The Nemenoff Report - Bonds Lower, Grains Higher, S&P's Higher
Marc Nemenoff I PRICE Group - 03 March 2010
Financials: June Bonds are currently 8 lower at 11703. Resistance remains in the 11800 area. I still recommend the short side of this market. If you establish a short position, consider selling an out of the money put three strike prices below the market as a way of collecting some premium and also providing some protection against adverse price movement. The Greek debt situation and their ability to roll over some 20 Billion Dollars worth of debt instruments in the coming months will no doubt have an effect on both the Bonds and the Currencies.
Grains: Yesterday May Beans closed 1 cent higher, Corn fractionally lower and Wheat fractionally lower. Over night Beans were 5 higher, Corn 2 higher and Wheat 2 higher. The market is a bit higher due to a weak Dollar this morning, some minor concerns over S. American crops and some concern over higher than average moisture in planting areas here in the U.S. I continue to like the long side of the market on breaks for the short term. Longer term I feel the direction of the Dollar will be a dominant factor, and for the moment that is an unknown (the predominant trend at the moment is for a higher Dollar). The May Beans 8800/10000 strangle is currently at 280. I will take profits (buy the 8800 put and buy the 10000 call) at 210 this week if the market allows.
Cattle: Yesterday Apr. Cattle closed 105 higher at 92.77. We have been stopped out of any remaining short positions as the market has traded above our break even level. As mentioned yesterday I expect there to be quite a bit of rolling of long positions out of the Apr. and intro the Jun. and Aug. Yesterday open interest in Apr. declined by 4,000+ while June gained 900+ and Aug. gained 3,000+. Also of note: Overall open interest is at near record levels as the market is trading at/near recent highs. Commodity funds have been noted buyers over the last few sessions. I am not ready to go long at present levels, but will be watching for a buying opportunity on a sharp break.
Silver: May Silver is currently 14 cents higher at 17.21. If you are long multiple contracts (I am on the sidelines in futures) I recommend taking at least partial profits. We remain long out of the money call spreads on the July contract.
S&Ps: Mar. S&Ps are currently 2.00 higher at 1119.50. We have covered all short futures positions and remain on the sidelines. I continue to recommend being long out of the money puts as portfolio insurance.
Currencies: As of this writing the Mar. Euro is 45 higher at 1.3645, the Swiss 29 higher at .9325, the Yen 12 lower at 1.1268 and the Pound 104 higher at 1.5052. I feel the Euro is in an oversold situation at the moment and has the ability to rally back to the 1.38 level. I will be a seller in the Jun. Euro above 1.3800 if the market allows. I continue to recommend being long either out right puts or put spreads in the Jun. Yen. The Mar. Dollar Index is currently 25 lower at 80.32. Starting on Monday I will consider June the lead contract.
Regards,
Marc
Marc Nemenoff
312.264.4310
mnemenoff@pricegroup.com
www.pricegroup.com
Bio
Marc Nemenoff is a 37-year veteran of the futures industry. While attending graduate school at the Illinois Institute of Technology, Marc took a job as a clerk on the trading floor of the Chicago Mercantile Exchange for Tabor Grain Co. He quickly found that his background in both math and problem solving techniques were adaptable to the futures markets as well as the career he had been pursuing in Architecture and Urban Planning. Having decided on a career change he quickly rose within the Tabor Grain Co. organization and became their analyst and operations manager for all products traded on the Chicago Mercantile Exchange.
In 1976 Mr. Nemenoff's responsibilities increased when he was granted full membership on the Chicago Mercantile Exchange as Tabor Grain Co's. representative to the exchange. He was their head analyst and liaison to all branch offices. In addition, he was in charge of designing hedging strategies in both the livestock and financial sectors of the market, and writing the firms daily and weekly market letters.
In 1980 Mr. Nemenoff purchased his own membership on the C.M.E. and spent the next 12 years as an independent trader, trading in all markets with a concentration in live cattle as a spreader and market maker. As a member of the exchange he served on many committees including, Live Cattle, Nominating, Contributions, Public Relations and Advertising, and Orientation and Education. During this time he gave speeches to various groups at the behest of the exchange. These included, Agricultural Bankers, The National Cattleman's Assoc., various groups on the Role of the Market Maker, and various groups on the Role of Futures as a Risk Management Tool.
In 1991 Marc left the floor and spent his time as an independent trader and lecturer giving speeches at seminars on various topics. These included Livestock Trading, Interest Rate Futures, Spreads, Technical Analysis, and trading in the pit vs. being an outside speculator. He also taught classes as a guest lecturer at the Chicago Mercantile Exchange on Spreading, Technical Analysis, and Commodity Options.
Since 2004 Marc has been an Associated Person handling customer accounts for both speculators and hedgers. Marc has also been author of the Nemenoff Report, a daily overview of the markets adding his own perspective on market direction.
Since 2002 Marc has been a Board member of Art Encounter, an Evanston, IL.. non- profit organization, specializing in the visual arts and providing community outreach programs, such as art classes for people of all ages with special needs. Marc has been President of Art Encounter since 2009.
Mr. Nemenoff describes his approach to the market as 75% technical and 25% fundamental. He is also a firm believer in the use of option strategies as a way of using leverage and minimizing risk when one has a long-term market strategy.
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