Financials: Sept. Bonds are currently 10 lower at 124'02. Friday's jobs report and news of financial problems in Hungary drove the markets sharply higher. The market is now looking at the news from Hungary as somewhat exaggerated as they have taken austerity steps over the last year and have arranged credit lines with the IMF and ECB. What will keep the Bonds at current lofty levels is not the fear of a collapse in Hungary but the prospect of only slight growth in Europe as a whole. Until the picture becomes more clear I prefer to trade this market with either options, option spreads or spreads such as the 10 Yr. Notes against the Bonds. On Friday we tried the short side of the market only to be stopped out when the market traded above the 123'28 level.

Grains: On Friday Beans closed 20 cents lower, Corn 9 lower and Wheat 6 lower. Over night Beans were 1 lower, Corn 3 lower and Wheat fractionally lower. We have been stopped out of a recent long position in the July Corn in the 337'0 area. We remain long out of the money call spreads in Nov. Beans and short the Sept. Corn 340'0/420'0 strangle. The Corn strangle is currently trading around 21'0. I will be looking to take profits if the strangle trades below the 16'0 level (we originally sold this strangle at 24'4).

Cattle: On Friday Live Cattle closed 115-150points lower and Feeder Cattle 60-90 lower. Aug. Live Cattle are near support in the 87.50-88.50 area. I will be looking to try the long side Aug. Cattle on any further breaks by either buying futures, going long calls or going short out of the money puts. Producers should continue to hold put positions as price insurance.

Silver: July silver is currently 7 cents higher at 17.37. We were stopped out of long positions on Friday when the market traded through the 17.37 level. I will stay on the sidelines for the day.

S&P's: Jun. S&P's are currently about unchanged at the 1066.00 level after being sharply lower last evening before rallying to slightly higher throughout the early morning hours as European currencies appeared to strabilize. Near term support is currently 1053.00 and near term resistance 1079.00. I prefer to stay on the sidelines.

Currencies: As of this writing the Sept. Euro is 28 lower at 1.1949, The Sept. Swiss 4 lower at .8628, the Sept. Yen 29 lower at 1.0926 and the Sept. Pound 67 higher at 1.4528. The Euro made a new recent low overnight at 1.1884, close to long term support of 1.1800. I am current on the sidelines and will wait and see if these market can rally a bit before looking for an opportunity to hold out of the money put spreads in the Euro. For short term traders I expect the Euro to start moving into a sideways trend between 1.1800 band 1.2300 and will treat as a trading market from both sides of the market. As mentioned earlier in this report the market has already seemed to dismiss the debt news from Hugary but will be looking to Europe as whole to monitor the degree of slowturn in growth.

Regards,

Marc