Financials: Sept. Bonds are currently 14 higher at 151'14 and the 10 Yr. Note 7.5 higher at 134'24.5. Since my last "Report",Mario Draghi of the ECB announced that the ECB will do whatever it takes to preserve the Euro. The market has taken this to mean the possibility of "Quantitative Easing". It was also rumored that their will be talks with the Germans about buying government Bonds in an effort to push rates lower. All of this was viewed as positive actions for European soveriegn debt and removed some of the fear premium on U.S. debt instruments pushing the market down to a low of 149'08 on Friday. What is important to note is on Friday the market settled at 150'01 failing to generate a true sell signal fo a close below the 150'00 level. For the moment, support remains at 150'01 and resistance is now 152'26. Today starts a two day FOMC meeting. As usual I expect no change in rates and language stating the the Fed will do whatever it takes to keep rates low through 2013,i.e., the possibility of QE3 if the Economy shows no signs of improvement. Also: Thurs. Weekly Jobless Claims, Friday the Monthly Unemployment Report.
Grains: Dec. Corn is currently 1'0 lower at 813'0, Nov. Beans 5'4 higher at 1649'0 and Dec. Wheat 8'0 lower at 919'2. Dec. Corn is holding above the 800'0 hurdle and looks technically poised to trade at higher levels. Fundamentally, crop damage is probably irreversible in southern Illinois and southern Indiana lowering average yield for the entire crop to the 120-130 bushel per acre. Hedgers (producers) should continue to use put options and at this time and consider using futures for 25% of your exposure. Support for Dec. Corn is currently 784'0 with resistance in the 840'0 area. Possible top in Nov. Beans.
Cattle: Oct. LC is currently 27 lower at 125.55 and Oct. FC 10 lower at 141.40. Technically LCV has had a slight upside breakout with closes above the 124.50 level, the next level of resistance is now 127.00. Oct. FC remain range bound between 138.00 and 144.00. My bias in FC is to the long side of the market on breaks.
Silver: Sept. Silver is currently 7 cents higher at 28.10 and Dec. Gold 3.00 dollars higher at 1625.00. We remain lightly long Silver. Resistance for Aug. gold was the 1626.00, which puts resistance in Dec. Gold at 1629.00.
S&P's: Sept. S&P's are currently unchanged at 1380.75. The market awaits the FOMC meeting. Support is currently 1369.00 and resistance 1387.50.
Currencies: As of this writing the Sept. Euro is trading 30 higher at 1.2299, the Swiss 20 higher at 1.0238, the Yen 12 lower at 1.2788 and the Pound 62 lower at 1.5645. Continue to treat the Euro as a trading affair between 1.2225 and 1.2475.
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