T-bonds and Euro Currencies Good Longs
| PREVIOUS POSITIONS | ||||||
|---|---|---|---|---|---|---|
| Market | Long/Short | Entry | Exit | P/L (per contract) | ||
| June T-bonds | Short | 118 5/32 | 118 5/32 | – | ||
| June S&Ps | Long | 1312 | 1285 | -$6,750 | ||
| June Swiss franc | Long | .6600 | .6640 | $500 | ||
| CURRENT POSITIONS (as of 5/28/99) | ||||
|---|---|---|---|---|
| Market | Long/Short | Entry | Stop | Target |
| June T-bonds | Long | 117 14/32 | 116 15/32 | 118 |
| June S&Ps | Flat | – | – | – |
| June Swiss franc | Long | .6555 | .6500 | .6575 |
Note: All price levels are approximate.
S&P 500 futures
The June contract [SPM9>SPM9] rallied moderately today. We were stopped out on our longs from yesterday. With no follow through, this market has proved to be especially difficult for the last couple of days. We are on the sidelines for now.
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| Figure 1. June S&P futures (USM9), 30-minute bar. Source: Quote.com.
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T-bond futures
The June futures [USM9>USM9] rallied briefly this morning after the Chicago Purchasing Managers report was weaker than expected. But the rally was just an excuse for the bears to sell. Earlier, the Commerce Department’s report on personal income and spending came in stronger than expected (bearish). The market sold off just briefly, though.
In summary, we feel the market is temporarily oversold as bearish sentiment is getting overblown. Furthermore, the technicals tell us there is a good chance of a small rally early next week. We went long at the 117 14/32 area with stops in at the 116 15/32 area. We will try to exit at the 118 area.
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| Figure 2. June T-bond futures (SFM9), 5-minute bar. Source: Quote.com.
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Currency futures
The June Swiss franc [SFM9>SFM9] dropped today on comments that the European central bankers are finally starting to get worried about the Euro’s decline.
This gave the market a reason to sell more currencies against the dollar. These comments, however, are usually a good opportunity to go the other way. We went long at the .6555 area with stops in at the 6500 area and a profit target around .6575.
Next scheduled update: Wednesday, June 2, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)
