Low-risk Opportunity On The T-bonds
T-bond futures
Short-term perspective: We established a long position in the June contract [USM9>USM9]
yesterday (Thursday, Feb. 25) at the 120 25/32 level because the market was oversold and
volatility suggested a temporary bounce.
The market rallied this morning on a bullish interpretation of the revised GDP report,
despite it showing that the U.S. economy grew
even faster than first reported in the fourth quarter of 1998. The fact
that traders chose to pick out the positives in the report (example,
construction spending slowed a bit) shows the market was oversold yesterday.
Long-term perspective: Bonds still are in a downtrend; the market is worried about interest
rate hikes later in the year. We remain short with stops at the 124 level in the June contract.
Currency futures
Short-term perspective: The market reached our exit point in the March D-Mark [DMH9>DMh9] at
the 5660 level yesterday.
Long-term perspective: Fears of higher domestic interest rates are still favoring
U.S. dollars over D-marks. We remain short the March futures with stops in at the 5800
level.
S&P 500 futures
Once again, we are on the sidelines, looking for a low-risk trade opportunity in the March
futures [SPH9>SPH9]. Tech stocks are in a sharp correction, which also is weighing on the
S&P 500 stocks. We will be looking for entry points on Monday. Stay tuned.
Next scheduled update: Monday, March 1, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)