Financials: Sept. Bonds are currently 6 higher at 125'17. Yesterday's New Home Sales Report was a disappointment, down nearly 33% at an annual rate of 300'000 versus expectations of 400,000. Also, the Fed left rates unchanged as expected noting the that the Global debt crisis could cause reason for concern of slowing economic activity. The action in Bonds was what you would expect, the Bonds rallied. We remain short the combination of short Bonds and short the Sept. Bond 120'00 put. This position is currently at a loss. I will carry this position until next week when I will reconsider whether to hold, modify the position or take the loss.
Grains: Yesterday July Beans were 7 cents lower, Corn 5 lower and Wheat 1 higher. Over night Beans were 4 higher, Corn 1 higher and Wheat 2 higher. We were stopped out of any remaining long July Bean positions when the market traded at the 957'0 level. We remain long out of the money call spreads in Nov. Beans. Next week my focus will turn to Nov. Beans and Dec. Corn as the July will be near first notice day.
Cattle: Yesterday Live Cattle closed about 30 lower and Feeder Cattle slightly higher. Declining feed grain prices appear to be adding support to the Feeder Cattle on breaks just below current market prices. I am still patiently waiting to once again go long Aug. Live Cattle on a break below the 87.50 level if the market allows.
Silver: July Silver is currrently 9 cents lower at 18.40. My only recommendation remain a combination of being long the dec. Silver 20/22 call spread and short a mini-silver contract as a means of limiting risk. If the July Silver trades below the 18.00 level, look for a place to cover the mini-silver contract.
S&P's: Sept. S&P's are currently 4.50 lower at 1083.00. Support has been tested in the 1079.00 area and for the moment is holding. If the 1079.00 level is penetrated and the market trades below 1075.00, longer term support will come into play in the 1040.00-1050.00 area, a level where I am willing to try the long side of the market. We remain short the Sept. 1140.00 call from the 34.00 level (currently trading around 24.00). I am looking for a profit taking opportunity below 23.00.
Currencies: As of this writing the Sept. Euro is 6 lower at 1.2323, the Swiss 7 higher at .9084, the Yen 49 higher at 1.1196 and the Pound 28 higher at 1.4992. Yesterday we covered our short Euro futures postions. We do, however, remain short the Sept. Euro 1.2800 call. As mentioned yesterday I am looking to the short side of the Yen above 1.1250 by either selling futures or using options (either selling out of the money calls or buying out of the money puts) for a short term play (1-5 days).