Bonds Remain Good as Summer Swoon Begins in the Equities

Written by Al Martin Sunday, 15 June 2014 23:25

(6-15-14)  We’re now trading the Sep. Spoos on the short side. We’ll be coming into Monday’s session still short from 1930 and looking for a test down to 1910 in the coming week’s trade. We continue to trade the Sep. Long Bonds from the long side, consistently buying at 135.16, selling on our standing orders at 136.00 and getting short again at 136.04 or better. This trade is consistently working. We continue to like the trade between 135.50 and 136.25.

Read more: Bonds Remain Good as Summer Swoon Begins in the Equities

 

ECB Action Creates Fresh Trading Opportunities

Written by Al Martin Sunday, 08 June 2014 21:20

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(6-8-14) Mario Draghi foot-dragging appears to be at an end, despite speculation to the contrary, creating good two-way action in the June Euro futures. You wanted to be short the futures going into the Draghi speak as we were. Initial reaction gave us a chance to sell the June futures at 1.3620 or better. A great shorting opportunity on the test down at the 1.3500 level, then the bounce on the short covering reversal. We shorted the Euros again for the second time at 1.3665. We think this is money in the bank, as we believe that the Euros will come down for a second test of the 1.35 area in the coming week’s trade.

Good action in the June Long Bonds on both sides. We were short sellers on our standing orders at 136.We were able to take a half point out on the short side. We think that the Bonds should be shorted again on any move back to 136.00.

Good shorting action seen in the July Crude Oil. We were selling the Oil again on moves at 103.30 in line with our previous suggestions, covering on 50 cent dips. We have standing sell orders in the Oil at 103.25.

Short covering seen late week in the Aug. Gold contract off the hold at the 1242 area. However we think this area is shortable. We were sellers again at 1258. We think that any moves back to retest 1260 are shortable.

July Sugar -- under continued late week liquidation. Again we had sold the Sugar away in the 17.30 area, in line with our previous suggestions. We were able to take a half a penny out of it by end of week trade. With fresh Sugar supplies coming to market despite Brazilian drought, we still believe 16.60 is in the cards for the July contract.

July Juice – running out of steam in the 1.6 area. We were short sellers at 1.6420. We’re going to hold on to the Juice and wait for a retest of the 1.60 area.

July Lumber – in line with our previous predictions has come down for a hard test of 300 after failing to hold the 320 area. We think the July Lumber should be shorted again on any bounce back to 311 or better.

Action in the Grains – good shorting opportunities once again in the July Beans on the second failure at 15.00. We were sellers again at 14.93, covering m.o.c. Friday at 14.58. We continue to think the Beans should be shorted on moves above 14.80. Good test of the July Wheat in the $6 area.  Given Friday’s bounce we think the Wheat is shortable again in the 618 – 620 area. July Corn also should be shorted on a retest back to the 4.65 or higher area.

We had warned that the July Cotton would give up recent gains. Indeed we saw the July Cotton give up 2 cents on the week. We had been short from 86.70 and were able to cover on our standing orders at 84.70 in Friday’s session. We think the Cotton is coming back down for a test of 83.50 area.

July Cocoa moved above 3100 – finally -- as shorts got blown out bringing in fresh CLP buying just above 3100. Our standing contingent order selling 10 Cocoa at 3103 covering at 3073 in Friday’s trade. We think any move back to 3100 in the Cocoa should be shorted.

July Coffee -- still holding the 1.67 area lows. We were short sellers again on the close at 1.72 in Friday’s trade and would be looking to take a nickel out of the position in the coming week’s trade.

We had warned of severe overvaluation in the July Copper contract. Indeed we saw the Copper give up more than 10 cents on the week. A hard test of the 3.03 area has been accomplished. We think any return back for a test of 3.10 should be shorted.

July Silver – we are consistently selling the Silver in the 19.12 area, covering on 25 cent dips. We think the Silver should be sold on any moves above 19.10.

We had also warned of overvaluation in the July Platinum contract. Indeed we saw the Platinum under pressure in late week trade. We would be looking to sell the Platinum again on any moves back to 1470, covering on a $20 dip.

 

Continue to Trade the Long Bonds from the Long Side on Dips, as Gold Remains a Sell

Written by Al Martin Sunday, 01 June 2014 22:43

(6-1-14) Once again we were buyers of the June Long Bonds on our standing order three times midweek at 138.01. We were able to take a quarter point out of the Bonds each time although the Bonds are now looking tired in the 138.16 or better area. Continue to buy them on dips down to 137.24 till the tapes tell you otherwise.

Read more: Continue to Trade the Long Bonds from the Long Side on Dips, as Gold Remains a Sell

 

Reduction in 'Fear Bid' Favorable for the Spoos

Written by Al Martin Sunday, 25 May 2014 23:01

 (5-25-14) It now appears that the elections in Ukraine over this weekend are going off without a hitch. The inability of Gold to rally in Friday’s trade combined with the Spoos hanging on to their gains would suggest that the Spoos will make a move early week above 1900. Bond action continues to remain firm. We were consistently buying the June Bonds on our standing order at 136.16 three times in late week trade, selling them at 136.24 and finally at 137.00 on the close Friday. Bonds continue to act well as European junk yields continue to decline. We will continue to trade the Bonds on the long side on dips down to 136.16. Watch the action in the Euros. All rallies now in the Euros have become fresh shorting opportunities, as it is likely that Mario Draghi foot-dragging will end this month with some fresh easing by the ECB, taking Euros likely down for test of the 132 area.

Read more: Reduction in 'Fear Bid' Favorable for the Spoos

 

Continue to Play the 'Overvaluation Trade'

Written by Al Martin Sunday, 18 May 2014 22:04

(5-18-14) We continue to trade the June Long Bonds from the long side. We were buyers once again in early Friday session on our standing orders at 137.13 which we were able to get out on the midday lift back to 137.22. Bonds came down to session lows in late action. We would look to be a buyer of the Bonds again on any test at 137.00.  The US Treasuries are the key indicator of the current speculative bubble on the planet. Watch to see if the 10-year yields drop below the magic 2.40 % yield and watch for any increase in yields in Euro-junk sovereign debt, i.e. Greek, Portuguese and Irish.

Read more: Continue to Play the 'Overvaluation Trade'

 

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