Try to Exit Positions Today
| PREVIOUS POSITIONS | ||||
|---|---|---|---|---|
| Market |
Long/Short |
Enter | size=2 color=000000>Exit | size=2 color=000000>P/L (per contract) |
| Sep. 99 T- bonds | Long | 115 | 115-07 | $218.75 |
| Sep. 99 S&Ps | Short | 1429 | 1410 | $4750 |
| Sep. 99 Swiss franc | Short | .6590 | .6585 | $62.50 |
CURRENT POSITIONS (AS OF 8/11/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Sep. 99 T-bonds | 8/10/99 | Long | 113-19 | 113-00 | 114-02 |
| Sep. 99 S&Ps | 8/10/99 | Long | 1285 | 1262 | 1309 |
| Sep. 99 Swiss franc | 8/10/99 | Long | .6710 | .6630 | .6705 |
Note: All price levels are approximate.
T-bond futures
The September futures [USU9>USU9] found some support yesterday at the 113 07/32 area. We established our longs at the 113 19/32 area (see yesterday’s update). There is a good probability the bonds have factored in a rate increase on August 24 (the Fed Fund futures show this).
These two factors compelled us to take a long position. The treasury sold 12 billion worth of 10 year notes and had to pay 6.08% interest on them. This was a little better (lower) than expected (6.10%). The market rallied a little off this news.
The govt. also released the Beige Book, which showed no commodity price pressure but did show continued economic strength. This means the economy continues to grow without price increase pressures. Bonds rallied a little off the report in relief that no new statements were made by the Fed concerning their outlook. We will try to exit our “relief” longs at the 114 02/32 area.
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| Figure 1. September T-bond futures (USU9), 10-minute bar. Source: FutureSource.
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S&P 500 futures
The September contract [SPU9>SPU9] had a major bounce yesterday off its lows. We were waiting for a pullback in the afternoon to get long but never got the chance. We finally capitulated and went long on the close (see yesterday’s update). The VIX was signaling too much fear in too short a period of time. We will be quick to take a profit on this trade because we need further confirmation this is not just a rally in a downtrend. We will try to exit our longs at the 1309 area starting tonight on the Globex after-hours session
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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] dropped a little lower today on a report from Germany that stated industrial production was lower in June from the previous month. In addition, the bounce in the U.S. stock market gave some support to the U.S. dollar. These two factors worked against our longs. Our exit point is now at the .6705 area.
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| Figure 3. September Swiss franc futures (SFU9), 15-minute bar. Source: Quote.com.
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Next scheduled update: Friday, August 13, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)