Consensus National Futures and Financial On Line Index
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ASPRAY'S GLOBAL TRADER
Dollar Rebounds Sharply Versus Yen
A Further Rally Is Likely To Fail
The markets are reported as of the close Thursday.
The traders in the yen/$ decided to quickly test the BOJ resolve as they have brought the dollar back above the 129 level early Friday. Still the rally should fail as the dollar is likely to drop back to the 125 level in the next week or so. A few more short-dollar positions may need to be squeezed before the dollar's decline can resume.
The dollar was mixed against the DMK and SWF but a further decline does look likely as the daily studies are still deteriorating. A lower weekly close will favor a further dollar decline next week.
DEUTSCHEMARK/U.S. DOLLAR: The dollar was able to move slightly above the 1.7800 level and tested the downtrend before the rally fizzled. Near-term support at 1.7700-30 with further at 1.7650-80. A break below the daily support at 1.7550-80 will be much more negative. The daily studies are declining and are slightly negative overall.
Summary–Traders are now 25% short at 1.7718, stop at 1.7860. Added 25% short at 1.7785-7805 with the same stop.
DEUTSCHEMARK/YEN: The cross has rebounded sharply back to the 72.80-73 area. There is further resistance at 73.30-50. The rally should fail. Go 25% short at 72.74-73.20, stop at 73.57.
SWISS FRANC/U.S. DOLLAR: The dollar bounced back to the 1.4400-30 level but the rally did not last long. Next support at 1.4330-50 with more important in the 1.4250 area. Traders are now 25% short at 1.4344-92, stop at 1.4457.
Traders Test Bank Of Japan
With Yen/Dollar Back Above 129
The dollar held the 126.70 level on in afternoon Asian trading and then surged to the upside for the rest of the day. The 129 level was overcome in NY trading and again early Friday. Next strong resistance at 129.40-80 with more important in the 130-130.50 area. The daily studies are still strongly negative so intervention or not the rally should fail.
Summary–Traders went 25% short at 127.88- 128.49, stopped out at 129.13. Return to 25% short at 129.10-65, stop at 131.15.
STERLING/YEN: The STG/yen surged back above the 214 level in impressive fashion. More important resistance in the 216 area. A break back below 212 will indicate the rally is over. No position.
SWISS FRANC/YEN: The cross rallied over a full yen in late NY early Asian trading as the 90 level is being tested. There is further resistance in the 90.50-80 area. Go 25% short at 89.84-90.44, stop at 91.22.
CANADIAN DOLLAR: The dollar has surged back above the 1.4260 level and the overall trend is still positive. Now 25% long on a stop at 1.4262, sell stop at 1.4177.
Sterling Closes Strong Crosses Also Rebound
The STG rallied further today as the 1.6660 level has been reached. The cable is overextended short term and would wait for a pullback to buy. Go 25% long at 1.6472-6534, stop at 1.6387.
STERLING/DEUTSCHEMARK: The cross has had a powerful rally to the 2.9550-9600 area but has pulled back from the highs. The daily studies have improved sharply but are still negative overall. Traders go 25% long at 2.9245-9320, stop at 2.8973.
STERLING/SWISS FRANC: The STG/SWF is now approaching the 2.4000 area where a correction is likely. The daily studies are not positive and the extent of the first pullback will be important. No new recommendation for now.
MARCH TREASURY BONDS: The bonds made new rally highs today and continue to look positive. Aggressive traders are 25% long at 11915-23, stop at 11909.
U.S. STOCK MARKET: The sharply lower close in the S&P was expected today and a further drop is likely over the next week or so. Now 25% short the March S&P at 975.50-976.50, stop at 981.30.
December 19, 1997 Thomas E. Aspray
APM Asset Management
P.O. Box 15366, Little Rock, Arkansas
Consensus National Futures and Financial On Line Index
Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com
