Financials: Dec. Bonds are currently 6 lower at 141'17 and the 10 Yr. Notes 1 lower at 130'16. Housing starts were down 5.0% vs. pre-report average of estimates of down 2.3%. Redbook Retail Sales were up 4.1% from the same week a year ago. For the same 3 weeks vs. Aug retail sales were flat and for the same 3 weeks of Sept. vs. a year ago up 4.5%. The FOMC two day meeting starts today. It is expected to comment on a stimulus package that could hold long term rates steady for the near future. As I have mentioned over the last few weeks long term rates are too low for me to play the long side of the market. If you feel as I do that rates are too low, I feel the only way to play the market is with the relative safety (limited risk) of options.
Grains: Yesterday Beans closed 19 cents lower, Corn 1 higher and Wheat 15 lower. Over night Beans were 13 cents higher, Corn 11 higher and Wheat 11 higher. Yesterday's weekly Crop Progress Report showed the Corn crop moving toward maturity with the harvest slightly behind (by 1%) the five year average. Yesterday's turn around in Corn puts support in Dec. Corn just below the 680'0 level. Resistance is currently 712'0. I am looking to take a loss on my Dec. Corn futures long position and happy that the loss has been trimmed. I will remain long Dec. Corn out of the money calls and/or call spreads.
Cattle: Yesterday Oct. Live Cattle closed 87 lower at 117.62 after making a low of 117.20 providing a profit taking opportunity from recent short positions above the 119.00 level. If you remain short lower your protective buy stop to just under your break even level.
Silver: Dec. Silver is currently 35 cents higher at 39.51. I remain on the sidelines awaiting a break below the 39.00 level to reinstate long positions if the market allows.
S&P's: Dec. S&P's are currently 3.00 higher at 1201.00. Yesterday the market reacted to both a downgrade from A+ to A on Italian debt and to somewhat positive news from Greece overnight about debt restructuring and austerity measures. Sounds to me like rearranging deck chairs on the Titanic. I continue to have a short bias to this market. Support is now the 1176.00 level and resistance 1208.00. A close above the 1216.50 level could change my bias.
Currencies: As of this writing the Dec. Euro is currently 16 higher at 1.3674, the Swiss 56 lower at1.1304, the Yen 14 lower at 1.3075 and the Pound 6 higher at 1.5684. My recommended buy stop against short positions in the Euro at 1.3710 was reached overnight. We remain long out of the money puts in the Yen.
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