Gold gaining luster with close above key level

Financials: Mar. Bonds are currently 1 lower at 144’26 and the 10-Year Note 2 lower at 131’21. Since Wednesday the market has traded through my recommended sell stop against current long positions at 144’30 putting us on the sidelines. My bias is now to the short side of the market on rallies above the 146’20 level if the market allows.

Grains: Mar. Corn is currently fractionally lower at 698’2, Mar. Beans 9’0 lower at 1470’4 and Mar. Wheat 3’0 higher at 747’4. We remain long the Mar. Corn 800’0 call. At 11:00am (Chicago time) we will have the monthly Crop Report. This January report has moved the market substantially in the last five-out-of-eight years in both directions

Cattle: Feb. LC are currently 30 lower at 131.25 and Mar. FC 57 lower at 152.35. LC are 120 lower and FC 265 lower since Wed. letter when I talkd about the possibility that these markets are technically putting in an interim top. I will be a seller in Feb. LC above 132.70 with an initial 200 point risk and a seller in Mar. FC above 154.25. Producers should be looking at rallies as hedging opportunities on Mar. Apr and May contracts.

Silver: Mar. Silver is currently 14 cents lower at $30.80 and Feb. Gold $5.00 lower at $1,673.00. We remain long Silver. Gold is at the upper end of recent trading activity and technically is starting to look more constructive seeing as we have now had a close above the $1,672.00 level. That being said, I’m not ready to just jump in on the long side of the market and will wait for breaks below the $1,657.00 level to try the market from the long side with a $10.00 risk. I think that global expectations of improving economic activity and the possibility of the Fed starting to back off from an active stimulus stance could temper long term bullishness.

S&Ps: Mar. S&Ps are currently 1.50 lower at 1465.50. We have now taken a short position in this market anticipating a correction off the current highs (1471.50 overnight) and resistance of 1474.75 established the week of Sept. 14, which was a high established on a nearby contract. I am currently using a protective buy stop in the 1480.00 area. Near term support is currently the 1447.00 area. If this level does not hold the next level will be the 1438.00 area.

Currencies: As of this writing the Mar. Euro is currently 94 higher at 1.3353, the Swiss 27 higher at 1.0970, the Yen 121 lower at 1.1225 and the Pound 10 lower at 1.6139. Needless to say the last two day break in the Yen was beyond my near tern downside objectives and the Yen now looks poised to test the 1.0800-1.1000 area. I will be willing to try the Yen from the long side on breaks below the 1.0875 level if the market allows. The Euro has rallied, particularly against the Yen as the Euro/Yen carry trade has somewhat collapsed. That being said the Euro is now above the 1.3260 level and my bias is now on the short side of the market on rallies. Long term resistance is now the 1.3522 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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