Independence Day was on Monday, but the fireworks have continued through the week. The results of Brexit still seem to be having an impact on the currency markets, with wild swings continuing this week. Agricultural markets have been on a wild ride as well, with corn putting in new contract lows for the year, and soybeans are nearly a dollar lower than the start of the week. A pretty active to start to a new quarter and new month.
Friday will bring the jobs numbers for June. Many are looking for a big jump from May’s disappointing 38,000 non-farm payroll number. The end of the Verizon worker strike will bring add at least 35,000 to the June number right off the bat. As of Thursday afternoon the consensus for non-farm payroll is 180,000 with the range from 130,000 to 235,000.
Normally we wonder how the Fed is going to interpret the jobs data. The recent events in the UK and Europe have changed that a bit. I think the UK’s decision to leave the EU has taken the possibility of and Fed action in July off the table. “What is the Fed going to do “will not be the first thought that pops in most traders on the release of the jobs data.
I looking to play a directional move by buying a strangle. I like buying the July E-Mini S&P 500 Week 4 2030 put along with the 2125 call at 9 points ($450.00) or better. Risk is limited to the cost of entry plus fees and commissions. Expiration is on July 22nd, so we have about two weeks to be in the trade. I am setting an initial target exit of 25 points. I would try to limit a loss to 5 points if the market doesn’t get a strong directional move.
For those interested Walsh Trading is holding our weekly grain webinar Thursday June 30th at 3:00 PM Central time hosted by our Senior Grain analyst Tim Hannagan. Tim has been ranked #1 by Reuters and Bloomberg in 2011 and 2012 for his most accurate end of year price predictions for soybeans and corn. Registration is free and if you cannot attend live, a recording will be sent to your email upon signup.
John Weyer
Director of Commercial Hedging
Walsh Trading Inc.,
