Financials: Jun. Bonds are currently 1'11 higher at 124'04. Deflation and renewed fears of a slowing economy, particularly housing, and add to that unrest in Europe and Thailand is causing another round of flight to quality. My recommended buy stop for short term trades from the short side of the market has been penetrated as the market traded above the 114'02 level. Weare now spread long 10 Yr. Notes/short Bonds from the 2'28 level premium the Bonds. If you remain short Dec. Eurodollars, take profits, the market is currently trading at 99.060.

Grains: Yesterday Beans were a penny lower, Corn fractionally lower and Wheat 1 higher. Over night Beans were about unchanged, Corn 1 lower and Wheat 2 lower. Early this morning the markets were higher before the equities started to drop and the Dollar rallied. We remain long July Beans from just below the 940'0 level with a protective sell stop at 924'0. We also remain long out of the money call spreads in Nov. Beans and short the Sept. Corn 340'0/420'0 strangle.

Cattle: Yesterday Live and Feeder Cattle closed slightly lower to slightly higher depending on the contract month after trading moderately lower early in the session. This morning the markets are moderately to sharply lower in sympathy with deflationary fears affecting most markets this morning. If you remain short Aug. Cattle either take profits or lower your buy stop to the 92.10 level. We should start to see support in Aug. Cattle between 88.50 and 89.50. Producers should contniue to hold out of the money put positions.

Silver: July Silver is currently 37 cents lower at 17.74. Yesterday we went long below the 18.40 level. I want to keep this position, but will refrain from adding at this time. I will be looking at out of the money call spreads on the Dec. contract tomorrow.

S&P's: Jun. S&P's are currently 18.00 lower at 1092.00. This morning the market made a low of 1085.25, close to long term support in the 1080.00 area. I do not want to trade this market aggresively from the short side now that the 1100.00 area has been penetraded. Treatr as a trading market between 1080.00 and 1110.00.

Currencies: As of this writing the Jun. Euro is 36 lower at 1.2340, the Swiss 15 higher at .8685, the Yen 180 higher at 1.1105 and the Pound 110 lower at 1.4287. I am looking at the Euro as a trading affair between 1.2300 and 1.2500 for the moment. As you may recall over the last few weeks we have successfully traded the Yen from the short side on rallies above the 1.1000 level on several occasions. I am now looking to once again trade the Yen from the short side, but this time on rallies above the 1.1200 level.

Regards,

Marc