Financials: Mar. Bonds are currently 5 lower at 142'14 and the 10 Yr. Notes 3 lower at 130'09. Once again it is all about Europe. Co-operation for the ECB to be the buyer of last resort for sovereign debt seems to be the main issue as the Bonds, Currencies and Equities bounce back and forth over speculation on the viability of the Euro. I feel the Euro will stay in tact, but as to the implication on the direction of the Bonds, I am relying on technical analysis for the near term and only using the futures market for short term trades. Support is currently 140'20 and resistance 143'18. I continue to recommend out of the money puts and/or put spreads in either the Bonds or Notes for Jan. or Mar. expiration.
Grains: Yesterday Beans closed 1 higher, Corn 7 higher and Wheat 3 lower. This mornings Crop Report showed the following: Corn: 12.3 billion bushels with a yield of 146.7 bushels per acre. Carryout was 848 million bushels up slightly from November's 843 million bushels. Beans: 3.045 billion bushels with a yield per acre of 41.3 bushels per acre. Carryout was 230 million bushels, up from 195 million bushels in Nov. I feel this reflects a slowdown in export demand, which is no surprise, given how far these markets have declined from contract highs. The early call is lower across the board. I currently have no position. That being said, users such as livestock producers should consider long hedges in Corn on breaks from current levels.
Cattle: Yesterday Feb. LC closed 17 lower at 119.60 and Jan. FC closed 25 lower at 142.47. These markets are currently 50-70 lower. If you continue to hold the combination of short Feb. LC futures and short the Feb. LC 118 put, either take profits or lower your buy stop to the 120.05 level.
Silver: Mar. Silver is currently 46 cents higher at 32.00. With out trying to sound like a broken record, if you remain long term bullish consider being long out of the money calls and/or call spreads.
S&P's: Mar. S&P's are currently 4.00 higher at 1234.00 (Mar. being the volume leader as of today and carries about a 6.00 discount to the Dec. and the spot index). If you remain short the Dec. contract from yseterday, I recommend covering the position and standing aside. As for the Mar. contract, support is currently 1222.00 and resistance 1248.00.
Currencies: As of this writing the Dec. Euro is trading unchanged at 1.3336, the Swiss 25 higher at 1.0813, the Yen 1 higher at 1.2877 and the Pound 27 lower at 1.5614. On Monday I will be quoting Mar. contracts. We remain long out of the money puts in the Euro and the Yen.
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