Financials: Dec. Bonds are currently 27 higher at 143'20 and the 10 Yr. Note 11 higher at 130'21. The inability of the Super Committee to come up with an agreement on budget reduction and debt reduction measures (is this a surprise?) has the market still in risk off mode. Add to this the unknown factor of new government leaders in Spain, Italy and Greece we continue to have a flight to safety. I am currently on the sidelines contemplating the downside potential of these markets. I pretty much want to stay away from Bond futures at the moment even though I feel the this market will once again trade under the 140''' level. The question being how high can they go first? Consider going long out of the money puts for either Jan. or Mar. expiration. You might also consider the long 5 Yr. Note/ short 10 Yr. Note spread.
Grains: On Friday Beans closed unchanged, Corn 4 cents lower and Wheat 2 higher. Over night Beans were 10 lower, Corn 7 lower and Wheat 6 lower. On Friday we went long March Corn and will use a protective sell stop at 586'0 putting our risk at about 35 cents from our entry level. We remain long out of the money calls and/or call spreads in Dec. Corn which expire later this week, I expect them to go off the board worthless.
Cattle: On Friday Feb. LC closed closed 182 lower at 121.77 and Jan. FC 215 lower at 147.42. I continue to hold a negative bias to these markets. Short hedgers for Feeder Cattle should take note of hedging opportunities on contacts through at least Aug. 2012.
Silver: Dec. silver is currently 1.28 lower at 31.13. If you remain long term bullis consider out of the money calls and/or call spreads for March 2012 expiration.
S&P's: Dec. S&P's are currently 24.00 lower at 1190.00. The presumed inability of the U.S. and Europe to get Government spending under control has pressured the markets this morning, especially to inability of the Super Committee to agree on any proposals. Near term support of 1206.00 has been handily broken as we now near long term support of 1185.00. At current levels I no longer have a negative bias, and am willing to start probing the long side. Resistance is currently 1216.00.
Currencies: As of this writing the Dec. Euro is currently 66 lower at 134.47, the Swiss 12 lower at 1.0889, the Yen 7 higher at 1.3009 and the Pound 162 lower at 1.5618. I continue to have a negative bias across the board on these currencies. We remain short the Yen and long out of the money puts and/or put spreads in the Dec., Jan. or March Euro and Yen
888.908.4310 | 312.264.4310