Financials: Dec. Bonds are currently 22 lower at 141'12 and the 10 Yr. Note 8 lower at 130'09. These markets continue to react to European events revolving around the sovereign debt situation. My bias is once again to the sell side of the market on rallies above the 142'26 level for Dec. Bonds. Support is currently the 139'20 level and resistance the 143'04 area.
Grains: Yesterday Jan. Beans closed closed 19'2 lower at 1201'6, Dec. Corn 2'4 lower at 653'2 and Dec. Wheat 2'0 higher at 638'6. Over night Beans were 6 higher, Corn 2 higher and Wheat 1 higher. Prices have been relatively stable over the last few sessions with near term trens neutral. We still remain long out of the money calls and/or call spreads in Dec. Corn believing the long term trend is still positive.
Cattle: Dec. Cattle is currently 40 higher at 123.80 and Jan. Feeder Cattle fractionally higher at 146.85. As mentioned in my last letter we are currently on the sidelines. I feel for the near future the market will be sensitive to fluctuation in the Dollar as exports have become important to the demand side of the market. At the moment I still favor the long side of the Dollar and consequently prefer the short side of Dec. LC on rallies above the 124.50 level.
Silver: As of this writing Dec. Silver si currently 7 cents higher at 34.90. I still favor being long out of the money calls and/or call spreads for March 2012 expiration.
S&P's: Dec. S&P's are currently 7.00 higher at 1264.25. Treat as a short term trading market between 1235.00 and 1270.00. I prefer the short side of the market on rallies above 1265.00 at the moment. I am also interested in going short the Dec. 1280 call aobe 32.00.
Currencies: As of this writing the Dec. Euro is trading 40 higher at 1.3811, the Swiss 80 higher at 1.1183, the Yen 50 higher at 1.2868 and the Pound 30 higher at 1.6080. At the moment all eyes are on Italy which is now the 800 pound gorilla of sovereign debt. I am currently on the sidelines in the Euro but favor the short side of the market on rallies above 1.4000. We remain long out of the money puts in the Euro.
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