Dow 10K Watch Confuses on Short-term Financial Futures Cues
T-bond futures
June T-bonds [USM9>USM9] sold off today, continuing their longer-term down trend.
There were no
reports today on the economy, and the longs were taking profits ahead
of the weekend.
We covered our (short-term) short position around 121 19/32 today, making
a small profit. We are now back to the sidelines as we await another
low-risk entry point. But long-term, we still have an existing short position
in the June contract.
Currency futures
We covered our short position in the June D-Mark [DMM9>DMM9] at the .5620 level for a small
profit. The market did not react to the EC central bank’s decision to leave
short-term rates unchanged at 3%. This should have been somewhat bullish news,
but the market is just too bearish on the D-mark now. We remain short
on our longer-term trade.
Note: We will begin trading Swiss franc futures as volume on the D-mark
futures dwindles because of the ECU. (ECU futures exist, but we
are still waiting for them to develop more volume.)
S&P 500 futures
The June S&P [SPM9>SPM9] futures backed off as the bond market and IBM gave traders an
excuse to sell today.
The market is very volatile and difficult to interpret right now as
emotions run high on the Dow 10,000 hype. We remain in watch-and-wait mode until a low-risk
entry point presents itself. Stay tuned.
Next scheduled update: Monday, March 22, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)