Financials: Sept. Bonds are currently 17 higher at 126'00. Auction results over the last two sessions have boosted the interest rate on the 10 Yr. Notes to 3.12% and on the 30 Yr. Bond to 4.11%, an increase on both of more than 10 basis points from lows made last week. Yesterday Sept. Bonds held support in the 125'16 area, a level where I want to either take profits from the combination of short Bonds and short the Sept. Bond 124'00 put. An alternative to taking profits would be covering the short 124'00 put and buying a 10 Yr. Note, resulting in being positioned with the long 10 Yr. Note/ short Bond spread. Near term support remains in the 125'16 area and near term resistance at 126'27.
Grains: Yesterday Nov. Beans closed 3 cents higher, Dec. Corn 4 lower and Dec. Wheat 14 higher. Over night Beans were 4 higher, Corn 1 higher and Wheat 2 lower. We continue to hold out of the money call spreads in Nov. Beans and will take profits when (if) the Nov. Bean futures trade above the 970'0 level. For the near term I still feel that Dec. Corn is a bit over bought and recommend that producers be looking for hedge opportunies as the price approaches 400'0. I am still long term friendly to the Beans but will wait for a break before going long.
Cattle: Yesterday Live Cattle settled about 80 higher and Feeder Cattle 70-90 higher. I am still looking to be a seller in Oct. Cattle above the 93.00 level and Sept. or Oct. Feeders above the 115.00 level. Producers should be watching these areas for hedge opportunities.
Silver: Sept. Silver is currently 8 cents lower at 18.17. We remain long the Dec. Silver 20/22 call spread. I will be a buyer below the 17.20 level if the market allows. Near term resistance is the 18.50 area.
S&P's: Sept. S&P's are currently 1.50 lower at 1088.00. Yesterday's positive earning reports by Intel, CSX and Alcoa have been discounted by this morning after the market made new recent highs at 1099.00 after the earnings were released. Retail sales this morning were a bit disappointning. I still feel the market is in resistance between the 1090.00 and 1110.00 levels. Given the wide range of resistance at this time I am looking to have a short position by either selling out of the money calls (such as the 1140 strike price) or buying out of the money puts to be able to withstand market volatility. Near term support is currently the 1072.00 level.
Currencies: As of this writing the Sept. Euro is 1 higher at 1.2703, the Swiss unchanged at .9477, the Yen 28 higher at 1.1328 and the Pound 82 higher at 1.5237. If you remain short the Yen continue to use a protective buy stop at 1.1380. If the market trades below the 1.1250 level either take profits or low your buy stop to the 1.1340 level. We still maintain a short bias to the Euro. The Pound is higher this morning because of a larger than expected fall in the unemployment rate. The Sept. Dollar Index is currently 12 lower at 83.71. I look for support in the Dollar Index in the 83.30-83.50 area.