Financials: Dec. Bonds are currently 10 higher at 138'25 and the 10 Yr. Note unchanged at 128'21. The market still awaits decisions on a European debt plan. Part of the focus will be the recapitalization of banks and the degree of write downs (probably at least 50%) of Greek and other European Soveriegn Debt. Without sounding too redundant from last weeks recommendations, continue to treat as a trading market between 138'00 and 141'15. The short term trend appears to remain down.
Grains: On Friday Beans closed 12 cents lower at 1212'2, Dec. Corn fractionally lower at 649'2 and Dec. Wheat 1 higher at 632'2. Constructive economic news out of China help boost prices overnight with Nov. Beans 13 cents higher, Dec. Corn 10 higher and Dec. Wheat 10 higher. As for futures trading, my neat erm upside objective of 655'0 has been reached and I'm currently on the sidelines for the next day or so. We do however remain long out of the money calls and/or call spreads in Dec. Corn.
Cattle: On Friday Dec. Live Cattle closed 35 points higher at 122.15 and Nov. Feeder Cattle 70 higher at 142.70. Friday's Cattle on Feed Report showed the following: On feed as of Oct. 1st. 105% of a year ago vs. average expectations of 103.9&. Placed in Sept. 100% of a year ago vs. estimates of 96.5%. ?Marketed in Sept. 101% of a year ago vs. 100.6%. The trade will be looking at the report as slightly negative because of the placement number. If you remain short this market continue to use a protective buy stop at your breakeven level. If the market trades below 121.20 either take profits or lower your buy stop to the 121.95 level.
Silver: Dec. Silver is currently 46 cents higher at 31.65. If you remain long term bullish this market, I recommend being long out of the money calls and/or call spreads for March 2012 expiration.
S&P's: Dec. S&P's are currently 3.00 higher at 1238.00. The market awaits decisions on European debt. Positive quarterly earnings helped boost the market during the last 4 trading sessions. Near term resistance of the 1230.00 area has been penetrated to the upside. The next level of resistance is the 1242.00 area. For the near term my only recommendation is to be short the 1240.00 call. My reasoning is that calls are carrying a good amount of premium inspite of the recent run up in price as volatility remains high. Collecting the premium, I feel, gives a bit of protection (reduces risk) if you are somewhat negative the market as I am.
Currencies: As of this writing the Dec. Euro is 14 lowe at 1.3845, the Swiss 22 lower at 1.1294, the Yen 8 lower at 1.3142 and the Pound 22 lower at 1.5907. I am pretty much on the sidelines at the moment awaiting European debt decisions. We remain long out of the money puts in the Yen.
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