Financials: Mar. Bonds are currently 21 higher at 141'26 and the 10 Yr. Notes 9 higher at 130'04. Again, it's all about Europe as the market goes into risk off mode and seeks safety in Dollar denominated instruments. This mornings' attitude is that traders do not seem to be pleased with the outcome of the European Union Summit. Investors seem to feel that the outcome will be another series of half measures that doesn't address the need for recapitalization for unstable Banks. As for trading Bond futures, continue to treat as a trading market between 140'20 and 143'18.
Grains: On Friday Beans closed 25 cents lower, Corn 6 lower and Wheat 1 lower. Over night Beans were 6 lower, Corn 6 lower and Wheat 4 lower. A strong Dollar this morning has had the expected effect on the Grains (lower). I remain on the sidelines. That being said, users of Corn such as livestock producers might consider long hedges in for short term needs.
Cattle: On Friday Feb. LC closed 115 lower at 118.45 and Jan. FC 32 lower at 142.10. Fro the moment feb. LC has met my near term downside objectives in the 118.00 area. If you continue to hold the combination of short Feb. LC and short the Feb. LC 118 put I recommend taking profits today. In fact if the market is moderately lower this morning (about 100 points) you might consider selling the Feb. LC 116/112 put spread (selling the 116 put/ buying the 112 put) for 150 points if the market allows.
Silver: Mar. Silver is currently 1.08 lower at 31.16. Gold traders take note: Feb. Gold is approaching support in the 1610-1635 area.
S&P's: Mar. S&P's are currently 16.00 lower at 1237.00. Once again fiscal events in Europe dominate this market (see Financials comment). Something to watch carefully: the 1220 level if about the middle of the years range of 1068- 1373. I am currently on the sidelines.
Currencies: As of this writing the Mar. Euro is 122 lower at 1.3249, the Swiss 92 lower at 1.0728, the Yen 65 lower at 1.2866 and the Pound 47 lower at 1.5600. If you remain long out of the puts in the Euro or the Yen consider rolling your position into a lower strike price to take advantage of price declines.
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