Financials: Mar. Bonds are currently 23 higher at 119'30. Northern Africa unrest especially in Libya has caused worldwide uncertainty as reflected in the Oil market and Equities markets over the last few days. In times of uncertainty the market moves toward safety, in this case U.S. Treasuries. I still have a negative long term bias but caution against getting married to a position at this time. We remain long out of the money outs and/or put spreads in the June and Sept. 2012 Eurodollars.
Grains: On Friday Beans closed 36 cents lower, Corn 3 lower and Wheat 27 lower. Over night the market were quite volatile opening higher and closing lower with Beans 15 lower, Corn 10 lower and Wheat 20 lower. We remain short the combination of May Corn 660'0 puts and 740'0 calls.
Cattle: Live and Feeder Cattle are called mixed this morning as traders try to sort out the implications of N. African unrest. The overnight market has not really given a clear indication of direction with some contracts slightly higher and others slightly lower. Friday's Cattle on Feed Report showed: On Feed 106% of a year ago versus a pre-report estimate of 105.1%. Placements 104% vs. 103.5%. Marketed 100% vs. 100.6%. On the surface I would say the report was neutral to slightly negative. I remain on the sidelines.
Silver: Mar. Silver is currently 33.27 up significantly since Friday due to the uncertainty in N. Africa. We remain long the Jun. Gold 1450/1500 call spread.
S&P's: Mar. S&P's are currently 16.00 lower at 1326.50. I still prefer the short side of this market (although I am currently on the sidelines). It appears to me that the market now has fundamental (world wide uncertainty) and technical reasons to set back. Near term support is currently 1320.00 and near term resistance at 1337.00. You might consider a strategy that includes options as some protection, such as short futures and either long out of the money calls or short out of the money puts.
Currencies: As of this writing the Mar. Euro is currently 15 lower at 1.3668, the Swiss 64 higher at 1.0643, the Yen 2 lower at 1.2030 and the Pound 95 lower at 1.6148. We remain long out of the money puts and/or put spreads in the Euro. I will also be a seller on rallies in the Euro with an initial protective buy stop above the 1.3840 level
Senior Market Analyst, Price Futures Group
Publisher, Nemenoff Letter
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