Shorts and Covering As Greenspan Prepares Testimony
| 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 | 1429 | 1410 | $4750 |
| Sep. 99 Swiss franc | Long | .6380 | .6390 | $125 |
CURRENT POSITIONS (AS OF 7/21/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Sep. 99 T-bonds | 7/19/99 | Short | 117-05 | 118-05 | 116-28 |
| Sep. 99 S&Ps | 7/22/99 | Long | 1370 | – | – |
| Sep. 99 Swiss franc | 7/21/99 | Short | .6590 | .6690 | – |
Note: All price levels are approximate.
T-bond futures
The September futures [USU9>USU9] fell slightly today after rallying this morning on the housing starts report. The market used the rally as a selling opportunity as it gets ready for Greenspan’s Humphrey-Hawkins testimony tomorrow. Also, a story in the Washington Post suggested the Fed governors disagree on whether or not to raise rates again. We will try to cover our shorts at the 116 28/32 area because of Greenspan’s testimony tomorrow.
 |
| Figure 1. September T-bond futures (USU9), 15-minute bar. Source: Quote.com.
|
S&P 500 futures
We covered our short position in the September contract [SPU9>SPU9] yesterday on the open around 1410. Volatility picked up, as we expected. The momentum players used the good earnings reports as an excuse to sell.
We have now moved to the sidelines. We should get another trade opportunity soon with Greenspan ready to testify and more earnings reports coming out. Stay tuned.
Update: A new long position was established at 1370 on 7/22/99. Check back on 7/23/99 for details.
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| Figure 2. September S&P futures (SPU9), 15-minute bar. Source: Quote.com.
|
Currency futures
The September Swiss franc [SFU9>SFU9] and Euro [ECU9>ECU9] rallied again today on further stop-loss buying by funds. The IFO index on the German economy came in much stronger than expected, which caused the market to reassess the weakness of the Euroland economy.
However, we think the market has become extended on the upside and we went short the franc at the .6590 area. The excessive triggering of buy stops should start to wane and the market has a good chance of pulling back. Our stop is in at the .6690 area. Check back for the profit target.
Next scheduled update: Friday, July 23, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)