Bonds rally after jobs number misses expectations

Financials: June Bonds are currently 1’13 higher at 147’24 and the 10 Yr. Notes 11.5 higher at 133’06.5. This morning the Monthly Unemployment Report showed an increase in non-farm payrolls of 88,000 vs. expectations of 200,000. Needless to say the market took this in a negative way for equities and bullish for Bonds. Yesterday morning the Bonds rallied on news of the Bank of Japan doing their version of Quantitative Easing in an attempt to force Japanese rates lower and induce some inflation in the hopes that they will end a decade-long period of deflation. This put the bonds up 3’00 full points in the last week. I am now willing to trade the market from the short side on rallies approaching the 148’00 level. I am also willing to do the long 10 Yr. Note/ short Bond spread near the 15’00 level (currently at 14’15.0)

Grains: May Corn is currently 1’0 higher at 631’0, May Beans 14’0 lower at 1358’0 and May Wheat 2’2 lower at 691’6. Yesterday we were stopped out of a recent long May Corn position when the market traded through the 632’0 level. We are back on the sidelines until next week.

Cattle: June LC is currently 12 higher at 122.47 and May FC unchanged at 145.95. We are currently on the sidelines having taken profits earlier in the week from any remaining long positions.

Silver: May Silver is currently 23 cents higher at 27.00 and June Gold 13.00 dollars higher at 1565.00. We will continue to hold a small long position in Silver. June Gold failed to hold the 1555.00 level earlier in the week trading as low as 1540.00. Major support is now the 1525.00-1529.00 area, coinciding with lows made in December 2011 and May 2012. I will be a buyer in this area with a 10.00 risk if the market allows.

S&Ps: June S&P’s are currently 19.00 lower at 1535.50. We currently have on the combination of short futures and short the June 1500 put and will stay with this position for the time being. Support is currently the 1525.00 to 1529.00 area. I believe that this is just mere coincidence that support is the same levels as June Gold.

Currencies: As of this writing the June Euro is currently 52 higher at 1.2996, the Swiss 46 higher at 1.0697, the Yen 38 lower at 1.0368 and the Pound 51 higher 1.5281. Needless to say yesterday’s action by the Bank of Japan was negative for the yen. By instituting a quantitative easing program they are in essence greatly increasing their money supply and devaluing their currency. The initial reaction was a break of about 100 points in the Euro and nearly 400 points in the Yen. Since the early morning lows (yesterday) the Euro has recovered and gained on the Yen by about 250 points. I have been recommending of late to go short the Euro on a sharp rally and use a protective buy stop just above the 1.3100 area. The June Dollar Index is currently 15 lower at 82.640.

Financials: June Bonds are currently 1’13 higher at 147’24 and the 10 Yr. Notes 11.5 higher at 133’06.5. This morning the Monthly Unemployment Report showed an increase in non-farm payrolls of 88,000 vs. expectations of 200,000. Needless to say the market took this in a negative way for equities and bullish for Bonds. Yesterday morning the Bonds rallied on news of the Bank of Japan doing their version of Quantitative Easing in an atempt to force Japanese rates lower and induce some inflation in the hopes that they will end a decade long period of deflation. This put the bonds up 3’00 full points in the last week. I am now willing to trade the market from the short side on rallies approaching the 148’00 level. I am also willing to do the long 10 Yr. Note/ short Bond spread near the 15’00 level (currently at 14’15.0)

Grains: May Corn is currently 1’0 higher at 631’0, May Beans 14’0 lower at 1358’0 and May Wheat 2’2 lower at 691’6. Yesterday we were stopped out of a recent long May Corn position when the market traded through the 632’0 level. We are back on the sidelines until next week.

Cattle: June LC is currently 12 higher at 122.47 and May FC unchanged at 145.95. We are currently on the sidelines having taken profits earlier in the week from any remaining long positions.

Silver: May Silver is currently 23 cents higher at 27.00 and June Gold 13.00 dollars higher at 1565.00. We will continue to hold a small long position in Silver. June Gold failed to hold the 1555.00 level earlier in the week trading as low as 1540.00. Major support is now the 1525.00-1529.00 area, coinciding with lows made in December 2011 and May 2012. I will be a buyer in this area with a 10.00 risk if the market allows.

S&P's: June S&P’s are currently 19.00 lower at 1535.50. We currently have on the combination of short futures and short the June 1500 put and will stay with this position for the time being. Support is currently the 1525.00 to 1529.00 area. I believe that this is just mere coincidence that support is the same levels as June Gold.

Currencies: As of this writing the June Euro is currently 52 higher at 1.2996, the Swiss 46 higher at 1.0697, the Yen 38 lower at 1.0368 and the Pound 51 higher 1.5281. Needless to say yesterday’s action by the Bank of Japan was negative for the yen. By instituting a quantitative easing program they are in essence greatly increasing their money supply and devaluing their currency. The initial reaction was a break of about 100 points in the Euro and nearly 400 points in the Yen. Since the early morning lows (yesterday) the Euro has recovered and gained on the Yen by about 250 points. I have been recommending of late to go short the Euro on a sharp rally and use a protective buy stop just above the 1.3100 area. The June Dollar Index is currently 15 lower at 82.640.

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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