Watch for Rally In Euro and S-franc
| PREVIOUS POSITIONS | ||||
|---|---|---|---|---|
| Market |
Long/Short |
Enter | size=2 color=000000>Exit | size=2 color=000000>P/L (per contract) |
| Sep. 99 T- bonds | Short | 114-05 | 113-09 | -$875 |
| Sep. 99 S&Ps | short | 1380 | 1400 | -$5000 |
| Sep. 99 Swiss franc | Long | .6530 | .6580 | $625 |
CURRENT POSITIONS (AS OF 7/2/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Sep. 99 T-bonds | 6/30/99 | Short | 115-23 | 116-21 | 115-06 |
| Sep. 99 S&Ps | – | Flat | – | – | – |
| Sep. 99 Swiss franc | – | Flat | – | – | – |
Note: All price levels are approximate.
T-bond futures
The September futures [USU9>USU9] did not react much to the employment report today, which came in very close to the expected figure. Bonds sold off slightly after the release but quickly bounced back.
This type of price action is likely to continue in the near term as investors ponder the Fed’s next move. The Fed will raise rates again if we get more economic reports indicating inflationary pressures. We will try to cover our position at the 115 06/32 area in the next session.
 |
| Figure 1. September T-bond futures (USU9), 15-minute bar. Source: Quote.com.
|
S&P 500 futures
The September contract [SPU9>SPU9] rallied again today. We exited our position as the market has been
much stronger than expected. The neutral employment report let the market
focus on earnings, which has given the bulls more incentive to buy stocks.
We will go to the sidelines for now and wait for the next opportunity.
 |
| 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] moved little today after yesterday’s big decline. Interest rate differences between Euro deposits and dollar
deposits continue to boost the dollar. Further, the market is looking
at possible future U.S. rate hikes.
The market is heavily short at the
moment and I expect some short-covering in the next session or two as
stops are activated. We will look to sell into this rally. Stay tuned.
Next scheduled update: Wednesday, July 7, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)