Financials: Jun. Bonds are currently 10 higher at 121'24. The Producer Price Index report this morning showed a decrease of 0.1% versus expectations of an increase of 0.1% Housing starts were up 5.8%, above expectations of 3.8%. however, permits were down by a disappointing 11.5%. The immediate reaction was to push Bonds slightly lower for the day before heading slightly higher. I am still hesitant to enter this market at current levels and will await either a break to support of 120'03 or a rally to resistance of 123'16 to treat as a trading market for short term trades. We remain short the Dec. Eurodollar from the 99.210 level, currently at 99.165.
Grains: Yesterday Beans were 12 cents lower, Corn 7 lower and Wheat 2 lower. Over night Beans were 8 higher, Corn 4 higher and Wheat 4 higher. I still like the long side of July Beans from below the 940'0 level (yesterday's low was 937'4) and the long side of July Wheat from the 457'0 level. If you went long July Beans yesterday either take the short term profit or use a protective sell stop at 924'0. A somewhat weaker Dollar this morning should add a bit of support to the market. We remain long out of the money call spreads in Nov. Beans and short the Sept. Corn 340'0/420'0 strangle.
Cattle: Yesterday Live and Feeder Cattle were 65-90 lower depending on the contract month. If you remain short Aug. Cattle either take profits or lower your buy stop to the 92.65 level. Producers should continue to hold put positions.
Silver: Jul. Silver is currently at 18.83. Yesterday my recommended sell stop against recent long positions was executed when the market traded through the 18.76 level. I will once again be a buyer if the market trades below the 18.40 level. I also recommend buying out of the money call spreads in the Dec. contract on any sharp break (details later in the week).
S&P's: Jun. S&P's are currently 10.00 higher at 1144.50. We are currently on the sidelines. Near term support is currently the 1121.00 level with near term resistance the 1153.50 level. I still like the short side of this market and will be a seller above the 1148.00 level.
Currencies: As of this writing the Jun. Euro is 41 higher at 1.2431, the Swiss 24 higher at .8865, the Yen 31 lower at 1.0780 and the Pound 10 higher at 1.4487. I still feel the Euro is a bit oversold and will once again look for short term trades from the long side of the market on breaks below the 1.2378 level. Yesterday I recommended selling the Jun. Euro 1.23/1.25 put spread at 130 points. The widest I saw this spread was 112 points leaving us unable on our order which I will not be entering this morning. The Jun. Dollar Index is currently 22 lower at 86.15.