Marc Nemenoff
PRICE Futures Group
GDP better than expected at +4.0%. Bonds sell off, equities rally. New recent lows in the Euro.
Financials: Sept. Bonds are currently 16 lower at 138’14, 10 Yr. Notes 13 lower at 124’31 and 5 Yr. Notes 9 lower at 118’28’. GDP for 2nd quarter was up 4.0% better than the expected +3.0%. 1st quarter was revised to -2.1%. ADP private sector jobs report showed an estimated increase of 218K vs. a pre-report estimate of 238k. Later today will FOMC announcement on interest rates, which I expect to be unchanged. We remain spread long 10 Yr./short Bond which is currently at 13’13 premium the Bonds, down about 5 points from yesterday’s 13’18. Support for the Bonds is currently the 137’18 level and resistance remains in the 139’08 area. I am a seller on sharp rallies for short term trades.
Grains: Dec. Corn is currently 2’4 lower at 368’4, Nov. Beans 7’6 lower at 1087’2 and Dec. Wheat fractionally lower at 534’4. We remain long Dec. Corn with a protective sell stop at 363’2. Nov. Beans still need to hold the 1055’0 level for me to be convinced a bottom is being formed. Stay tuned.
Cattle: Aug. LC are currently 97 higher at 159.75 and Aug. FC 115 higher at 222.57. I must say that Monday’s action (Aug. LC traded lower) wasurprise to me given the Cattle on Feed Report and premium of cash to futures. The early call had been sharply higher and the market only opened moderately higher. As I mentioned in Monday’s, let’s look around for “what’s cheap”. The Oct. LC 144 puts are around 35 points ($140).
Silver: Sept. Silver is currently 10 cents higher at 20.68 and Dec. Gold 1.00 higher at 1301.00. We remain long Silver. If you remain long Gold either take profits or raise your protective sell stop to 1294.00.
S&P's: Sept. S&P’s are currently 8.00 higher at 1971.00. We continue to hold a combination of short futures and short the Sept. 1900 puts.
Currencies: As of this writing the sept. Euro is on a new low for 2014 at 1.3376, down 35 points. We continue to hold short biased positions. European and U.S. sanctions against Russia continue to weigh on economic prospects in Europe. My next objective is the 1.3200 area.
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