Financials:
Bonds are currently 13 higher at 120’29, however 9 lower since this time yesterday. This morning’s weekly unemployment report was about unchanged at 505K. Yesterday we were able to sell the Mar. 115’00 put at 1’03 or better leaving us with the combination of short Dec. Bonds and short the Mar. Bond 115’00 put. Keep in mind there are 7 trading days until you should roll your Dec. Bonds into the Mar. contract. On Nov. 30th, the Mar. contract will become the volume leader.
Grains:
Yesterday Beans were 2 lower, Corn 4 lower and Wheat 8 lower. Over night Beans were 7 lower, Corn 5 lower and Wheat 12 lower. The market is now quite a bit below yesterday’s intraday highs as the Dollar has rallied a bit and harvest pressure has come into play. Yesterday I recommended selling a combination of out of the money puts and calls in Mar. Beans. I recommend choosing strike prices about one dollar out of the money on each leg of this combination.
Cattle:
Yesterday Dec. Cattle closed 100 lower at 83.07. The long Dec. / short Apr. spread lost about 70 points closing at 480 premium the Apr. We continue to hold this spread. We also remain long Dec. Cattle from below the 83.80 level with a protective sell stop 300 points below our entry level.
Silver:
Dec. Silver is currently 3 cents higher at 18.45. We continue to hold out of the money call spreads in the July contract. A consecutive close above 18.40 will be a positive technical signal.
S&P's:
Dec. S&P’s are currently 8.25 lower at 1100.25. I remain on the sidelines. Near term support is currently 1086.00 and resistance 1111.00.
Currencies:
As of this writing the Dec. Euro is 70 lower at 1.4868, the Swiss 48 lower at .9840, the Yen 84 higher at 1.1262 and the Pound 90 lower at 1.6625. Against conventional wisdom, I continue to recommend being long puts and or put spreads in the currencies, preferably the Jan. or Mar. contracts. The Dec. Dollar Index is 21 higher at 75.47. I like the long side of this market on breaks. Support for the Dollar Index is currently 74.40 and resistance 76.50.
Regards,
Marc
Marc Nemenoff
PFGBEST Research Team
800.935.6496
mnemenoff@pfgbest.com
Marc Nemenoff is a 31-year veteran of the futures industry. While attending graduate school at the Illinois Institute of Technology, Marc took a job as a clerk on the trading floor of the Chicago Mercantile Exchange for Tabor Grain Co. He quickly found that his background in both math and problem solving techniques were adaptable to the futures markets as well as the career he had been pursuing in Architecture and Urban Planning. Having decided on a career change he quickly rose within the Tabor Grain Co. organization and became their analyst and operations manager for all products traded on the Chicago Mercantile Exchange.
In 1976 Mr. Nemenoff's responsibilities increased when he was granted full membership on the Chicago Mercantile Exchange as Tabor Grain Co's. representative to the exchange. He was their head analyst and liaison to all branch offices. In addition, he was in charge of designing hedging strategies in both the livestock and financial sectors of the market, and writing the firms daily and weekly market letters.
In 1980 Mr. Nemenoff purchased his own membership on the C.M.E. and spent the next 12 years as an independent trader, trading in all markets with a concentration in live cattle as a spreader and market maker. As a member of the exchange he served on many committees including, Live Cattle, Nominating, Contributions, Public Relations and Advertising, and Orientation and Education. During this time he gave speeches to various groups at the behest of the exchange. These included, Agricultural Bankers, The National Cattleman's Assoc., various groups on the Role of the Market Maker, and various groups on the Role of Futures as a Risk Management Tool.
In 1991 Marc left the floor and spent his time as an independent trader and lecturer giving speeches at seminars on various topics. These included Livestock Trading, Interest Rate Futures, Spreads, Technical Analysis, and trading in the pit vs. being an outside speculator. He also taught classes as a guest lecturer at the Chicago Mercantile Exchange on Spreading, Technical Analysis, and Commodity Options.
Mr. Nemenoff describes his approach to the market as 75% technical and 25% fundamental. He is also a firm believer in the use of option strategies as a way of using leverage and minimizing risk when one has a long-term market strategy.
Disclaimer
There is a substantial risk of loss in trading futures and options.
The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction
