Financials: Dec. bonds are currently 11 lower at 141'11 and the 10 Yr. Notes 2 lower at 130'17. I continue to remain on the sidelines, although I must admit that the temptation to buy the 10 Yr./ sell the 30 yr. spread at over 10'00 is near overwhelming. That being said, I choose to not stand in front of a freight train. I am still contemplating buying out of the money puts in either the Bonds or the 10 Yr. Note but haven't as yet acted on this impulse. I keep reminding myself as to how long rates have stayed exceptionally low in Japan.

Grains: Yesterday Beans closed 30 cents lower, Corn 9 higher and Wheat 2 lower. Over night Beans were 6 lower, Corn 5 lower and Wheat 5 lower. It appears that the supply Bulls won over the demand Bears in Corn for the moment. Support for dec. Corn is currently 728'0 and resistance just above the 760'0 level. We remain long from the 735'0 level. If the market trades above 754'0 today I recommend either taking profits or entering a protective sell stop just under the 740'0 level. I am on the sidelines in Beans.

Cattle: Yesterday Oct. Live Cattle closed about 90 higher at 119.40 and Oct. Feeder Cattle 70 higher at 135.325. We remain short the Oct. LC from above the 119.00 level.

Silver: Dec. silver is currently 43 cents higher at 40.65. I continue to remain on the sidelines. I will reinstate a long position below the 39.00 level if the market allows. Dec. Gold is currently 15.00 higher at 1828.00. I must admit that this market is too volatile for me to trade at present. That being said I feel somewhere down the road the market will test the 1710.00 level.

S&P's: Dec. S&P's are currently 1.00 higher at 1158.50. Yesterday the market found support in the low 1130's. We are currently on the sidelines with a bias to the long side on sharp breaks. Resistance is currently the 1165-1170.00 level.

Currencies: As of this writing the Dec. Euro is 60 higher at 1.3633, the Swiss 58 higher at 1.1368, the Yen 80 higher at 1.3024 and the Pound 5 lower at 1.5806. The Greek debt crisis is not going away. Banks have not adjusted their books and reserves to reflect the current value of these debt obligations and the possibility of default. I will be looking to revisit the short side of the Euro on a rally above the 1.3825 level if the market allows by purchasing out of the money puts. It is probably time to start asking the questions of what it will mean to the value of the Euro if Greece pulls out or defaults. On the other hand, is all the bad news priced in already? I welcome your comments on this debate. We also remain long the Oct. Yen 1.2400 put.

Regards,

Marc
888.908.4310 | 312.264.4310
mnemenoff@pricegroup.com