Financials: Jun. Bonds are currently 1'15 higher at 125'28. What can I say, more debt crisis news from Spain, et.al., saber rattling in N. Korea, declining consumer confidence and a strong Dollar has led to a renewed round of flight to safety in U.S. Treasuries. The long 10 Yr. Note/ short Bond spread is once again at about a $900.00 loss. I'm taking the loss and standing aside. Starting Monday the Sept. contract will be considered lead month.

Grains: Yesterday Beans were fractionally lower, Corn 2 higher and Wheat 4 lower. Over night Beans were 10 lower, Corn 5 lower and Wheat 4 lower. A strong Dollar and perceived world wide deflation have pressured all commodities this morning. Yesterday, the Beans gave a profit taking opportunity trading slightly above the 952'0 level (the high was 952'4). My recommended sell stop for remaining long July Bean positions was hit this morning when the market traded through the 933'0 level. We remain long out of the money calls in Nov. Beans and short the Sept. Corn 340'0/420'0 strangle.

Cattle: Yesterday Feeder Cattle were 100+ lower while Live Cattle closed about 40 points lower. We have covered all short speculative positions in Aug. Live Cattle. Producers should remain long out of the money puts. The market is trading 100+ lower this morning in both Feeder and Live Cattle.

Silver: July Silver is currently 37 cents lower at 17.62. We remain long a small position and will be looking to buy an out of the money call spread in the Dec. contract once the markets settle down in the coming week or so. I look for the market to continue the process of deleveraging in the next few days but feel that the recent $2.00 break in Silver prices may be adequate. That being said, I caution against adding at this time.

S&P's: Jun. S&P's are currently 27.50 lower at 1043.50. The market is currently well below yesterday's support of 1060.00. Continued worries over European sovereign debt and deflation have pressured the market this morning. I am on the sidelines.

Currencies: As of this writing the Euro is 180 lower at 1.2223, the Swiss 64 lower at .8590, the Yen 112 higher at 1.1168 and the Pound 115 lower at 1.4330. The Euro is continuing to hold the 1.2200-1.2300 level, but just barely. I recommend the sidelines. The Yen once again gave a selling opportunity above the 1.1200 level (today's high is currently 1.1209). This is about the third or fourth time we have been to the well, so to speak, with this trade so I am recommending that you use a close stop or take the short time profit. There is an old adage in this business: Double tops and bottoms hold, triple tops and bottoms are made to be broken.

Regards,

Marc