Financials: Sept. Bonds are currently 2 higher at 146'06 and the 10 Yr. Notes unchanged at 132'18.5. Yields have risen to 2.86% on the 30 Yr. Bond and 1.80% on the 10 yr. Note from 2.5% and 1.4% respectively. Over night Bonds made a new recent low of 145'12 slightly more than 2'00 below Tuesday's stated support of 147'20. Being long the Bonds in my opinion had become an over crowded trade with many participants on the long side of the market, there because of safety and quality issues. Like an over stretched rubberband, something had to give. That being said, I now believe the market is in an oversold situation and recommend the long side of the market on sharp breaks for short term trading. This morning's Weekly Jobless Claims were up by 2,000 vs. expectations of an increase of 1,000. Housing starts were down by 1.1% and Housing Permits up by 6.8%.
Grains: Dec. Corn is currently 3'0 higher at 807'0, Nov. Beans 5'4 higher at 1640'0 and Dec. Wheat 17'2 higher at 883'4. If you went long Dec. Corn in the 785'0 area (the recent low was 786'0) take profits. Over the last couple of sessions we were able to sell the combination of the Dec. Corn 680'0 put and Dec. Corn 900'0 call for 32'0.
Cattle: Oct, LC is currently 25 lower at 126.40 and Oct. FC 55 lower at 144.97. For the moment Live Cattle has hit upside objectives of 127.00 on the Oct. contract putting me on the sidelines. Oct. FC have closed above the 145.00 level and look poised to trade higher. If you remain long use a close stop. Feeder Cattle will be following the Corn market closely and will probably need lower Corn prices to sustain a rally. Something to watch: The long Dec. Hog/ short Dec. Live Cattle spread which is historically wide at the moment.
Silver: Sept. Silver is currently3 cents higher at 27.85 and Dec. Gold 2.00 lower at 1605.00. We remain lightly long Silver. Continue to treat gold as a trading market between 1585.00 and 1625.00.
S&P's: Sept. S&P's are currently 2.00 higher at 1405.50. The market has been in a tight range all week and continues to close above the 1396.00 level. That being said, this market is in resistance from current levels to the high of the year for a lead month contract of 1420.00 area. I am on the sidelines but will consider a close below the 1395.00 level a minor sell signal. As I have mentioned for the last week or so, this is a good time to reduce your position size as the market is quite "choppy" with in a tight range.
Currencies: As of this writing the sept. Euro is trading 34 higher at 1.2327, the Swiss 29 higher at 1.0266, the Yen 50 lower at 1.2627 and the Pound 39 higher at 1.5725. I am current on the sidelines.
888.908.4310 | 312.264.4310