Dec. Bonds are currently 17 higher at 119'23, the 10 Yr. Notes 11 higher at 117'17, the 5 Yr. Notes 7 higher at 115'20 and the 2 Yr. Notes 2 higher at 108'14. This mornings CPI Report showed: Consumer Price Index up 0.4% which was in line with expectations. CPI, ex-food and energy was up 0.1%, also in line with pre-report expectations. Energy prices were up 4.6% and food up 0.1%. All in all the report had no surprises. We continue to hold the combination of short the Dec. Bonds and short the Dec. Bond 116'00 put. Near term support remains at 118'12 and near term resistance at 121'00.
Yesterday Nov. Beans were 51 cents higher, Dec. Corn 28 higher and Dec. Wheat 16 higher. Over night Beans were 12 lower, Corn 3 lower and Wheat 6 lower. A change in weather forecasts indicating the possibility of frost late in the month in the grain belt gave the market upside momentum as traders were buyers from the opening and many shorts ran for cover. We remain long out of the money calls and/or call spreads in Dec. Corn. If the Dec. Corn should trade above 380'0 in the next week or so, take profits. We also remain long Dec. Wheat with a near term objective of the 490'0 level. If this market trades above 490'0 either take profits or enter a protective stop 10 cents above your entry level.
Yesterday Oct. Cattle closed 17 higher at 87.22. The market is currently 32 higher at 87.55. If you remain long either take profits or continue to use a protective sell stop at 86.35. If the market trades above 88.10 and you want to remain long, raise your stop to the 86.90 level. The next level of resistance is the 88.40 area.
Dec. Silver is currently 32 cents higher at 17.32. We remain cautiously bullish and continue to hold long positions. I caution against initiating long positions at current levels.
Dec. S&P's are currently 5.00 higher 1051.00. Yesterday's PPI Report and today's CPI Report has given traders short term reasons to think the market is headed higher. I must admit I remain a skeptic and have missed the rally over the last month and have lost a bit of money trying the short side of the market. I am recommending staying away from futures at the moment and recommend being long out of the money puts.
As of this writing the Dec. Euro is 46 higher at 1.4704, the Swiss 23 higher at .9691, the Yen 100 higher at 1.1083 and the Pound 17 lower at 1.6473. We remain long out of the money puts in the Yen. We also remain long out of the money puts and/or put spreads in the Pound.