Bonds are currently 12 higher from Friday’s close at 120’16, the 10 Yr. Notes 8 higher at 118’26, the 5 Yr. Notes 5 higher at 116’10 and the 2 Yr. Notes 1 higher at 108’20. We continue to remain short the Dec. Bonds. Late last week we covered the short Dec. Bond 116’00 put at 15 points. I continue to feel that interest rates are headed a bit higher over the next few months. I also continue to question whether China, Japan and Europe will continue financing U.S. debt at their current pace. I would be interested in hearing your comments, feel free to e-mail me.
Grains:
Yesterday Beans were 35 cents higher, Corn 19 higher and Wheat 26 higher. Over night Beans were 7 higher, Corn 1 lower and Wheat 1 higher. We have taken profits in Wheat. Yesterday the market gave the opportunity for those of you with call spreads to roll long calls with a strike price below the 380’0 level into the 380’0 strike price leaving us spread long the 380’0 and short the 400’0. If you are outright long calls, look to take profits, my near term objectives have been reached in Dec. Corn.
Cattle:
Yesterday Dec. Cattle closed 35 higher at 85.30. The long Dec./short Apr. spread gained 12 points closing at 310 premium the Apr. We continue to hold this spread from the 300 level premium the Apr. (currently a 10 point loss).
Silver:
Dec. Silver is currently 3 cents lower at 17.78. We remain long this market. The next level of resistance is the 18.20-18.40 level. Over night the market made a new recent high of 18.06.
S&P's:
Dec. S&P’s are currently 3.00 lower at 1068.50. We continue to remain short futures and/or long out of the money puts as both portfolio insurance and speculative positions. Yesterday the market made a new inter-day high of 1076.25 which will now be near term resistance. Support is currently at 1054.00 for the near term.
Currencies:
As of this writing the Dec. Euro is 13 higher at 1.4800, the Swiss 14 higher at .9767, the Yen 5 higher at 1.1147 and the Pound 8 higher at 1.5796. We remain long out of the money puts in the Yen and long out of the money puts and/or put spreads in the Pound. If the Pound trades below the 1.5500 level this week, I recommend taking profits on all put spreads. If you are just long out of the money puts in the Pound either take profits if the futures trade below 1.5500 or roll your position down to the 1.5200 strike price. The Dec. Dollar Index is currently 13 lower at 76.16.
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.
