Financials: Jun. Bonds are currently 3 higher at 115'04. Yesterday we took profits from a short Bond position and/or the combination of short the Jun. Bonds and short the Jun. Bond 115'00 put. I prefer to stay on the sidelines until at least Monday at this time. Over all, I still feel that rates are headed higher in the long term and that the yield curve will widen (long term rates will mover higher than shorter term rates). The question is how to position oneself for this. I am contemplating both an option position in puts and/or put spreads and also a long 10 Yr. Note/ short 30 Yr. Bond spread position at the moment.
Grains: Yesterday Beans were 17 cents lower at 942'4, Corn 10 lower at 355'0 and Wheat 9 lower at 466'4. Over night Beans were 5 higher, Corn 1 higher and Wheat 1 higher. May Wheat is nearing support in the mid 450's, an area where I will be willing to try the long side of the market. Long hedgers in Corn (users) may want to start buying for their near term needs. We remain short the July Beans 880'0/1080'0 strangle (short both out of the money puts and calls) which closed at about 28'0 yesterday.
Cattle: Yesterday Apr. Cattle closed 97 lower at 94.75, Jun. 75 lower at 92.12 and the Aug. 47 lower at 90.07. We now have a minimal profit on the long Aug/short Apr. spread. This spread could be volatile as we near first notice day for the Apr. contract. If the spread trades below 445 premium the Apr. today you might want to get out. Hedgers who are long puts that are now in or near the money should roll them into lower strike prices. Hedgers who are short futures may want to consider buying in their futures and putting on a combination of long out of the money puts and short out of the money calls.
Silver: May Silver is currently 14 cents higher at 16.88. I am still looking to be a buyer below the 16.30 level.
S&P's: Jun. S&P's are currently 2.50 higher at 1165.25. I remain short the Futures and short the Jun. 1040 puts. Yesterday's late sell off has established resistance in the 1176.00 area. Support is currently 1147.00.
Currencies: As of this writing the Jun. Euro is 83 higher at 1.3374, the Swiss 42 higher at .9365, the Yen unchanged at 1.0782 and the Pound 31 higher at 1.4845. Attempts by the EC and IMF to put together a bailout package for Greece has put some support under the Euro for the moment. As for the Yen, if the market trades below the 1.0725 level I will start taking profits from all put and/or put spread positions.