Financials: Mar. Bonds are currently 24 higher at 121'02. There is a bit of flight to quality this morning as most commodity prices, equities and metal prices are more than a little lower. That being said, I am still looking at the Bonds as a sideways market for the neat term and feel that for the long term prices are headed lower. Support remains at 118'22 and resistance at 121'14. We remain long out of the money puts and/or put spreads in the June and Sept. 2012 Eurodollars.
Grains: Yesterday Beans closed 7 cents lower, Corn 2 lower and Wheat 10 higher. Over night Beans were 14 lower, Corn 9 lower and Wheat 12 lower. Support remains in the 1394 area for Mar. Beans, however, if this should be breached on the opening the next level of support will be the 1378'0 level. Support for Mar. Corn remains at 638'0. We remain short the Mar. Beans 1300'0 straddle (short both the 1300'0 call and put) and will take profits below the 106'0 level today if the market allows (we were unable at 114'0 yesterday).
Cattle: Yesterday Live Cattle closed 100+ lower on nearby contracts and only minimally lower in Feeder Cattle. Both Live and Feeder Cattle look technically toppy to me for the moment. As mentioned yesterday I will be looking at sharp rallies as selling opportunities with protective buy stops 50 points above the current contract highs. For example, I will be a seller in Apr. Live Cattle in the 113.75 area with a protective buy stop at 116.80.
Silver: Mar. Silver is currently 45 cents lower at 26.87. We remain long futures from below the 27.50 level. I recommend using a protective sell stop $1.00 below your entry level. I must admit that the current price action is making me apprehensive about being long at the moment. We remain long out of the money call spreads on the Mar. contract. Keep in mind we have rolled up the long leg of this position a few times and have taken our original investment off the table plus profits. You might consider exiting this trade. We remain long the Apr. Gold $1100 put. If you are long multiple contracts, take a small partial profit above the 270 level.
S&P's: Mar. S&P's are currently 6.00 lower at 1282.50. Support remains at 1267.00 and resistance in the 1284.00-1288.00 area. I continue to prefer the short side of this market.
Currencies: As of this writing the Mar. Euro is trading 34 lower at 1.3594, the Swiss 68 higher at 1.0603, the Yen 13 higher at 1.2137 and the Pound 221 lower at 1.5767. Our only position at this time is long out of the money puts in the Euro.
Senior Market Analyst, Price Futures Group
Publisher, Nemenoff Letter
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