The Nemenoff Report Bonds higher, S&P's Lower, Silver Lower

By IBTimes Staff Reporter | August 10 2010 10:08 AM

Financials: Sept. Bonds are currently 1 tick higher at 129'12. The market is awaiting today's announcement on interest rates by the FOMC at 1:15 Chicago time. I believe there will be an indication of easing of some sort, whether an outright easing of the discount rate, Fed Funds or continued purchases by the Fed of treasuries in an effort to tkeep rates low. It is probably time to start watching the money supply, funds to purchase treasuries have to come from somewhere.

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If there is continued growth in the money supply, I feel that long term rates will eventually start to rise. All that being said, I'm still not willing to enter this market yet and prefer the sidelines. My bias is toward the short side on sharp rallies and this isn't the right side of the market yet. The long 10 Yr. Note/ short Bond spread is currently at 4'29 premium the Bonds, attractive yes, but not showing signs of topping out. Near term support is currently 128'08 and near term resistance 129'28. Long term resistance is the 132'00 level.

Grains: Yesterday Nov. Beans closed 1 higher, Dec. Corn 2 lower and Dec. Wheat 11 lower in a trade which saw the market trade both sides of settlement. Over night Beans were 12 cents lower, Corn 5 lower and Wheat 8 lower. A strronger Dollar has added a bit of downward pressure this morning. Thursday morning there will be Crop Production and Supply/Demand Reports. Early average estimates for ending stocks are 1.307 billion bushels for Corn, 0.334 billion bushels for Beans and 0.982 for Wheat. We remain long out of the money call spreads in Dec. Corn. Support for Dec. Corn is currently 406'0 and resistance 438'0. Support for Nov. Beans is currently 1014'0 and resistance 1050'0. I am once again looking to the long side on sharp breaks in Nov. Beans and Dec. Corn.

Cattle: Yesterday Live Cattle closed slightly lower and Feeder Cattle slightly lower in nearby contracts to slightly higher in deferred contracts. I remain on the sidelines as far as speculative positions are concerned. Hedgers should contniue to hold either short futures positions or long put positions. If you are holding puts that are more than 3.00 in the money in Feeder Cattle, consider rolling them down to lower strike prices.

Silver: Sept. Silver is currently 20 cents lower at 18.04. We contniue to hold the Dec. Silver 20/22 call spread. As for futures, I remain on the sidelines. If the market should trade below the 17.50 level, I will start looking to accumulate a small long position.

S&P's: Sept. S&P's are currently 15.00 lower at 1110.50. We contniue to have a short bias to this market. We are currentlyt short the Sept. 1140 calls. Near term support remains at 1104.00 and resistance the 1129.00 area. If support is broken, longer term support will be the 1086.00 level.

Currencies: As of this writing the Sept. Euro is 122 lower at 1.3103, the Swiss 111 lower at at .9426, the Yen 35 lower at 1.1617 and the Pound 183 lower at 1.5713. These markets may be rolling over to the downside. Stay tuned. The Sept. Dollar Index is currently 76 higher at 81.55.