Marc Nemenoff
PRICE Futures Group
Weekly Jobless Claims up 21K vs. expectations of down 3k. Key reversal in Cattle.
Financials: Mar. Bonds are currently 12 higher at 141’30, 10 Yr. Notes 6 higher at 126’21.5 and 5 Yr. Notes 2.5 higher at 119’07.5. We are now quoting the March contracts which are trading at 1’14 discount to the Dec. Weekly Jobless Claims were higher than expected being up by 21,000 vs. expectations of a decline of 3,000. We are still pretty much on the sidelines only looking for short term trades. Of note: the Dec. contract is now above our previously stated resistance of 142’28 indicating that the Bonds could once again be breaking out to the upside. Given the thin trade over the next few days I recommend the sidelines. The anticipated range for the Mar. contract for the near term is 140’28 to 143’12.
Grains: Mar. Corn is currently 1’6 higher at 389’0, Jan. Beans 2’6 lower at 1048’4 and Mar. Wheat 4’6 higher at 562’4. I am a seller in Mar. Corn above 395’0 and a seller in Jan. Beans above 1078’0.
Cattle: Feb. LC closed 77 higher at 170.80 and May FC 137 lower at 230.25. Monday’s action after the Friday’s Cattle on Feed Report left a technical key reversal on the lead month Dec. contract. Needless to say this has happened several times over the past 12-18 months, however, discipline dictates it needs paying attention to . On Monday we recommended out of the money puts in both Live and Feeder Cattle. If you bought puts in Feeders not too far out of the money, either take profits or roll down to a lower strike price. For short term trading I will be on the sell side of Feb. LC above the 171.80 level. Support is currently below the 167.00 level.
Silver: Mar. Silver is currently unchanged at 16.62 and Feb. Gold 1.00 lower at 1197.00. I remain on the sidelines.
S&P's: Dec. S&P’s are currently fractionally lower at 20.67. We remain sellers in the 2072.00 area for short term trades with a 5.00 risk. Markets will be thin today and Friday, you might want to stand aside.
Currencies: I remain on the sidelines as all my downside objectives have been met on the Euro and Yen, and upside objective on the Dollar Index as well. Next week we will be switching to March contracts.
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