Gold breaks lower, searching for support at $1,629

Financials: Mar. Bonds are currently 3 lower at 143’19 and the 10 Yr. Notes 3 lower at 131’20.5. Continue to treat as a trading affair between 142’19 and 145’24. My bias remains negative for the long term.

Grains: Mar. Corn is currently 2’0 lower at 707’0, Mar. Beans 15’0 lower at 1437’4, Mar. Wheat 2’4 lower at 753’4 and Dec. Wheat 4’0 lower at 780’4. Since Friday’s supply/demand report these markets have broken $0.14 in Corn, $0.55 in Beans and $0.14 in Wheat from intraday highs. From Thursday’s close Corn is down $0.03, Beans down $0.50 and Wheat down $0.03. We have been stopped out of any remaining long positions in Mar. Corn purchased between 707’0-712’0 when the market traded through our sell stops at our breakeven point. We remain long out of the money call spreads in Dec. Wheat.

Cattle: Apr. LC closed 140 lower at 130.12 and Mar. FC 220 lower at 145.00 on Friday as the Dollar strengthened and demand remained sluggish. I am on the sidelines as far as speculative positions are concerned. A note to short hedgers in FC. For those of you who are short futures and long call spreads, consider covering the short leg of your call spreads which have declined in premium given the break in Feeder prices over the last week.

Silver: Mar. Silver is currently $0.41 lower at $31.04 and April Gold is $20.00 lower at $1,646.00. Gold has broken out of its recent $1,657.00-$1,688.00 trading range. I look for the next level of support to be the $1,629.00 level. As I have mentioned over the last few weeks, looking objectively at the daily charts I can’t as yet be bullish on Gold.

S&Ps: Mar. S&Ps are currently 0.25 higher at 1512.75. I am still stubbornly short this market and must admit that I have certainly lost my objectively. Today I am going to take a defensive strategy and sell an out-of-the-money put against my position. Every now and then I must remind myself of the trading adage “Do you want to be right or do you want to make money?”

Currencies: As of this writing the Mar. Euro is currently 28 lower at 1.3382, the Swiss 12 lower at 1.0895, the Yen 52 lower at 1.0725 and the Pound 109 lower at 1.5685. If you took Thursday’s recommendation and sold the Euro on a stop at 1.3450 close only (the market closed that day at 1.3407) either take profit or use a protective buy stop in the 1.3465 area if you remain short. Should the Euro trade below the 1.3345 level, lower your stop to your breakeven 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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