Euro Currencies Bounce; Friday’s PPI Should Mix Things Up
| PREVIOUS POSITIONS | ||||||
|---|---|---|---|---|---|---|
| Market | Long/Short | Entry | Exit | P/L (per contract) | ||
| June T-bonds | Long | 117 14/32 | 116 15/32 | -$968.75 | ||
| June S&Ps | Short | 1328 | 1327 | $250 | ||
| June Swiss franc | Long | .6555 | .6575 | $250 | ||
| CURRENT POSITIONS (as of 6/7/99) | ||||
|---|---|---|---|---|
| Market | Long/Short | Entry | Stop | Target |
| September T-bonds | Long | 116-06 | 115-05 | 115-27 |
| June S&Ps | Flat | – | – | – |
| June Swiss franc | Flat | – | – | – |
Note: All price levels are approximate.
S&P 500 futures
We covered our shorts yesterday in the June S&Ps [SPM9>SPM9] for a small profit. We will look to go long tomorrow as we still believe this market is in a trading range. Check back for exacts levels. The tech stocks did very well today, which should provide some leadership on the upside but the interest rate worries are still there.
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| Figure 1. June S&P futures (SPM9), 15-minute bar. Source: Quote.com.
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T-bond futures
The September futures [USU9>USU9] dropped slightly today again as the market awaits Friday’s Producer Price Index (PPI) report. We are still long but have lowered our exit point to the 115 27/32 level (which would represent a small loss).
The market looks oversold but the downtrend is proving more powerful than we anticipated. Our stops is still at the 115 05/32 area. Even if Friday’s PPI comes out stronger than expected, we will look to buy bonds if they sell off after the number to average down our trade.
Currency futures
The September Swiss franc [SFU9>SFU9] and Euro [ECU9>ECU9] rallied strongly yesterday as Kosovo peace talks made progress and German GDP figures came in stronger than expected.
We exited our long position on the rally and moved to the sidelines. Friday’s PPI should provide a trading opportunity. Our research indicates that the market is in for some sideways trading because yesterday’s sharp rally caused many traders to go exit the market as they covered their short positions. (Remember, approximately 95% of daily volume in these markets are traders.)
Next scheduled update: Friday, June 11, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)