Lower Prices Anticipated for S&Ps
| 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 | Long | 1312 | 1285 | -$6,750 | ||
| June Swiss franc | Long | .6555 | .6575 | $250 | ||
| CURRENT POSITIONS (as of 6/4/99) | ||||
|---|---|---|---|---|
| Market | Long/Short | Entry | Stop | Target |
| June T-bonds | Flat | – | – | – |
| June S&Ps | Short | 1328 | 1350 | – |
| June Swiss franc | Flat | – | – | – |
Note: All price levels are approximate.
S&P 500 futures
The June S&Ps [SPM9>SPM9] enjoyed a relief rally today. Bargain hunters stepped in when they saw that bonds were not going to sell-off anymore.
We believe we are still in a range-bound environment, and we established a short position at the 1328 level with a stop in around 1350. Stay tuned for the profit target on Monday.
Volatility suggests we are in for more range-bound trading, and the fact that bonds did not rally indicates a good probability we will see lower prices in the next couple of sessions.
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| Figure 1. June S&P futures (USM9), 15-minute bar. Source: Quote.com.
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T-bond futures
The June futures [USM9>USM9] were flat on the day after a morning rally on the May employment report faded. The economy added only 11,000 new workers to the payroll in May, which was much less than expected (bullish), but the unemployment rate fell to 4.2%, which was lower than expected (bearish).
At the end of the day these two factors canceled each other out and the bonds ended up not going anywhere. We still believe bonds will trade sideways to down from here. There are no technical signals that suggest taking a trade now.
Currency futures
The June Swiss franc [SFM9>SFM9] and Euro [ECM9>ECM9] gained marginally today. After the employment data was released the market didn’t react much, as traders were busy interpreting the conflicting data.
Volatility levels right now suggest a trading range environment over the next couple of days. Longer term, the European economies are still weaker than the U.S., and this bearish force continues to weigh on the currencies. No position.
Next scheduled update: Monday, June 7, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)
