Financials: Bonds are currently 10 lower at 117'18. The market continues to react to Friday's announced drop in the Unemployment from 9.5% to 9.0%. The market is also reacting to the higher commodity prices which should translate into a higher rate of inflation. We remain on the sidelines in the Bonds after being bearish for some time, i.e. I feel the market is getting ahead of itself and is currently in an oversold situation. We remain with our long term trade of being long out of the money puts and/or put spreads in the June and Sept. 2012 Eurodollars. As mentioned Friday, I recommend using the current break in Eurodollars to bank some profits if you are long multiple contracts (of puts) by either rolling your position to lower strike prices or just selling off a portion of your position.

Grains: On Friday Beans closed 2 lower, Corn 15 higher and Wheat 6 lower. Over night Beans were 9 higher, Corn 3 higher and Wheat 8 higher. We continue to hold the combination of short the May Beans 1260 put and short the May Beans 1600 call. Today I will be covering the 1260 put and replacing it with either the 1300'0 or 1320'0 put.

Cattle: Live Cattle is currently slightly higher and Feeder Cattle slightly lower. If you remain short either Apr. Cattle or Mar. Feeder Cattle either take profits or lower your protective buy stop to 100 points below your break even level.

Silver: Mar. Silver is currently 12 cents higher at 29.18. I remain on the sidelines.

S&P's: Mar. S&P's are currently 7.00 higher at 1314.00. Trend remains up and I remain on the sidelines. As I said on Friday, my gut reaction is to sell rallies, but, I am waiting for a better reason than my gut to enter this market.

Currencies: As of this writing the Mar. Euro is 60 lower at 1.35230, the Swiss 20 lower at 1.0450, the Yen 10 lower at 1,2152 and the Pound 5 higher at 1.6095. If you remain short the Euro either take profits or lower your buy stop to the 1.3615 level. If this market trades below the 1.3500 level lower your buy stop to the 1.3585 level.

Regards,
Marc Nemenoff
Senior Market Analyst, Price Futures Group
Publisher, Nemenoff Letter
Web: http://www.pricegroup.com/commentaries_marc%20nemenoff.asp
Contact: 888.908.4310 | mnemenoff@pricegroup.com