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S&P’s Rally, Grain Set Back. The Nemenoff Report 06/06/19


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Financials: Sept. Bonds are currently 5 higher at 1523’18, 10 Yr. Notes 1 higher at 127’00.5 and 5 Yr. Notes 0’00..50 lower at 117’22.0.Late last week President Trump announced a 5.00% tariff on goods imported from Mexico sending equities into a 2 day tailspin and treasuries to new recent highs in a flight to safety, stopping us out of short positions in both Bonds and 10 Yr. Note short positions. This rally steepened the yield curve with the 5 Yr. now 4 basis points premium to the 2 Yr. and the 2 YR. now 28 basis pts. below the 10 Yr. from up from 14 pts. Of note Fed. Member Bullard has stated that he thinks a rate cut is imminent. Ever the contrarian I’m still short the 5 Yr. Note and spread long Dec 19/short Dec. 20 Eurodollars which has moved 8 points in favor of the Dec. 19 contract. In essence, I’m taking Fed. Chairman Powell’s word that any action will be data dependent and so far the Data looks good. Unemployment Report tomorrow could change my thinking if numbers are extraordinarily disappointing.
Grains: July Corn is currently 7’2 lower at 407’4, Beans 11’4 lower at 858’2 and Wheat1’4 lower at 489’4. Now that Rain and Flooding seems to have peaked out farmers have once again been able to start returning to their fields and get back to planting. Most market participants feel the Corn crop will see diminishing yields and that the total crop could be as low as 12.6 billion bushels, well behind recent crops of 14+ billion bushels. To be honest I am hesitant to predict a price for new crop other than to speculate that new crop prices will be higher than old crop, hence, we remain long Dec./short July Corn from 16’4 premium the Dec. (now at 18’6).
Cattle: Live and Feeder Cattle have continued to work sideways to slightly high in a still predominately down trending market. During the last week we reinstated the short Aug. 102 put position at 145 points or better, currently at 180. I will look to take profits below 100 points. Lower feed prices should give these markets a boost.
Silver: July Silver is currently 17.5 cents higher at 14.97, up 55 cents for the week. I remain long. I suggest raising protective sell stops on additional contracts recently purchased from 13.88 to 14.23.
S&P’s: June S&P’s are currently 8.50 higher at 2836.25. The market has shrugged off the Mexican tariff news and has had a tremendous rally. I am looking to go short with a protective buy stop at 2862.00 and a downside objective of 2780.00
Currencies: I am on the sidelines.

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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