IRA EPSTEIN & COMPANY
223 West Jackson, 7th Floor, Chicago, Illinois
312-207-1800(March 14, 2000) FINANCIAL INSTRUMENTS: BONDS--Bonds broke through a main support level on Friday and as such, I believe they will continue in the downward direction at a steady pace all week. Presently they've popped back up above the 18-day moving average, due in part to the big sell off in the overnight E-Mini NASDAQ contract, which was locked limit down on the markets opening Monday morning, but has since rallied some. I'm anticipating this current bond rally as just a temporary deviation from its general downward trend for the rest of the week. Stock traders seem to be shrugging off the NASDAQ drop as just a correction and I don't see the DJIA or the S&P 500 following it. This should allow the bonds to follow through on Friday's move.
There are many government reports due out this week starting with retail sales on Tuesday morning. Any of these reports could affect the direction of trade for that particular day. I will provide a list of the more important reports at the end of this report.
I'm going into the day's reports with a bearish lean and keeping my eye on the stock market. Oil prices are also a concern and need to be watched for wild fluctuations similar to last week's. Certain market watchers expect a more stable easing of crude oil prices throughout the week, which should have little effect on the bond market.
RECOMMENDATIONS--I would be a seller on bond rallies, looking to take profits starting at 9216. Inversely if bonds traded above 9506 I would have to reconsider my thoughts on the markets tendencies this week. I recommend placing sell orders in the 9417-22 range of the June bond contract, with stops above 9506.
GOVERNMENT REPORTS--Tuesday: retail sales, Johnson Redbook Survey, Richmond Fed Survey, Atlanta Fed Survey; Wednesday: Business inventories, industrial production, capacity utilization; Thursday: Housing starts, Producer Price Index, and Philadelphia Fed Survey; Friday: Consumer Price Index, real earnings, University of Michigan Consumer Confidence Index.
J.B. Siewers III
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