Financials: Sept. Bonds are currently 12 higher at 12321. Yesterday we took profits on the long 5 Yr. Notes/ short 10 Yr. Notes spread. We continue to hold the combination of short Sept. Bonds and short the Sept. Bond 120'00 put.
Grains: Yesterday Beans were 5 cents higher, Corn 4 higher and Wheat 10 higher. Over night Beans were 2 higher, Corn fractionally lower and Wheat fractionally lower. The Dollar is once again lower and this should add some underlying support to the Grains. Another factor of note, Oats have had a substantial rally (50 cents) over the last few sessions due mainly to disappointing crop expectations because of an extreme amount of precipitation. This factor has also rallied Minneapolis and Kansas City Wheat. If you remain long July Corn raise your sell stop to the 346'0 level or take profits. If you remain long July Beans raise your sell stop to the 944'0 level or take profits. The July Corn 340'0/420'0 strangle is now trading below 16'0, consider taking profits. We remain long out of the money call spreads in Nov. Beans.
Cattle: Yesterday Live and Feeder Cattle closed moderately higher. Over night the Live Cattle are slightly higher and Feeders about 40 higher. We remain long Aug. Live Cattle and will raise our sell stop to the 86.75 level. If the market trades above 88.50 level, either take the short term profit or raise your sell stop to the 87.15 level.
Silver: July Silver is currently unchanged at 18.40. I am on the sidelines.
S&P's: Sept. S&P's are currently 7.50 higher at 1094.00. Yesterday the market failed in the 1095.00-1104.00 resistance level providing good trading opportunites from the short side on rallies. Resistance remains in the 1095.00-1104.00 area and support remain at 1078.00. I am a seller on rallies for the near term.
Currencies: As of this writing the Sept. Euro is 43 higher at 1.2294, the Swiss 30 higher at .8810, the Yen 40 higher at 1.0981 and the Pound 21 higher at 1.4794. As mentioned yesterday, I prefer the short side of the Euro above the 1.2260 level. Another method of participating in this market would be purchasing puts or put spreads or selling calls or call spreads. I am looking at the Sept. Euro 1.2800 call (currently at 110 points) as a selling opportunity. Keep in mind this presents limited profit potential and unlimited risk, however, the risk is less than that of a futures contract. I am also looking to the short side of the Pound on a rally above the 1.4850 level.