Lots of Selling Pressure In Euros/S-franc; CPI Looms
| PREVIOUS POSITIONS | ||||
|---|---|---|---|---|
| Market |
Long/Short |
Enter | size=2 color=000000>Exit | size=2 color=000000>P/L (per contract) |
| Sep. 99 T- bonds | Short | 115-23 | 115-06 | $531.25 |
| Sep. 99 S&Ps | Short | 1412 | 1403 | $2250 |
| Sep. 99 Swiss franc | Long | .6380 | .6390 | $125 |
CURRENT POSITIONS (AS OF 7/14/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Sep. 99 T-bonds | – | Flat | – | – | – |
| Sep. 99 S&Ps | – | Flat | – | – | – |
| Sep. 99 Swiss franc | – | Flat | – | – | – |
Note: All price levels are approximate.
T-bond futures
The September futures [USU9>USU9] were little changed today even with the lower-than-expected PPI number. The core rate, which excludes energy and food, was down .2% in June instead of rising .1% as expected. Bonds initially rallied to make new highs for the move, but then sold off.
Retail sales edged up .4% in June, which weighed a little on the market as well as a revised upward revision in May from 1% to 1.2%. This was enough to make the bulls nervous and sell some of their longs. CPI is out tomorrow. Stay tuned.
S&P 500 futures
We covered our short position in the September contract [SPU9>SPU9] yesterday on the open at the 1403 level. The market was lower in the morning after bonds sold off but recovered after investors took in the fairly good earnings reports.
Volatility levels are still somewhat low and we expect some kind of bigger sell-off; further bad news from emerging markets could be the catalyst. We are waiting for a low-risk entry point.
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| Figure 1. September S&P futures (SPU9), 15-minute bar. Source: Quote.com.
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Currency futures
Like the bonds, the September Swiss franc [SFU9>SFU9] and Euro [ECU9>ECU9] did little today. We exited our longs yesterday. Comments from German political figures about further weakness in the Euro put some pressure on the market, but not enough to cause any major movement.
The market is still heavily short and any upward movement will trigger stop orders, which should cause more upward price movement. We will look to sell into such a rally if it occurs. Keep watching.
Next scheduled update: Friday, July 16, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)