Higher T-Notes Rates Might Dampen the Overall Market Sentiments

Top Day Rec

05.08.09

Stress tests have come and gone, for now. 19 banks need to raise 75 billion. This probably wasn’t the biggest development of the day, however. It was the poor reception to yesterday’s auction. The yield on the 10 year note has gone from 2.5% to 3.3% even with the Fed buying its own paper. Remember, this is a period of record supply of debt. If rates continue higher, the negative effect on the economy will be a herbicide to the emerging green shoots of this fragile economy. Rates are even higher this morning while equities are higher on the idea that the jobs number will be better than feared and in line with the ADP forecast.

  

May 04	10:00	Construction Spending	Mar		NA	-1.4%	-0.9%
May 04	10:00	Pending Home Sales	Mar		NA	0.0%	2.1%
May 05	10:00	ISM Services	Apr		NA	42.0	40.8
May 06	08:15	ADP Employment Change	Apr		NA	-643K	-742K
May 06	10:30	Crude Inventories	05/01		NA	NA	+4053K
May 07	08:30	Initial Claims	05/02		NA	NA	NA
May 07	08:30	Productivity-Prel	Q1		NA	0.9%	-0.4%
May 07	08:30	Unit Labor Costs	Q1		NA	2.5%	5.7%
May 07	15:00	Consumer Credit	Mar		NA	-$3.3B	-$7.5B
May 08	08:30	Average Workweek	Apr		NA	33.2	33.2
May 08	08:30	Hourly Earnings	Apr		NA	0.2%	0.2%
May 08	08:30	Nonfarm Payrolls	Apr		NA	-620K	-663K
May 08	08:30	Unemployment Rate	Apr		NA	8.9%	8.5%
May 08	10:00	Wholesale Inventories	Mar		NA	-1.0%	-1.5%

   

Current views, speculations and suggestions

 

June Yen: neg with res at 101.65  

June Swiss: positive with support at 87.72

June EC: positive with support at 132.70   

June Canadian: positive with support at 85.25

June BP:  pos with support at 148.90.     

June ES: positive with support at 893.50

June NQ: positive with support at 1368.50

June Russell: positive with support at 483.00   

June Mini Dow: positive with support at 8280

Jun Gold: positive with support at 905    

July Silver: pos with support at 13.75

June crude: positive with support at 55.50         

July Soybeans: positive with support at 10.87

July Wheat: positive with support at 5.57

June Ten Year: positive with support at 119.09       

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International Markets

June Bund: neg with res at 121.78        

June Dax: pos with support at 4740

NK: pos with support of 9196

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N.B.: if you initiate a trade using any of these numbers use a stop at least equivalent to 2 ½%. Repeat: use stops.  Don’t think about using stops. Use stops.   

  

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Futures trading entails considerable risk and is not for everyone. An account can lose more than its initial investment. Stops are not necessarily filled at the stop level. Past performance is not a guarantee of future results.

 

Charles Kespert

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