Marc Nemenoff
PRICE Futures Group
Financials: Mar. Bonds are currently 8 higher at 145'26, 10 Yr. Notes 6 higher at 121'29.0 and 5 Yr. Notes 4.25 higher 114'16.5. The yield curve continued to narrow this week as the yield between the 2 Yr. and the 5 Yr. is now even after going negative for a "heartbeat" earlier in the week. The 2&5 Yr. yield against the 10m Yr. narrowed a few basis points to about 16 premium the 10 yr. Even the 10 Yr. against the 30 Yr. narrowed to about 29 basis points premium the 30 Yr. Bond as the 30 YR. yield dipped below 3.0%. Personally I think the spreads in yield should begin to widen a bit but am only jumping into these waters with Eurodollar spreads which are not as volatile as longer dated treasuries as evidenced by the initial margin of under $200.00. A week ago I recommended the long June2019/short Dec 2019 Eurodollar spread at 4 points premium the Dec. We were able to put it on a 5 pts. and if you tripped on the way to the phone to place an order you probably would have been filled between 8-11 points premium the Dec. Yesterday that spread traded at 0.5 points and this morning is trading at 3.5. My objective is for the trade premium the June by 5-10 points.
Grains: Mar. Corn is currently unchanged at 382'0, Mar. Beans 1'0 lower at 923'0 and Mar. Wheat 1'2 lower at 518'6. We were stopped out of short Corn positions from above the 382'0 level when the market traded through my recommended protective stop of 380'4. I do not see much to do in these markets.
Cattle: Both Live and Feeder Cattle are about 200 points higher in the last week. June LC made a new recent high of 125.47 before backing off to current levels of 124.80. I remain short from 122.50.
Silver: Mar. Silver is currently about unchanged at 15.73 and up- about 5 cents for the week. As expected the market ran into resistance in the 15.78-15.90 area, actually topping out at 15.93. I remain long and will raise my protective stop to 1.38 now that the market has traded above 15.78 (see "report" dated 1/3/2019)
S&P's: Mar. S&P's are currently 12.00 lower at 2570.00. Last weeks' stated support and resistance of 24.50 and 2515.00 were both hit with support being met first and resistance handily being penetrated as the market has since traded as high as 2596.00. I am now recommending once again buying out of the money puts and/or put spreads.
Currencies: As of this writing the Mar. Euro is 13 lower at 1.15965, the Yen 8 higher at 0.92930, the Pound 44 lower 1.2795 and the Dollar Index 9.5 higher at 94.885. I remain long the Yen and short the Dollar Index (these are treated as two independent positions and not a spread). For the week the Yen is 29 lower and the Dollar Index 34 points lower.
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