Mar. Bonds are currently 2 higher at 121’22. We continue to hold the combination of short Mar. Bonds and short the Mar. Bond 115’00 put. Yesterday the market closed about 1’00 lower and has now established resistance in the 122’26 area. Near term support is currently 120’16. This Friday, Dec. 4th, we will have the Monthly Unemployment Report.
Grains:
Yesterday Beans were 1 cent lower, Corn 3 lower and Wheat 4 lower. Over night Beans were 4 lower, Corn 1 lower and Wheat 1 lower. Yesterday’s lower close came after the market traded higher most of the session before breaking to lower ground in the last hour of the session. The market has now established some near term resistance: Mar. Beans at 1075’0, Mar Corn at 422’0 and Mar. Wheat at 600’0. We continue to hold the combination of short out of the money puts and calls in Mar. Beans. The recommended position was short the Mar. Beans 960’0 put and short the Mar. Beans 1160’0 call for a total of 60’0 cents (currently at 50’0).
Cattle:
Yesterday Dec. Cattle closed 65 lower at 82.55. We remain long from the 83.80 level and are currently using a protective sell stop at 80.80. We also remain spread long Dec./ short Apr. which closed at 510 premium the Apr. This spread is currently losing 200 points. I will make a decision by Friday whether to keep this position. Please note that Monday, Dec. 7th is first notice day for deliveries. I recommend rolling Dec. positions into Feb. on Friday to avoid a delivery situation.
Silver:
Mar. Silver is currently 12 cents higher at 19.33. Yesterday the market gave the opportunity to roll the long side of out of the money call spreads into a higher strike price and “take some money off the table”. Example: If you were long the July 20.00 call and short the 22.00 call, we sold the 20.00 call and simultaneously bought the 21.00 call, leaving you with the 21.00/ 22.00 call spread. I am staying away from futures positions at this time as I feel this market is trading higher on momentum instead of supply/demand fundamentals and to be honest fear a corrective set back.
S&P's:
Dec. S&P’s are currently 1.00 higher at 1109.50. I am on the sidelines. My only recommendation is to consider buying out of the money puts as portfolio insurance.
Currencies:
As of this writing the Dec. Euro is 11 lower at 1.5083, the Swiss 4 lower at 1.0009, the Yen 67 lower at 1.1473 and the Pound 29 higher at 1.6668. I remain long out of the money puts in the currencies. The Dec. Dollar Index is currently 7 higher at 74.48. The 74.40 are in the Dollar Index continues to hold. Short term traders might consider going long with a protective sell stop just below yesterday’s low of 74.210.
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.
