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Financials: Sept. Bonds are currently 2 ticks higher at 143’18, 10 Yr. Notes unchanged at 119’19.5 and 5 Yr. Notes 0.2 lower at 113’08.2. The possibility of a “Trade War” as proposed tariffs by the U.S. and the probability of retaliatory tariffs by China, Russia and et.al helped lift Treasuries of all maturities. The market also awaits an imminent decision on oil production which should have a short-term effect on rates. For the near term we remain long out of the money puts on the 10 Yr. Note (preferably the 117’00 strike price currently at 7/64ths).
Grains: Sept. Corn is currently 1’2 higher at 365’0, Beans 2’0 lower at 898’2 and Wheat 2’0 higher at 501’4. This week saw the market plunge as traders and funds liquidated long positions in the face of expectations of China placing tariffs on various agricultural products in response to the U.S. instituting tariffs on Chinese products. Add to the mix, a more hawkish than expected FOMC comments on rates caused a rally in the Dollar which has a negative effect on exports. We tried buying an early break in Corn and Beans only to be stopped out with a 10 cent loss in Corn and 25 cent loss in Beans. I am on the sidelines.
Cattle: Live and Feeder Cattle had a relatively uneventful week being range bound and gaining slightly. As mentioned in last weeks’ “Report” I wanted to cover short positions on June Cattle under the 106.50 level (the market traded as low as 105.50) which put us on the sidelines. I remain negative for the near term and look to go short Aug. Live Cattle in the 108.00 area.
Silver: Sept. Silver is currently 6 cents lower at 16.32. Needless to say I am disappointed with this latest break from last weeks’ 17.50 level as this market gave ground from the pressure of a stronger Dollar. I remain long a small position.
S&P’s: Sept. S&P’s are currently 1.00 lower at 2771.00. I am on the sidelines. As I suffer from “shortitis” the market is acting differently giving the various sectors. As an example the Dow has closed lower the last 6 days as the NASDQ 100 has made new all time highs.
Currencies: As of this writing the Sept. Euro is 41 lower at 1.16215, the Yen 12 lower at 0.91025, the Pound 30 higher at 1.3269 and the Dollar Index 24.4 higher at 94.460. We were stopped out with 100+ losses on long Euro, long Pound and short Dollar Index positions. I am on the sidelines.