Financials: Sept. Bonds are currently 1'00 higher at 123'18. This morning's Retail Sales Report showed a disappointing decline of 1.2% versus expectations of of an increase of 0.2%. Yesterday we took profits on short Bonds/long 5 Yr. or 10 Yr.
Notes spreads once the Bonds traded below the 123'06 level. We are holding the combination trade of short Bond futures and short out of the money Sept. Bond puts. If you feel that this market is headed lower you might consider a less aggressive stance by being spread long 5 Yr. Notes/ short the 10 Yr. Notes.
Grains: Yesterday Beans closed 8 cents lower, Corn 5 higher and Wheat 5 higher. Over night Beans were fractionally lower, Corn 1 higher and Wheat frationally higher. Yesterday's supply/demand report showed ending stocks in Corn far below pre-report estimates resulting in a nearly 10 cent rally before backing off a bit, Beans were in line with expectations.
We remain long out of the money call spreads in Nov. Beans and short the Sept. Corn 340'0/420'0 strangle. If you are long July Corn I recommend raising your protective sell stop to the 339'0 level or taking the short term profit. If you are long July Beans raise your sell stop to the 923'0 level.
Cattle: Yesterday Live Cattle closed moerately higher and Feeder Cattle 60-100 higher. Over night Cattle are trading about 30 higher. We remain long Aug. Cattle with a protective sell stop below the 87.00 level (I recommend the 86.50 area). Producers should continue to hold long put positions as price insurance.
Silver: July Silver is currently 18 cents lower at 18.18. Yesterday the market failed at the 18.40 level. Support remains in the 17.30 area. I remain on the sidelines. S&P's: Jun. S&P's are currently 5.00 lower at 1078.75. The market is lower this morning after a disappointing Retail Sales Report. Near term support is currently 1064.00 and near term resistance 1086.00. I recommend the sidelines for the day. On Monday I will consider the Sept. contract as the lead contract which is currently at a 4.00 discount to the Jun.
Currencies: As of this writing the Sept. Euro is unchanged at 1.2096, the Swiss 33 lower at .8718, the Yen 33 lower at 1.0944 and the Pound 148 lower at 1.4554. Treat the Euro as a trading affair between 1.1950 and 1.2260. I will be looking to the short side of the Pound on a rally above the 1.4850 level if the market allows. The Sept. Dollar Index is currently 15 higher at 87.80.