Financials: Mar. Bonds are 1 higher at 141'18 and the 10 Yr. Note 4 lower at 129'14. Once again it is all about European debt. S&P looks like they are going to down grade the debt of the majority of the countries in the EC. How will this eventually effect our Bonds and Notes, anybody's guess at this point. My guess, these markets will drift somewhat lower, but not dramatically. That being said we remain long out of the money puts in Jan. and/or Mar. expiration in Bonds and Notes.

Grains: Yesterday Jan. Beans closed 9'4 lower at 1126'2, Mar. Corn 4'2 lower at 591'0 and Mar. Wheat 14'0 lower at 611'4. Over night Beans were 3 lower, Corn 9 lower and Wheat 7 lower. We were stopped out of a long Mar. Corn position overnight when the market traded through the 586'0 level on the downside. This puts us on the sidelines in the Grains.

Cattle: Yesterday Feb. LC closed down the 300 point limit at 120.27 and Jan. FC 277 lower at 144.30. Over nigh LC is about unchanged and FC about 25 higher. If you continue to hold the combination of short Feb. LC an d short the Feb. LC 118 put either take profits or use a protective buy stop at 121.60. If you are stopped out of the futures do not forget to cover to cover the the short 118 put.

Silver: Mar. Silver is currently 62 cents lower at 31.75. At the risk of sounding like a broken record, if you remain long term bullish, consider out of the money calls and/or call spreads for Mar. expiration.

S&P's: Dec. S&P's are currently fractionally lower at 1254.50. Continue to treat as a trading affair between 1240.00 and 1260.00. Long term resistance is currently the 1270-1280.00 level, an area I would take the chance of establishing a short position.

Currencies: As of this writing the Dec. Euro is currently 28 lower at 1.3370, the Swiss 78 lower at 1.0789, the Yen 4 higher at 1.2866 and the Pound 40 lower at 1.5603. I remain long term negative the currencies and continue recommending out of the money puts and/or put spreads in the Euro and Yen for either Jan. or Mar expiration.

Regards, Marc

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