Financials: Sept. Bonds are currently 23 lower at 139'16 and the 10 Yr. Note 15 lower at 130'10. As I mentioned Friday, these markets look very attractive for a short sale but I am going to hold myself back and look to the options market (either Oct. or Dec.) for either puts and/or put spreads that are both cheap and out of the money. Will there be QE3, a question that is gaining currency from many analysts?
Grains: On Friday Nov. Beans closed 7 higher at 1368'4, Dec. Corn 12 higher at 725'2 and Dec. Wheat 22 higher at 761'2. Over night Beans were 14 higher, Corn 8 higher and Wheat 11 higher. We remain long call spreads in Dec. Corn. You might consider rollin the long leg of any call spreads into a higher strike price and taking some money off the table.
Cattle: Friday's Cattle on Feed Report showed the following: On feed 108% of a year ago, in line with expectations. Placed in July 122% of a year ago vs. pre-report expectations of 117%. Marketed 100% of a year ago vs. expectations of 96%.Early expectations are for a lowering opening this morning because of the on feed figure, which is more bearish than the marketing figure which was constructive. If you remain short Oct. Cattle continue to use a protective buy stop at 116.80. If you remain short Oct. Feeders continue to use a protective buy stop at 135.50. If these markets trade 75 lower or more this morning, lower your stops by a like amount or take profits.
Silver: Sept. Silver is currently 75 cents higher at 43.15 after making an overnight high of 44.08. We continue to hold a small long position. I suggest rolling Sept. positions into Dec. before the end of the week.
S&P's: Sept. S&P's are currently 16.00 higher at 1140.00. Support remains at 1117.50 and resistance remains in the 1153.00. I prefer the long side of the market on breaks at this time.
Currencies: As of this writing the Sept. Euro is 36 higher at 1.4418, the Swiss 10 higher at 1.2723 and the Pound 12 higher at 1.6489. I remain on the sidelines.
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