Financials: Dec. Bonds are currently 18 lower at 142'25 and the 10 Yr. Note 10 lower at 130'16. Yesterday we covered a recent short position from the 142'26 area. The market has since made a new recent high at 143'19 as the market once again went into risk off' mode as a result of the poor performance of a Spanish government bond offering yesterday which sent U.S. bonds higher and equities sharply lower. I am currently on the sidelines, and given the shortened Holiday week ahead of us, plan on staying that way for a few days.
Grains: Yesterday Beans were 19 cents lower, Corn 28 lower and Wheat 25 lower. Over night Beans were 6 higher, Corn fractionally higher and Wheat 2 higher. Yesterday's sell off appears to have been motivated by both Fund liquidation and a strong dollar. As mentioned yesterday I am looking at the long side of Mar. Corn and am now willing to go long.
Cattle: Yesterday Feb. LC closed 70 lower at 123.60 and Jan. FC closed 70 higher at 149.57. My bias remains to the short side of the market. Feeder Cattle short hedgers take note of recent rallies and start looking for hedging opportunities as far out as Sept. 2012.
Silver: Dec. Silver is currently 35 cents higher at 31.85. If you remain long term bullish, I recommend buying out of the money calls and/or call spreads because of their limited risk at this time.
S&P's: Dec. S&P's are currently 2.00 higher at 1216.00 after trading as high as 1229.75 overnight. This market remains extremely sensitive to European debt inspite of some friendly domestic economic news such as the recent Retail Sales Report. Technically the market penetrated yesterday's important (at least to me) 1219.00 support level. My bias remains to the short side of the market. Support is currently 1206.00 and resistance 1234.00.
Currencies: As of this writing the Dec. Euro is currently 71 higher at at 1.3535, the Swiss 50 higher at 1.0923, the Yen19 higher at 1.3022 and the Pound 41 higher at 1.5792. We remain positioned with futures and options for a break in the Yen. I also recommend being long out of the money puts and/or put spreads on either Jan. or Mar. Euro's.
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