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The Nemenoff Report - ECB leaves rates unchanged, market awaits Draghi statements about possible quantitative easing

Marc Nemenoff I PRICE Group - ltfutures - 04.12.2014

Financials: Mar. Bonds are currently 8 higher at 141’16, 10 Yr. Notes 3 higher at 126’12 and 5 Yr. Notes 2 higher at 119’03. A couple of items this morning. Weekly jobless claims were down by 17k, in line with expectations of a 19k drop. The ECB left rates unchanged. It is expected that later this morning Mario Draghi will comment on Europe’s economy and suggest that if needed the ECB will take action to keep rates low in an attempt for stimulus. Earlier in the week we recommended going long Mar. Bonds in the 141’16 area. I am currently using a protective sell stop against this position at 140’18. If the market trades above 141’22, either take the small profit or raise your stop to the 141’04 area. Near term resistance is currently 142’27.

Grains: Mar. Corn is currently 2’6 higher at 384’6, Jan. Beans 6’6 higher at 1005’0 and Mar. Wheat. I am still overall negative on the Grains, but caution against selling breaks and suggest waiting for our price to sell into these markets. I will be a seller in Mar. Corn in the 395’0 area, Jan. Beans above 1025’0 and Mar. Wheat above 605’0.

Cattle: Feb. LC closed sharply lower at 166.75 and May FC also sharply lower at 232.70. We continue to have a short bias to these markets. If you remain long puts in LCG5 I suggest rolling them down to a lower strike price in an effort to bank some profits. If you remain short futures either take profits or use a protective buy stop at 168.30. If the market trades below 166.20 lower your stop by an appropriate amount. We continue to hold short biased positions in May FC. For those of you with a high risk tolerance, consider going long LC/short FC for a long term play.

Silver: Mar. Silver is currently 14 cents higher at 16.55 and Feb. Gold 1.00 higher at 12.09. We are now thinking about the long side on breaks, but still remain on the sidelines.

S&P's: Dec. S&P’s are currently 4.25 lower at 2068.25. Earlier in the week we were stopped out of recent short positions from the 2072.00 area when the market traded above the 2064.00 level after trading as low as 2050.00. I still like trading from the short side on rallies above the 2072.00 level.

Currencies: As of this writng the Mar. Euro si currently 92 higher at 1.2414 after making a new contract low of 1.2287. The market broke after the ECB left rates unchanged only to subsequently rally on statements made by Draghi commenting that the ECB will do whatever it takes to help stimulate the European economies. Contrary to conventional wisdom I am somewhat friendly to the Euro and remain a short term trader from the long side of the market. My thinking is: If QE worked so well for the dollar, why shouldn’t it start to work for the Euro and even the playing field so to speak, or at the very least temporarily stopped the slide against the dollar. I think today’s low will hold for the time being. A close above 1.2392 may be a key reversal.

Regards,
Marc

Marc Nemenoff
Senior Market Analyst, Price Futures Group
888.908.4310 | 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.

Disclaimer
Past performance is not indicative of future results. Investing in futures can involve substantial risk and is not for everyone.The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. TRADING IN FUTURES CONTRACTS, OPTIONS ON FUTURES CONTRACTS, AND FORWARD CONTRACTS IS NOT SUITABLE FOR ALL INVESTORS AND INVOLVES SUBSTANTIAL RISKS.