Financials: Dec. Bonds are currently 9 higher at 146’30. This mornings Weekly Jobless claims were up 46K vs. expectations of up 23K causing Bonds to rally off of recent lows of 146’10. Earlier in the week we took profits from recent short positions in the 148’15 area. To be honest I am a bit surprised that the market traded as low as it did over the last couple of sessions taking out near term support in the 147’09 area. For the long term I still remain overall negative but feel that it is important to wait for sharp rallies to sell into this market keeping in mind Fed action in regards to Quantitative Easing and “Operation Twist”. For the near term support is currently 146’12 and resistance the 149’00 area.
Grains: Dec. Corn is currently 3’4 higher at 749’0, Nov. Beans 14’4 higher at 1523’6 and Dec. Wheat 7’6 higher at 864’0. As mentioned earlier in the week the Grains for the moment have reached my downside objectives. I am now looking to the long side in Dec. Corn on sharp breaks with support in the 725’0-735’0 area. For those of you that feel that the supply fundamentals remain bullish for Corn consider going long the Dec. Corn 800’0 call for around 6 cents. This is a low risk way to be long.
Cattle: Dec. Cattle are currently 60 higher at 128.20. Resistance in the 127.50 has been penetrated and I am on the sidelines waiting to see if the market can have consecutive closes above the resistance level of 127.50. We have taken profits from long biased trades. Nov. FC are currently 20 higher at 149.50 and have now retraced the sharp losses as a result of last weeks Grain Report. Producers should be considering inexpensive out of the money puts for price insurance.
Silver: Dec. Silver is currently 38 cents lower at 32.83 and Dec. Gold 11.00 dollars lower at 1742.00. We remain long Silver. I will be looking to the long side of Gold on breaks below the 1720.00 level.
S&P's: Dec. S&P’s are currently 5.00 lower at 1452.00. Earlier in the week we tried the short side of the market only to be stopped out with a loss when the market traded above the 1451.00 level. My bias still remains negative. Near term support is currently 1443.00 and near term resistance 1459.00. Longer term, resistance is the 1468.00 area. We continue to hold out of the money put spreads for Nov. expiration. If your short leg of Nov. put is trading below 5.00 ($250.00) I recommend covering this leg of the spread and remain long the long leg of the spread.
Currencies: As of this writing the Dec. Euro is currently 27 lower at 1.3105, the Swiss 14 lower at 1.0843, the Yen 48 lower at 1.2620 and the Pound 24 lower at 1.6125. Yesterday provided a selling opportunity in the Euro near the 1.3150 level (the high was 1.3147). If you went short either take the short term profit or use a protective buy stop at your break even level.
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