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Could Dollar Index have more of an upside corrective bounce within the long-term downtrend?

Financials: As of this writing (6:30am) June Bonds are 3 higher overnight at 158’09 up 1’05 for the week, 10 Year Notes up 8 overnight at 132’25 and up 13for the week and 5 Year notes up 6 at 124’04 4 higher for the week. Yields were down slightly for the week with 2 year flat at 14 basis points, the 5 year flat at 0.76, the 10 year down 7 basis points at 1.50% and the 30year bond down 10 at 2.23. This reflects yesterday’s 10 year auction which had an average yield of 1.5132 % which was below expectations of 1.523. Also the CPI came in lower than expected (less inflation than expectations). My bias for the last few weeks has been the long side of the market, I now want to return to a neutral position at current levels with expectations of a sideways trend between 157’00 and 161’99 for the bonds. I will look to the short side of the market if bonds trade above 161’00.

Grains: May Corn is currently 3 cents higher at 537’0 which is 2 cents lower for the week. May Beans are up 2 cents at 1411’0, but down 44 cents since my last “Report” on March 5th. The market had a negative response to Tuesday’s ending stocks and S/D report which showed ending stocks higher than expectations. The prediction of rain in Argentina also added to the sell off. Trends remain up and I will be a buyer on any further breaks. I suggest watching Nov. Beans in the 1220-1225 area.

Cattle: Apr.LC closed 87 lower yesterday at 118.77 up 22 for the week. Mar. FC were 95 lower at 136.20 up 10 for the week. Starting this week I am switching my concentration from Mar. FC to the Apr. contract which closed 35 lower at 141.72. I still remain negative nearby contracts and will note poor reaction to yesterday’s break in Corn which should have been friendly to LC and FC. That being said remain bullish deferred contracts. I still like the long Aug. LC/ short Apr.LC spread with an objective even money.

Silver: May Silver is currently 18 cents higher at 26.31 up1.91 for the week. This market held support just below 25.00 and now technically projects to 27.40 on the upside.

S&P: June S&P’s are currently 27.00 higher at 3914.00 up 152.00 for the week. I feel there will be a test of recent highs in the 3945.00 area.

Currencies: The June Euro is currently 38 higher at 1.1985 up 18 for the week, the Yen 13 higher at O.9221 down 28 for the week, the Pound up 16 this morning at 1.3953 up 1.28 for the week and the Dollar Index down 26 at 91.62 down 30 for the week. I still feel that the Dollar Index might have more of an upside corrective bounce within the long term downtrend. I remain on the sidelines awaiting opportunity to reinstate Short biased D.I. Positions above the 92.50 level.

Author

Marc Nemenoff

Marc Nemenoff

PRICE Futures Group

Mr. Nemenoff is a 37-year veteran of the futures industry.

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