Cattle look for support from weather impact

Financials: Mar. Bonds are currently 14 lower at 145’13 and the 10-Year Note is 6.5 lower at 131’30.0. If you remain short, either take profits or lower your protective buy stop to the 145’24 if you were not stopped out late last week. Now that the Inauguration is behind us and the government gets back to business as usual, I expect there to be quite a bit of rhetoric from both sides of the aisle concerning the debt ceiling and the budget. Expect the debt ceiling to be raised and contentious talk on the budget. For the near term I still see this market as a trading affair between the 144’12 and 146’20 areas.

Grains: Mar. Corn is currently 5’0 higher at 732’6, Mar. Beans 16’2 higher at 1445’4 and Mar. Wheat 5’6 higher at 797’0. Support for Mar. Corn is currently 712’0 and resistance the 740’0 area. Long-term traders might consider buying out-of-the-money call spreads in Dec. Wheat. As for Corn, continue to treat as a trading market between support and resistance. Beans look technically constructive for the Mar. contract with support about $0.30 under the market and resistance in the 1475’0-1500’0 range. Keep in mind that contract highs for this market is above the 1720’0 level and that the market has been declining since mid- September.

Cattle: Feb. LC settled Friday at 124.65 sharply lower and Mar. FC 50 higher at 146.35. I am currently looking to the long side of these markets and expect weather to have an impact to the upside over the next couple of sessions. Over the last few weeks the cash market has broken about $5.00 on the perception of consumer resistance to high prices despite somewhat tight supplies. Starting tomorrow I will be quoting the Apr. contract and recommend this as your trading vehicle.

Silver: Mar. Silver is currently $0.04 higher at $31.97 and Feb. Gold unchanged at $1.686.00. We remain long Silver.

S&Ps: Mar. S&Ps are currently 1.50 lower at 1477.50. We were stopped out of recent short positions above the 1480.00 area. On Friday the market established a new multi-year high trading through the Sept. high of 1474.75. Over the weekend the market established another new benchmark with the futures trading on a new high at 1484.25. That being said I am still looking for a downside correction, however, I recommend that if you trade from the short side that you reduce your position size (if your usual trading unit is multiple contracts). Support is currently 1462.00 and resistance is at the contract high of 1484.25.

Currencies: As of this writing the Mar. euro is currently 2 lower at 1.3323, the Swiss 64 higher at 1.0765, the yen 136 higher at 1.1247 and the pound 2 higher at 1.5861. If you remain short the euro, either take profits or lower your protective buy stop to the 1.3365 level from 1.3390. I still expect an upside correction in the yen and will try the long side on a sharp break if the market allows with a protective sell stop in the 1.1050 area.

Financials: Mar. Bonds are currently 14 lower at 145’13 and the 10-Year Note is 6.5 lower at 131’30.0. If you remain short, either take profits or lower your protective buy stop to the 145’24 if you were not stopped out late last week. Now that the Inauguration is behind us and the government gets back to business as usual, I expect there to be quite a bit of rhetoric from both sides of the aisle concerning the debt ceiling and the budget. Expect the debt ceiling to be raised and contentious talk on the budget. For the near term I still see this market as a trading affair between the 144’12 and 146’20 areas.

Grains: Mar. Corn is currently 5’0 higher at 732’6, Mar. Beans 16’2 higher at 1445’4 and Mar. Wheat 5’6 higher at 797’0. Support for Mar. Corn is currently 712’0 and resistance the 740’0 area. Long-term traders might consider buying out-of-the-money call spreads in Dec. Wheat. As for Corn, continue to treat as a trading market between support and resistance. Beans look technically constructive for the Mar. contract with support about $0.30 under the market and resistance in the 1475’0-1500’0 range. Keep in mind that contract highs for this market is above the 1720’0 level and that the market has been declining since mid- September.

Cattle: Feb. LC settled Friday at 124.65 sharply lower and Mar. FC 50 higher at 146.35. I am currently looking to the long side of these markets and expect weather to have an impact to the upside over the next couple of sessions. Over the last few weeks the cash market has broken about $5.00 on the perception of consumer resistance to high prices despite somewhat tight supplies. Starting tomorrow I will be quoting the Apr. contract and recommend this as your trading vehicle.

Silver: Mar. Silver is currently $0.04 higher at $31.97 and Feb. Gold unchanged at $1.686.00. We remain long Silver.

S&Ps: Mar. S&Ps are currently 1.50 lower at 1477.50. We were stopped out of recent short positions above the 1480.00 area. On Friday the market established a new multi-year high trading through the Sept. high of 1474.75. Over the weekend the market established another new benchmark with the futures trading on a new high at 1484.25. That being said I am still looking for a downside correction, however, I recommend that if you trade from the short side that you reduce your position size (if your usual trading unit is multiple contracts). Support is currently 1462.00 and resistance is at the contract high of 1484.25.

Currencies: As of this writing the Mar. euro is currently 2 lower at 1.3323, the Swiss 64 higher at 1.0765, the yen 136 higher at 1.1247 and the pound 2 higher at 1.5861. If you remain short the euro, either take profits or lower your protective buy stop to the 1.3365 level from 1.3390. I still expect an upside correction in the yen and will try the long side on a sharp break if the market allows with a protective sell stop in the 1.1050 area.

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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