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Markets Cheer as Law Makers Allow Banks Back into Brokerage and Insurance Game

  • October 22, 1999
  • Manuel Ochoa








PREVIOUS POSITIONS
Market

Long/Short

Enter
 size=2 color=000000>Exit size=2 color=000000>P/L (per contract)
Dec. 99 T-bonds Long 111-25 111 -$781.25
Dec. 99 S&Ps Short 1298 1275 $3500
Dec. 99 Swiss franc Short .6900 .6860 $500






CURRENT POSITIONS (AS OF 10/22/99)
Market Date Long/Short Enter Stop size=2 color=000000>Target
Dec. 99 T-bonds – Flat – – –
Sep. 99 S&Ps – Flat – – –
Dec. 99 Swiss franc 10/20/99 Long .6795 .6690 .6875



Note: All price levels are approximate.

T-bond futures

The reports coming out next week could move bonds out of this narrow trading range
The December futures [USZ9>USZ9] had a lackluster session today and we liquidated our longs at the 111 area. This trade went “stale” on us and we exited at the close because the reason we entered the trade had not come to fruition.

We have moved to the sidelines for now as the market has had one of the slowest weeks in months. We suspect the reports coming out next week could push us out of this narrow trading range.

Stock index futures

The December S&P [SPZ9>SPZ9] sold off yesterday on the IBM earnings report. The sell-off was very brief, however, as the market looked beyond IBM to the market as a whole. In particular, the market cheered the agreement between law makers that would let banks get back into the brokerage and insurance business. This provided the bulls with enough confidence to come out today. We covered our short at the 1275 area and have moved to the sidelines for now.



Figure 2. December S&P futures (SPZ9), 15-minute bar. Source: Quote.com.

Currency futures

The December Swiss franc [SFZ9>SFZ9] and Euro [ECZ9>ECZ9] were down today on a stronger U.S. stock market and European reports. The German and French economic reports that came out showed economic activity in Europe was less robust than expected.

There has been anticipation of a rate hike by the European Central Bank in the last couple of months, and these reports did not help that view. This put downward pressure in early trading, which was further exacerbated by a stronger stock market. We are still long, but our stops are very close.



Figure 1. December Swiss franc futures (SFZ9), 5-minute bar. Source: Quote.com.

Next update: Monday, October 25, 1999.

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