Financials: Sept. Bonds are currently 30 higher at 151'17 and the 10 Yr. Note 12 higher at 134'27. Support remains in the 150'02 area and resistance in the 152'10 area. The market has been shifting in the last couple of sessions between risk on and risk off modes and ultimately going nowhwere, just a trading affair.
Grains: Over night Dec. Corn is 9'4 higher at 788'0, Nov. Beans 22'0 higher at 1674'2 and Dec. Wheat 1'0 lower at 933'0. Trying not to state the obvious, Corn and Beans are at record highs due to drought conditions in key growing areas East of the Mississippi. Technically Dec. Corn has a chart count objective of 820'0 to 840'0 if the market can settle above the 800'0 level. Admittedly I have missed this last leg to the upside from the 750'0 level to present prices and currently fear the kind of high volatility a change in the weather will produce. As mentioned earlier in the week, I am recommending that producers (short hedgers) in addition to the us of puts consider hedging 25% of your exposure in futures.
Cattle: Aug. LC are currently 30 lower at 118.65 and Aug. FC 1.50 lower at 137.60. As mentioned in Tuesday's letter I wantede to be a buyer on breaks. Since that time Aug. Live and Feeder Cattle have had substantial rallies. If you bought Tuesday's break, take profits and stand aside. Starting Monday I will be quoting the October contracts.
Silver: Sept. Silver is currently 36 cents lower and Aug. Gold 5.00 lower at 1575.00. We continue to hold a small long position in Silver. We remain on the sidelines presently in gold and will once again be a buyer below the 1560.00 level if the market allows.
S&P's: Sept. S&P's are currently 8.50 lower at 1363.50. I continue to have a negative bias at current prices. Treat as a trading market between 1356.00 and 1373.00. At this time I am hesitant to hold a long term position.
Currencies: As of this writing the Sept. Euro is trading 80 lower at 1.2207, the Swiss70 lower at 1.0166, the Yen 1 higher at 1.2734 and the Pound 50 lower at 1.5670. Over the last couple of weeks I have been recommending the long side of the Euro on breaks below the 1.2200 level for short term trades. Today, I am just going to watch and see how the market acts as it drifts below the 1.2200 level (current low for the day, 1.2194). I'm reminded of an old adage double bottoms hold, triple bottoms are meant to be broken.
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