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Debt: TBill rates have dropped by only .25, not enough to fuel a major
rally. Fed Funds Jun-Dec futures spread (attached) appears to be
completing a 5th wave decline with little more than a quarter point Fed
Funds increase priced into the market through year-end - rebound to half
point increase appears likely which will put pressure on equities and
short end of yield curve. Like equities, bonds (10's and 30's) have
labored hard to breakout above recent highs - looking tired with not
much more upside. Another market likely to remain in a trading range
96-99 for the 30.
Currency: US$ decline has been long and steep without a significant
retracement - some support at 105 which could/should give a bounce here,
better support at 102. Likely to remain in corrective range between
102-112 for some months. Near-term failure of 102 would suggest longer
term decline is in the cards. Eventual dollar bottom should complete
at/above 96 in Sep-Oct time frame. This is likely to provide room for
non-US currencies to trend somewhat higher subject to pressure from
higher US rates fears.
Earl
----- Original Message -----
From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Saturday, June 17, 2000 8:52 AM
Subject: [RT] Market Outlook
> As the was ending and I surveyed my trading in the currencies, spoo,
and
> bonds, I realized that the markets just weren't doing what the price
> patterns suggested the markets were going to do. When trading, I have
no
> particular bias long or short, I just try to be where the price
patterns
> say the market wants to go, but the markets just don't seem to follow
> through. Bonds have been profitable for day trading up and down the 5
> minute chart but that's about it. Based on private emails I've
received,
> I'm not the only position trader who has been seeing good setups go
> nowhere or break down for the past couple of weeks.
>
> Bottom line is that I find myself out of tune with the market even as
I
> do my best to follow its message. As Friday came to a close, it was
time
> to get flat and take a deeper look at the message which the market is
> trying to convey. I may just be out of synch with the market or we may
> be seeing some very important fundamental shifts in market
> relationships. Among the points I will be reviewing this weekend:
>
> a) the US$ has declined further and faster than it "should"
> b) the S&P and NYSE indexes built an extremely bullish multi-month
price
> chart but seems unable to follow-through - may signal danger ahead
> c) with the exception of energy and a few others, many commodities
have
> failed to sustain rallies in the face of booming world economies
>
> I will post a follow-up when I finish my work, however I'd be
interested
> in seeing the thoughts of others on the list.
>
> Earl
>
>
>
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