Worried Bulls May Lead S&Ps and Euros Look to Bounce Back After Weakness
| 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 | 1380 | 1400 | -$5000 |
| Sep. 99 Swiss franc | Long | .6530 | .6580 | $625 |
CURRENT POSITIONS (AS OF 7/9/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Sep. 99 T-bonds | – | Flat | – | – | – |
| Sep. 99 S&Ps | 7/9/99 | Short | 1412 | 1435 | – |
| Sep. 99 Swiss franc | 7/9/99 | Long | .6380 | .6300 | – |
Note: All price levels are approximate.
T-bond futures
The September futures [USU9>USU9] were little changed today after yesterday’s rally and remain range-bound. There were no reports today worth mentioning, but next week we will get the Producer Price Index (PPI) and Consumer Price Index (CPI) on Wednesday and Thursday, respectively. These will give further clues about the Fed’s next possible move. If they show unusual strength, the bonds could come under significant pressure as the bulls who bought on the Fed’s neutral comments last week re-evaluate the situation. No position.
S&P 500 futures
The September contract [SPU9>SPU9] rallied today on improved sentiment regarding current earnings releases. With bonds in a range, stock bulls are coming out again because they don’t have to worry about rising rates.
We established a short position today at the 1412 area, anticipating worried bulls will appear right before the PPI and CPI are released next week. Stops in around 1435.
 |
| Figure 1. September S&P futures (SPU9), 15-minute bar. Source: Quote.com.
|
Currency futures
The September Swiss franc [SFU9>SFU9] and Euro [ECU9>ECU9] fell slightly after initially trading higher earlier on comments from European Central Bank officials that the Euro is under-valued. But this support was short lived and the market used it as a selling opportunity.
Because pressure is mounting from the European Union members, we think there is a chance that the European Central Bank (ECB) will intervene. Because the market could not rally after the supportive comments, the next step is to put some real money behind it. We established a long position today around .6380 with stops in at the .6300 area. Stay tuned for profit target.
 |
| Figure 2. September Swiss franc futures (SFU9), 15-minute bar. Source: Quote.com.
|
Next scheduled update: Monday, July 12, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)