Financials: Sept. Bonds are currently 4 lower at 128'23. Yesterday the market rallied sharply after Bernacke spoke about about lowered growth expectations. The yield on the 30 Yr. Bonds dropped to 3.89% and the yield on the 10 Yr. Note also dropped to a yield of 2.89%. Resistance of 128'12 was handily penetrated as the market rallied to a high of 129'14 befroe backing off to present levels.
To be honest, the trend is up but I cannot trade this market from the long side with the yield at present levels. If you remain spread long the 10 Yr. Notes/ short the Bonds, I feel that the spread will back off over the coming weeks to the aforementioned (the last couple of days) 4'00 premium the Bonds level. For the near term support is currently 127'24 and resistance 129'14. I am on the sidelines for the day.
Grains: Yesterday Nov. Beans closed 5 cents higher, Dec. Corn 6 higher and Dec. Wheat 11 higher. Over night Beans were 8 higher, Corn 3 higher and Wheat 11 higher. Wheat futures, which have been climbing steadily over the last two weeks have had a supporting effect on Corn and Beans. Add this to strong technicals and detrimental weather factors, Corn and Beans presently appear to be headed higher. Yesterday we went long the Dec.
Corn 420'0/ 440'0 call spread at 5'0 premium the 420'0 call. If the market allows I will be a buyer in Dec. Corn below 377'0 and a buyer in Nov. Beans below the 964'0 level. I still feel the Corn producers should be looking for hedging opportunities (buying out of the money puts for price insurance) as Dec. Corn once again approaches the 400'0 level.
Cattle: Yesterday Live and Feeder Cattle once again closed slightly higher putting Oct. Cattle near the 95.00 level. We remain short Oct. Cattle from above the 93.00 level with a protective buy stop at 95.65. Produers should start looking for hedging opportunities in Oct. and Dec. Cattle and in Sept. and Oct. Feeder Cattle.
Silver: Sept. Silver is currently is currently 4 cents lower at 17.75. We remain long the Dec. 20/22 call spread. I am taking a wait and see attitude before recommending any kind of futures position at this time. Support remains in the 17.20 area and resistance in the 18.40 area.
S&P's: Sept. S&P's are currently 14.00 higher at 1078.00. This mornings rally (based on positive earnings reports on various stocks) puts the market back to where it was before yesterday's testimony by Mr. Bernacke. It appears to me that the market is in a sideways trend between 1053.00 and 1091.00 for the moment.
Currencies: As of this writing the Sept. Euro is 98 higher at1.2841, the Swiss 47 higher at .9568, the Yen 34 higher at 1.1538 and the Pound 97 higher at 1.5240. We have been stopped out of short Euro futures in the 1.2820 area. If you remain either short out of the money calls or long out of the money puts I recommend staying with these positions at this time. I am still watching the Swiis for a sellin signal below the .9470 level before entering this market. Near term double tops are still in place for the Euro above the 1.300 level and the Swiss in the .9622 area.