Financials: Mar. Bonds are currently 1'14 lower at 143'12 and the 10 Yr. Note 18 lower at 130'18. We ended last year with a spread position of long 10 Yr. Notes/ short Bonds which continue to move our way. My inclination is to take profits. We will however continue to hold the long 5Yr. Note/ short 10 Yr. Note spread until the 10 Yr. Note yields more than 2% (current yield is about 1.9%).

Grains: Since my last letter (dated 12/20/2011) Grains, in particular Corn, have had quite a rally due to dry growing conditions in South America. If you remain long Mar. Corn either take profits or raise your protective sell stop from 576'2 to 625'0. The early call this morning is steady to higher.

Cattle: Like most other commodities Live and Feeder Cattle have moved higher since my last commentary. Producers should be looking for hedging opportunities in both Live and Feeder Cattle.

Silver: Mar. Silver is currently 83 cents higher at 28.75 and Apr. Gold 24.00 at 1592.00 Since my last letter these markets have broken substantially despite this mornings rally. Last week Silver made a low of 26.14 and Gold a low of 1523.00. I feel that these lows could hold and recommend being a buyer on breaks for the time being, keeping in mind that resistance in Silver is the 29.75 area and resistance in Gold the 1640.00 area.

S&P's: Mar. S&P's are currently 20.50 higher at 1273.00. Watch for resistance in the 1280.00 area. Support is currently 1243.00. If you remain long either take profits or use a protective sell stop at 1263.00.

Currencies: As of this writing the Mar. Euro is currently 80 higher at 1.3048, the Swiss 53 higher at 1.0722, the Yen 33 higher at 1.3043 and the Pound 68 higher at 1.5568.

My only positions coming into the New Year is long out of the money puts in both the Euro and the Yen, which I must admit do not look good at this time.

Regards, Marc
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