Bonds see continued downtrend, selling opportunities

Financials: March Bonds are currently higher at 145’09 and the 10 Yr. Notes are higher at 131’29.5. Nothing much to report on the fundamentals this morning as the market awaits tomorrow’s Weekly Initial Jobless Claims and Capacity Utilization reports. If you remain long Bonds from the 144’20 area either take profits or raise your protective sell stop to the 144’30 level from the 144’08 level. I feel that the long term trend has turned down and I will be looking to sell sharp rallies above the 146’20 level if the market allows. One of the indicators I use for long term trades is the 200-day moving average for lead month contracts. This average is currently at 147’25 and was penetrated to the downside with the Dec. 31 close of 147’16.

Grains: March Corn is currently fractionally lower at 688’4, March Beans 1’0 higher at 1387’4 and March Wheat 1’6 higher at 752’2. Users of Corn, such as livestock producers, should consider covering their short term needs on this current break in the market. As for speculation, I prefer to wait on the sidelines until Friday’s crop report. Support for March Corn is currently the 660’0-670’0 area.

Cattle: Feb. LC are currently 5 lower at 132.47 and March FC unchanged at 155.00. I am currently on the sidelines awaiting confirmation of a possible top. As I have mentioned over the last couple of weeks, producers should be looking for hedging opportunities by either using futures or option strategies.

Silver: March Silver is currently 3 cents lower at $30.45 and Feb. Gold 1.00 higher at $1,663.00. We continue to remain long a small amount of Silver as part of an overall portfolio strategy. I remain on the sidelines in Gold. Current support in Gold is the $1,630.00 area and resistance remains above the $1,670.00 level. A close above the $1,672.00 level will be considered constructive.

S&Ps: March S&Ps are currently 3.00 higher at 1455.25. This market warrants close attention at current prices as the market approaches heavy resistance in the 1460.00-1475.00 area. The recent high for a long term contract was 1474.75 made the week of Sept. 14, 2012. The last time the market was at this level was January 2008. To put things in perspective, the market was trading in the 1574.00 area in March of 2000. The other side of the coin: The market made a low of 665.75 in September 2009. Basically the market is down 6.0% over the last 12 years and up 115.0% over the last 3.5 years. For the near-term, I will be a seller on rallies with a stop above the 1577.00 level. Support is currently 1438.00 for the near-term.

Currencies: As of this writing the March Euro is currently 42 lower at 1.3049, the Swiss is 36 lower at 1.0798, the Yen is 60 lower at 1.1414 and the Pound is 52 lower at 1.6002. I remain negative for the long term on both the Euro and the Yen. That being said, my near-term down side objectives have been met and we have covered all short-biased positions. I will be looking to reinstate short Euro positions above the 1.3260 level and short Yen positions above the 1.1750 level.

About the Author
Marc Nemenoff

Mr. Nemenoff is a 40-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. Over the years he grew to become an independent member of the exchange and spent many years as a trader, market maker, lecturer, and committee member. Since 2004 Marc has been a senior broker and analyst handling customer accounts for both speculators and hedgers in addition to institutional traders. Marc is also the author of The Nemenoff Report, a daily overview of the markets that includes his own perspective on market direction. Mr. Nemenoff describes his approach to the market as 75% technical and 25% fundamental and 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. You can contact Marc by phone at (888) 908-4310 or by email at mnemenoff@pricegroup.com. Learn even more on our website at www.pricegroup.com.

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.

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