Financials: Dec. Bonds are currently 1’26 higher at 150’03 and the 10 Yr. Note 29 higher at 133’20. As expected, an Obama victory was friendly to Bonds as the market will percieve a continued policy of easing at the very least through 2013. Over the last couple of weeks I have posed the question in the “Report”, “Would you recognize an improving economy?”. I’m going to float the premise that things are slowly improving and that ultimately rates are going to slowly inch higher. That being said, I maintain my negative bias and will continue to look for trades from the short side of the market on rallies, not looking for a home run, but willing to take singles and doubles. Resistance is currently the 150’15-151’00 level, an area where I am willing to enter the market from the short side. Support is currently 148’08.
Grains: Dec. Corn is currently fractionally higher at 741’4, Jan. Beans 6’6 lower at 1508’6 and Dec. Wheat 4’6 higher at 881’6. Dec. Wheat has closed and is trading above the 40 day average of 873’2. If you take this buy signal I recommend using a protective sell stop at 850’0. If this market should trade above the 890’0 level raise your stop to break even of take profits. We remain long the Dec. Corn 800’0 call and the Mar. Corn 800’0/850’0 call spread with the intention of carrying them into the Crop Reports on Friday morning.
Cattle: Dec. LC is currently 10 lower at 125.57 and Jan. FC 15 lower at 146.57. Trends remain down but nearing support just below the 124.50 level in Dec. LC, a level where I will be willing to try the long side of this market. As for Jan. Feeder Cattle a close below the 145.50 level could signal a break to the 142.00 level. Of note: The long Hog/short Cattle spread may have bottomed out as this spread has narrowed more than 10.00 since mid September making Beef a bit more competitive with Pork.
Silver: Dec. Silver is currently 3 cents lower at 32.00 and Dec. Gold 9.00 higher at 1724.00. We remain long Silver.
S&P's: Dec. S&P’s are currently 13.00 lower at 1412.00. Through out the evening and this morning this market has had quite a range. The market opened early in the evening slightly lower then broke to 1411.00 before rallying to the 1431.00 level on news of a Dem. victory before breaking back to the lows this morning. I think overall the market is going to fall into a trading range from the low 1390’s to the mid 1420’s for the next few sessions. Long term support is the 1372.00 level.
Currencies: As of this writing the Dec. Euro is currently 55 lower at 1.2755, the Swiss 27 lower at 1.0581, the Yen 72 higher at 1.2512 and the Pound 11 lower at 1.5981. As expected the market has been quite volatile this morning with the Dollar initially weakening on the Dem. Victory with the perception that a continued policy of quantitative easing would have a negative effect on the Dollar. I will be a buyer below the 1.2625 level today if the market allows in the Dec. Euro.
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