonds | Long | 111-25 | 111 | -$781.25 |
| Dec. 99 S&Ps | Short | 1378 | 1362 | $4000 |
| Dec. 99 Swiss franc | Long | .6795 | .6690 | -$1312.50 |
CURRENT POSITIONS (AS OF 11/1/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Dec. 99 T-bonds | 10/29/99 | Short | 113-15 | 114-19 | 112-27 |
| Sep. 99 S&Ps | – | Flat | – | – | – |
| Dec. 99 Swiss franc | – | Flat | – | – | – |
Note: All price levels are approximate.
T-bond futures
| Bonds could start forming a bottom here if the market has factored in a potential November rate hike |
The market is still expecting a rate increase on November 16, but now is contemplating the possibility of that one being the last. If that were to be the case, bonds should start forming a bottom here. Friday the Employment report is due, which, as usual, could be very significant for the bond market. We have moved our profit target to the 112 27/32 area.
Stock index futures
The December S&Ps [SPZ9>SPZ9] fell today on profit-taking and a lower bond market. The market was overextended on the upside, and today’s action is just a pullback from that condition.
Inflation worries are still in the air, but seem to have become less of a concern. We covered our short position at 1362 and have moved to the sidelines as we await the next signal.
 |
| Figure 1. December S&P futures (SPZ9), 15-minute bar. Source: Quote.com.
|
Currency futures
| We suspect short positions are being established by funds as momentum is starting to turn down |
Next update: Wednesday, November 3, 1999.
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