S&P Rally Poises Us For A Solid Down Move
T-bond futures
June futures [USM9>USM9] ended the day flat. Friday’s employment report provided a sigh of relief
for the market, and we exited our longs at the 120 26/32 level after nearly
liquidating the trade for a small loss.
The next report of interest (Producer Price Index) isn’t due until Friday,
and bonds probably will trade sideways until then. Tomorrow we will attempt to short any rally above the 121 10/32 level in the last hour of trading.
Currency futures
The June ECU [ECM9>ECM9] and [SFM9>SFM9] both dropped today. Fears over the Balkan situation and expectations for interest rate cuts by the European Central Bank put pressure on all the European currencies.
The yen [JMY9>JYM9] was weakened by the Japanese Finance minister’s remarks favoring a weaker Yen. All this has proved bullish for the dollar, but
we are still on the sidelines as we see no trade yet.
S&P 500 futures
The June [SPM9>SPM9] contract rallied strongly today on Friday’s employment report and positive remarks on Internet stocks by some big brokerage houses. Tomorrow we will look to short this market if we get another rally, as we believe the S&Ps will
continue to trade erratically. The volatility patterns right now
indicate that there will be a good down trade, possibly in the next couple
of days.
Next scheduled update: Wednesday, April 7, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)