Rates are Going Up and So are Commodity Prices

Top Day Rec

06.05

Unemployment release today. Quantum change is possible. Best not to have much risk on the table. Extrication from a bad position can be inelegant if not bloody.

Unemployment is expected to come in at a 25 year high. It did at 9.4% while job loss was lee at -345K. Initial reaction is equities and commodities higher and interest rates higher as well.

Markets traded lightly ahead of the release with one exception: rates are backing up. The advance in the yield of the 10 year is almost that of the advance in crude oil.

Jun 01	08:30	Personal Income	Apr	0.5%	-0.2%	-0.2%	-0.2%	-0.3%
Jun 01	08:30	Personal Spending	Apr	-0.1%	-0.3%	-0.2%	-0.3%	-0.2%
Jun 01	10:00	Construction Spending	Apr		-1.2%	-0.8%	0.3%
Jun 01	10:00	ISM Index	May		41.0	42.0	40.1
Jun 02	10:00	Pending Home Sales	Apr		NA	NA	3.2%
Jun 02	14:00	Auto Sales	May		NA	NA	3.2M
Jun 02	14:00	Truck Sales	May		NA	NA	3.8M
Jun 03	08:15	ADP Employment Change	May		-520K	-543K	-491K
Jun 03	10:00	Factory Orders	Apr		0.5%	0.3%	-0.9%
Jun 03	10:00	ISM Services	May		45.0	45.0	43.7
Jun 03	10:30	Crude Inventories	05/29		NA	NA	-5.41M
Jun 04	08:30	Initial Claims	05/30		610K	620K	623K
Jun 04	08:30	Productivity-Rev.	Q1		1.4%	1.2%	0.8%
Jun 04	08:30	Unit Labor Costs	Q1		2.7%	2.9%	3.3%
Jun 05	08:30	Average Workweek	May		33.2	33.2	33.2
Jun 05	08:30	Hourly Earnings	May		0.2%	0.2%	0.1%
Jun 05	08:30	Nonfarm Payrolls	May		-525K	-550K	-539K
Jun 05	08:30	Unemployment Rate	May		9.2%	9.2%	8.9%
Jun 05	14:00	Consumer Credit	Apr		-$6.0B	-$6.0B	-$11.1B

Current views, speculations and suggestions

(good till close of business today)

June Yen: neg as long as it trades lower than 103.50 with an obj of 102.80

June Swiss: neg as long as it’s lower than 93.45 with an obj of 93.00

June EC: pos as long as it trades above 141.65 with an obj of 142.63

June Canadian: pos as long as it trades above 90.75 with an obj of 91.90

June BP: neg as long as it trades below 162.20 with an obj of 160.00

June ES: pos as long as it trades below 937.00 with an obj of 950.00

June NQ: pos as long as it trades above 1487.00 with an obj of 1500.00

June Mini Dow: pos as long as it trades above 8700 with an obj of 8790

Aug Gold: pos as long as it trades above 976 with an obj of 989

July Silver: pos as long as it trades above 15.60 with an obj of 16.20

July crude: pos as long as it trades above 68.10 with an obj of 70.30.

July Soybeans: pos as long as it trades above 12.13 with an obj of 12.45

July Wheat: pos as long as it trades above than 6.306 with an obj 6.47

Sept Ten Year: neg as long as it trades below 115.10 with an obj of 113.28

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International Markets

Sept Bund: neg as long as it trades below above 118.70 with an obj of 117.75

June Dax: pos as long as it trades above 5080 with a obj of 5117

NK: pos as long as it trades above 9740 with an obj of 9850

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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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HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, AL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETIOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.