Bonds lie low ahead of Fed announcement tomorrow

Financials: Mar. Bonds are currently 5 higher at 143’26 and the 10-Year Note 3.5 higher at 131’10.5. Today begins a two-day FOMC meeting. At this time I do not expect any change in near term Fed policy. What could possibly change is the long term policy of quantitative easing, which has been predicted to last through at least late 2014, early 2015. I will be on the sidelines until tomorrow afternoon after the Fed announcements.

Grains: Mar. Corn is currently 2’4 higher at 731’6, Mar. Beans 3’6 higher at 1451’4, Mar. Wheat 1’6 higher at 781’2 and Dec. Wheat 2’0 higher at 816’2. My bias remains to the long side of Mar. Corn on breaks to the 712’0 area. Near-term resistance remains in the 734’0 area and then 740’0. A close above 740’0 may be considered an upside breakout with the potential of a rally to the 765’0 level. I still like out-of-the-money call spreads in Dec. Wheat as a long term trade.

Cattle: Apr. LC are currently 35 lower at 133.05 and Mar. FC 55 lower at 149.35 after closing sharply higher (150+ points) in response to Friday’s Cattle on Feed Report. We are currently on the sidelines as far as speculative positions are concerned. Short hedgers who are short futures and long out-of-the-money calls may consider either taking profits on the calls in Feeder Cattle or selling further out of the money calls (at least 2 strike prices) to take advantage of the recent upswing in Feeder Cattle prices.

Silver: Mar. Silver is currently $0.32 higher at $31.11 and Apr. Gold is $9.50 higher at $1,664.50. We remain long Silver. If you went long Gold yesterday below the $1,657.00 level, then either take profits or raise your protective sell stop to your breakeven level. Near term resistance is the $1,674.00 level. Longer term resistance is the $1,690.00 level. Technically, the market is in a short term downtrend and trading below the 200-day moving average of $1,668.00.

S&Ps: Mar. S&Ps are currently 4.00 lower at at 1493.00. Support is currently 1483.00 and resistance the 1502.00-1507.00 area. We continue to hold a small short position.

Currencies: As of this writing the Mar. Euro is currently 10 lower at 1.3450, the Swiss 24 higher at 1.0826, the Yen 17 higher at 1.1040 and the Pound 35 higher at 1.5727. I am currently on the sidelines. Levels to watch: Long term support of 1.0800 in the Yen and long term resistance of 1.3500 in the Euro.

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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