Watch S&P Closely for Sell-off
| CURRENT POSITIONS (As of 4/26/99) | ||||
|---|---|---|---|---|
| Market | Long/Short | Entry | Stop | Target |
| June T-bonds | Flat | – | – | – |
| June S&Ps | Short | 1365 | 1390 | 1355 |
| June Swiss franc | Long | .6660 | .6600 | .6669 |
Note: All price levels are approximate.
S&P 500 futures
The June S&P [SPM9>SPM9] rallied 6.4 points today. Tech stocks drove the Nasdaq much higher. We are still short; the probability of a sell-off tomorrow is better than average.
We will try to cover our shorts at the 1355 level, again with stops at the 1390 level. The fact that T-bonds bounced back today could work against our position because a bond rally will boost the S&Ps. Stay tuned as we might adjust our trade tomorrow if we don’t get our exit price by the close.
Figure 1. June S&P futures (USM9), 15-minute bar. Source: Quote.com.
Currency futures
The June Swiss franc [SFM9>SFM9] and Euro [ECM9>ECM9] both fell slightly on the day. The German finance minister’s comments regarding on the Euro/dollar exchange rate (he expressed no concern about the recent Euro sell-off) dampened the rally we were looking for in the franc.
I still believe we can get a small rally from here as the G-7 finance ministers meet to talk about their economic policies. I think we will get some short-covering as the meeting approaches. We will try to exit at the .6669 level in the June franc with our stops still at the 6600 level.
Figure 1. June Swiss franc futures (SFM9), 15-minute bar. Source: Quote.com.
T-bond futures
The June futures [USM9>USM9] rallied 12 ticks today. The morning sell-off reversed as reports of short-covering by hedge funds gave the market some support. Further, there are some reports of interest coming out later this week and many investors are waiting before making any decisions. We remain on the sidelines.
Next scheduled update: Wednesday, April 28, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)