December S&Ps Up Despite Fed Meeting on the Horizon
| 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 11/15/99) |
|||||
|---|---|---|---|---|---|
| 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 | 1409 | 1397 |
| Dec. 99 Swiss franc | 11/8/99 | Short | .6478 | .6590 | – |
Note: All price levels are approximate.
T-bond futures
| The “best-guess” odds are approximately 60% for a 25 basis point hike tomorrow. |
The December T-bond [USZ9>USZ9] was flat today as traders await tomorrow’s Fed meeting. This morning the Commerce Department released the Business Inventories report, which showed inventories grew .4% in September. However, this was largely ignored by the market.
The “best-guess” odds are approximately 60% for a 25 basis point hike tomorrow. If we don’t get one we could see a rally. However, we have already made our “pre-Fed” trade and will be on the sidelines tomorrow.
Stock index futures
| If the Fed raises rates by 25 basis points we could see a small sell-off followed by a rally |
The December S&Ps [SPZ9>SPZ9] were slightly up today. We were surprised to see this as we anticipated a small sell-off ahead of tomorrow’s meeting. We will try to cover tomorrow at the 1397 area, which we might get immediately after the Fed announces there decision. Our stops are in at the 1409 area.
Tomorrow depends on the Fed. If they raise by 25 basis points we could see a small sell-off and then a rally as the longer-term bulls come in and argue that the Fed is keeping inflation under control.
Currency futures
The December Swiss franc [SFZ9>SFZ9] was flat today as well. We are still short and expect this downtrend to continue as we see higher rates in the U.S. and the current uptrend in the stock market. Stay tuned.
Next update: Wednesday, November 17, 1999.
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