Marc Nemenoff gives his readers an insight into the decision making process of a professional trader and analyst with 35+ years of market experience. He covers the markets with which he has had the best success throughout his career with. Contact Mr. Nemenoff at (312) 264-4310
Financials: Mar. Bonds are currently 9 lower at 147’06 and the 10 Yr. Note 2 lower at 132’14. We are currently on the sidelines. Given the uncertainty of new tax regulation, debt ceiling, budget and other components of the “fiscal cliff” coming in 5 days, I’m unwilling to predict direction in the short term. Every time I see the market have a substantial break I must remind myself of Fed policy to keep rates low throughout 2013-2014 and operation twist which will see the fed purchasing 40-85 billion dollars worth of 6-30 year treasuries over the next few months. For the long term I remain somewhat negative on Bonds and 10 Year Notes and will continue to be a seller when I see yields under the 2.65 rate for the 30 Year Bond and under 1.55% for the 10 Yr. Note.
Grains: Mar. Corn is currently 1’0 lower at 692’2, Mar. Beans 2’4 higher at 1421’0 and Mar. Wheat 6’0 lower at 768’4. We currently have no futures positions at this time. For those of you who have been in my recommended Mar. Corn 800’0/850’0 call spread, I have covered the short 850’0 call leg of the spread at 2’2 (currently at 1’4) leaving me long the 800’0 call. This spread was originally put on at 12’0. By covering the short 850’0 call at around 2 cents I have increased the original cost to 14’0. Admittedly the Corn needs quite a rally for us to break even, but we stand a better chance by being only long calls at this time. If you have a Jan. Bean position, it’s time to roll into the Mar. contract to avoid first notice day on Monday Dec. 31st.
Cattle: Feb. LC are currently 15 lower at 133.62 and Mar. FC 12 higher at 155.00. On Dec. 20th, the date of my last “Report”, Feb. LC were 134.25 and Mar. FC 155.90. I feel that the market at higher levels will meet consumer demand and will be willing to trade from the short side of the market on sharp rallies from present levels. Producers should take advantage of rallies and be looking for hedging opportunites on first quarter 2013 contracts.
Silver: Mar. Silver is currently 3 cents higher at 30.08 and Feb. Gold 2.00 dollars lower at 1657.00. We continue to hold a small long position in Mar. Silver as a long term position and strategically part of an overall investment portfolio. We were recently stopped out of long Gold positions from the 1672.00 area when the market traded below the 1648.00 level. I hesitate to even trade the metals for the rest of the year given the “Fiscall Cliff” uncertainty. As a market observer and strategist I must say that Gold technically looks negative and is currently trading below the 200 day moving average of 1661.30 and needs to trade and close above the 1678.00 level to generate even a minor buy signal.
S&P’s: Mar. S&P’s are currently 2.50 higher at 1416.00. As mentioned throughout this month, the market will move dramatically on “Fiscall Cliff” news, for example: Last Friday’s 50.00 point range of 1441.25-1391.25 as the market broke when the majority leader Boehner was unable to bring his bill to the Congressional floor with his party’s backing. As mentioned on Dec. 20th, my bias is once again negative. That being said, I’m heading for the sidelines as far as futures are concerned for the remaining few days of 2012. If you have a strong opinion on market direction consider using Jan. options which expire on Jan. 18th 2013.
Currencies: As of this writing the Mar. Euro is currently 60 higher at 1.3292, the Swiss 43 higher at 1.1012, the Yen 41 lower at 1.1648 and the Pound 33 higher at 1.6159. Last Week we went short the Euro above the 133.00 level with a recommended 150 point risk. In the interim the market traded as low as 1.3170. If you remain short either take the small profit or lower your protective stop to 1.3375. The Yen remains negatve having not only broken through the 200 day moving average (on Nov. 14th) it is now below the 200 week moving average of 1.1846. Long term support is 1.0800.
Questions? Ask Marc Nemenoff today at 312-264-4310
Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented is from sources believed to be reliable and all information is subject to change without notice.
SubscribeSign up to receive a daily summary of all PRICE | Market Insights blog posts