Bonds lower ahead of FOMC minutes

Financials: Mar. Bonds are currently 10 lower at 142’24 and Mar. 10-year Notes are 3 lower at 131’08.0. This morning: Jan. Housing Starts were down by 8.5% vs. expectations of -3.1%. PPI was up 0.2% vs. expectations of a rise of 0.5%. We were stopped out of any remaining long positions in Mar. Bonds from the 142’19 area when the markets traded through our protective sell stop at 143’06. Later today: Minutes from the last FOMC meeting. Support is currently 142’08 and resistance for the near term is at 144’06. I continue to have a long term bias to the short side of the market but feel this market is entering oversold territory. For the very short term I will be a buyer at support with a stop at 141’30. Next week I will be quoting and trading June contracts.

Grains: Mar. Corn is currently 2’2 higher at 697’4, Mar. Beans 17’2 higher at 1487’4, Mar. Wheat 3’2 higher at 735’4 and Dec. Wheat 2’4 higher at 765’6. We remain long out-of-the-money call spreads in Dec. Wheat. Yesterday through this morning Beans have experienced a nearly 50 cent rally on surprisingly strong demand from China. Support for Mar. Beans is currently 1452’0 and resistance 1500’0. Watch for news on S. American growing and harvest conditions. I am still interested in going long Mar. Corn in the 680’0-685’0 area or July Corn in the mid 650’s if the market allows. There is only one week until first notice day on Mar. contracts.

Cattle: Apr. LC are currently 25 lower at 129.25 and Mar. FC 65 lower at 142.52. Markets continue in a down trend. Treat Apr. LC as a trading affair between 127.50 and 130.50. Mar. FC should show support below the 140.00 level. One week until first notice day for Mar. contracts.

Silver: Mar. Silver is currently $0.35 lower at $29.06 and Apr. Gold is $14.00 lower at $1,590.00. We continue to hold a small long position in Silver. As has been recommended in the past, I like the idea of having Silver as an investment of 6-10% of an overall portfolio. At $29.00 a mini-Silver contract (1,000 ounces) has a value of $29,000.00.As for speculation: It’s time to start looking for buying opportunities if Silver trades below the 28.00 level. Apr. Gold is approaching support in the $1,580.00 area. If you are inclined to try to pick bottoms in this market use close stops.

S&Ps: Mar. S&Ps are currently 0.50 lower at 1527.50. For those of you keeping track: I have been stubbornly short futures and short the 1480 puts. Currently the loss on the futures is $1,700.00 and the profit on the short puts $300.00. I admit defeat for the moment and am liquidating the positions today. Support is currently 1513.00 and resistance 1530.00.

Currencies: As of this writing the Mar. Euro is 5 lower at 1.3385, the Swiss unchanged at 1.0836, the Yen 31 lower at 1.0673 and the Pound 94 lower at 1.5308/ If you remain short the Euro, lower your protective buy stop from the 1.3490 level to 1.3450. If the market trades below the 1.3310 level, lower your stop to 1.3410.

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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