Currencies whipsaw as G-7 tries to allay fears

Financials: Mar. Bonds are currently 17 lower at 142’23 and the 10 Yr. Note 7.5 lower at 131’06.5. If you went long in the 142’19 area I recommend using a protective sell stop in the 142’03 area. If the market trades above the 143’30 level either take the short term profit or raise your sell stop to your breakeven level. Resistance has been lowered to the 144’14 level for the short term.

Grains: Mar. Corn is currently 5’2 lower at 691’0, Mar. Beans 7’6 lower at 1413’0, Mar. Wheat 5’0 lower at 727’0 and Dec. Wheat 6’0 lower at 759’0. We remain long out-of-the-money call spreads in Dec. Wheat. Once again we are approaching long-term support in the 680’0-685’0 area in Mar. Corn where I will be willing to try the long side of the market with a 12’0 risk. I also feel it is time to start paying attention to Dec. Corn, which is approaching long term support in the 530’0 area.

Cattle: Apr. LC are currently 37 lower at 129.57 and Mar. FC 85 lower at 142.40 as these markets continue their recent price slide amid sluggish demand and weight heavy marketing. Hedgers who continue to hold the combination of short futures and long out-of-the-money call spreads should be looking to cover the short leg of their call spreads leaving you short futures and long out-of-the-money calls. The long call is meant to protect short hedges against any dramatic price increase and to have the ability to participate in any “chance” dramatic price increase.

Silver: Mar. Silver is currently $0.03 lower at $30.99 and Apr. Gold is $2.00 lower at $1,648.00. We continue to hold a small long position in Silver as part of an overall portfolio strategy. Gold remains in a downtrend with support in the $1,629.00 area and resistance now at $1,672.00 having been lowered from $1,688.00.

S&Ps: Mar. S&Ps are currently 2.25 higher at 1518.50 with the market making a new recent high earlier this morning at 1520.00. We remain short futures and short out-of-the-money puts as a partial hedge. Support is currently 1508.00 and resistance 1522.00 for the short term.

Currencies: As of this writing the Mar. Euro is currently 32 higher at 1.3478, the Swiss 5 higher at 1.0905, the Yen 5 lower at 1.0690 and the Pound 50 lower at 1.5600. These markets have been reacting both up and down with statements released as G-7 responds to recent slides in the Yen as the Bank of Japan tries to fight deflation by intervening against the Yen against the Dollar and the Euro. I’m sure when G-20 meets shortly we will see and hear more of the same. We were stopped out of any remaining short Euro positions when the market traded above the 1.3470 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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