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COMMODITY INSIGHT
152 Ennis Lake Road, Ennis, Montana
(August 14, 1997) STOCK INDICES: Since the last issue of this newsletter was published, the stock and bond markets have dropped hard. The break in stock futures has been so great that our short position established on August 6 at 961.00, had open profits this week of $22,500 per contract in just five days!
It was those large profits that prompted me to publish this issue of Commodity Insight a bit early. Those short the September S&P based on recommendations made in this newsletter should move all stops down to 935.00 on an intra-day basis. That will lock in profits of nothing less than $13,000 per contract. However, on the next trade in the September S&P of 920.00 or lower, move all stops down again to 930.00 on an intra-day basis. That will lock in at least $15,000 profit per contract.
My work continues to suggest that the high in both the stock and bond markets made a week or so ago, are long- term highs. Rallies in both markets from this point on should be viewed as selling opportunities. However, keep in mind that stock indexes can and often times do, rise or fall $3000 to $7000 per contract on a whim. It is of the utmost importance therefore, that an intra-day stop be used at all times when involved with stock indexes.
The U.S. financial markets are beginning to suspect that a bit of inflation is in the air. In addition, both markets are old bull markets. Rallies should be viewed with skepticism.
Jerry F. Welch
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