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Treasuries Rally, Equities Slump. The Nemenoff Report 05/30/19


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Financials: June Bonds are currently 13 points lower at 152’11, 10 Yr. Notes 8 lower at 125’12 and 5 Yr. Notes 5 lower at 116’16.5. We are still at a loss on short positions in Treasuries as these markets have been in risk off mode as equities work lower over Trade War fears and investors have sought the safety of U.S. treasuries. Of note the yield spread between the 2 Yr. and 5 Yr. is now negative with the 2 Yr. yielding 5+ basis pts. over the 5 Yr. Also of note is that the spread in yield between the 3 month and 30 yr. is close to inverting with the3  month close to surpassing the 30 Yr. Bond in yield. If this happens for an extended period of time it could signal a recession. It is time to roll positions into Sept. I will use protective buy stops just above recent high in Sept. Bonds at 152’23.
Grains: July Corn is currently 4’4 higher at 423’2, Beans 2’2 higher 874’2 and Wheat 5’4 higher at 496’4. Continued wet weather and flooding has delayed planting in central states causing worry over yields and fear that late planting will switch from Corn to Beans producing a significant rally in Corn because of lowered production estimates. Last week we tried the short side of July Corn. If you were nimble there was opportunity for an 8 cent profit. I am now recommending putting on the long new crop (Dec.)/ short old crop (July) Corn spread around 17 cents premium the Dec.
Cattle: Live Cattle has rallied over the last partial due to a somewhat friendly Cattle on Feed Report which showed an increase in Placements of 7.0% far below the trade estimate of 13.0%. Feeder Cattle prices continued to work lower as a result of sharp increases in feed grain prices. We have covered the short Aug.LC 102 put position. I still feel this market is headed sideways and I’m in stand aside mode. That being said, I will resell the Aug.LC 102 above 140 points should the opportunity arise.
Silver: July Silver is currently 1 cent higher at 14.42. We remain long with a protective sell stop at 13.80 on recently purchased additional contracts.
S&P’s: June S&P’s are currently 10.00 higher at 2790.00 down sharply over the last week due to fears of a trade war with China. Treat as a trading market between 2765 and 2825.00
Currencies: We have been stopped out of short positions in the Dollar Index in the 98.20 area and ae currently on the sidelines in all currencies.

Regards,
Marc
 



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About the author


Mr. Nemenoff is a 37-year veteran of the futures industry. While attending graduate school at the Illinois Institute of Technology, Marc began his career as a clerk on the trading floor of the Chicago Mercantile Exchange.

Marc Nemenoff 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 CME 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 & Advertising, and Orientation & 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 is also the 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.

Contact Marc Nemenoff: (800) 769-7021 or at mnemenoff@pricegroup.com

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