Financials: Bonds are currently 21 higher at 126'30. Needless to say the Bonds are a full point higher than yesterday's letter. Some negative news out of China concerning lower than expected prices for a couple of major IPO's and Spain once again alerting the IMF and ECU to keep a watch has caused another wave of flight to quality. Technically the Bonds are flirting with highs made in April of 2009 (127'19). We remain short the Sept. Bonds and short the Sept. Bond 122'00 put which is currently at a loss. If the 127'19 level is penetrated I will reconsider the entire position.
Grains: Yesterday Nov. Beans closed 6 cents higher, Dec. Corn 8 cents lower and Dec.Wheat 4 lower. Over night Beans were 2 lower, Corn 2 lower and Wheat 7 lower. We remain on the sidelines until after tomorrows Grain Report. We remain long out of the money call spreads in Nov. Beans
Cattle: Yesterday Live Cattle closed slightly higher and Feeder Cattle 70-110 higher fueled by lower feed grain prices. Producers should continue to hold out of the money puts for price protection and consider selling out of the money calls on any sharp rallies. For those of you not hedged I feel that the 116.00 level in Aug. Feeders and the 91.00 level in Aug. Live Cattle are an attractive area for hedging. As for speculation, I am willing to go long Aug. Cattle below the 87.50 level if the market allows.
Silver: Sept. Silver is currently 30 cents lower at 18.43. We continue to hold the combination of long the Dec. 20/22 call spread and short a mini-silver futures contract. We originally paid about 50 cents ($2500) for the call spread. I recommend taking profits on the short futures if the market trades below the 17.90 level.
S&P's: Sept. S&P's are currently 30.00 lower at 1041.00. A poor consumer confidence report and negative news from China have pressured the market this morning. The market is currently trading at support and I would be willing to try the long side of the market with a tight stop (between 1030.00-1035.00)
Currencies: As of this writing the Sept. Euro is 116 lower at 1.2176, the Swiss 16 higher at .9224, the Yen 128 higher at 1.1327 and the Pound 39 lower at 1.5067. Take profits from short Sept. Euro 1.2800 calls. The Yen is now above the 1.1250 level and I am looking to go short by either selling futures, selling out of the money calls or buying out of the money puts.
Regards,Marc888.908.4310 | firstname.lastname@example.org