Financials: Mar. Bonds are currently 15 higher at 143'18 and the 10 Yr. Note 5 higher at 130'22. Yesterday we liquidated the long 10 Yr. Note/ short Bond spread. We continue to recommend holding the long 5 Yr. Note/ short 10 Yr. Note spread which is currently trading at 7'18 premium the 10 Yr. Note. This trade is currently at a small loss as the original recommendation was to do this spread at 7'15 premium the 10 Yr. Note. My bias for the 30 Yr. Bond and 10 Yr. note remains to the downside but given the volatility and occasional flight to quality because of the European debt situation I am hesitant to have a naked short position at this time.

Grains: Yesterday Mar. Beans closed 19'6 higher at 1227'4, Mar. Corn 12'0 higher at 658'4 and Mar. Wheat 4'2 higher at 657'0. Over night Beans were 3 lower, Corn fractionally higher and Wheat 2 lower. If you remain long Mar. Corn either take profits or raise your protective sell stop to the 638'0 level. The weather forecast for S. America still calls for very little precipitation which has put a bullish underpinning on the Beans and Corn for the moment. Grain traders should be paying attention to any changes in S. American weather and particularly advances and declines in the Dollar.

Cattle: Yesterday Feb. LC closed 10 higher at 121.55 and Mar. Fc 62 higher at 149.42, both of which had posted 100+ point gains early in the session. The early call is slightly lower. My bias is to the short side of the market. Producers should take note of hedging opportunities afforded by recent price advances.

Silver: Mar. Silver is currently 30 cents lower at 29.30 and Feb. Gold unchanged at 1601.00. I have no positions at this time.

S&P's: Mar. S&P's are currently 4.00 lower at 1268.00. If you remain long I recommend taking profits. My bias has turned slightly negative given the fact the market was unable to take out the 1280.00 resistance area. That being said I am currently putting support in the 1253.00-1256.00 area. Of note: Friday morning is the monthly Unemployment Report.

Currencies: As of this writing the Mar. Euro is 106 lower at 1.2958, the Swiss 108 lower at 1.0637, the Yen 6 lower at 1.3050 and the Pound 46 lower at 1.5592. I am on the sidelines at the moment waiting for a clear cut trend to develop for the New Year. My only position is out of the money puts in the Euro and the Yen which are at a loss.

Regards, Marc

888.908.4310 | 312.264.4310

mnemenoff@pricegroup.com