TAURUS COMMODITIES
133 W. Boscawen Street, Winchester, Virginia
(December 12, 1997) FINANCIAL INSTRUMENTS: EURODOLLARS–Had our stops hit on our shorts as prices moved sharply higher throughout the financial complex. Prices are now at about a 60% retracement from the 1993 highs to the 1995 lows, and unless we get a strong new move up, technically and cyclically, we are looking for a drop next year down to the 92.500 level.
TREASURY BONDS–A resting buy as prices have been pushed up by another round of losses in the Asian equity markets, especially in Korea. Also supporting prices here was the softer-than-expected November Retail Sales report. The sense of renewed turbulence throughout the Far East is supporting prices as equity markets worldwide are suffering.
TREASURY NOTES–No new signal here yet. We have an interesting pennant formation on the monthly price charts, indicating a breakout above about 111-00 will be very bullish while a drop through about 109-00 will be equally bearish. With rumors mounting that the Chinese may devalue their currency, and that of Hong Kong, bears have another worry.