The Nemenoff Report - Bonds Lower, S&P's Higher, Silver Higher

By IBTimes Staff Reporter | June 21 2010 10:44 AM

Financials: Sept. Bonds are currently 1'06 lower at 122'24. As I am sure you know by now, China may allow their currency to rise slightly against the dollar causing a rally in Equities and a break in Bonds. We remain short the Bonds and short the Sept. Bond 120'00 put. This trade is now at a $750+ profit depending on where you entered this combination position. You may want to take the profit. An alternative: On a further break in the Bonds, replace your short Bond position with a short 10 Yr. Note and keep the short Sept. Bond 120'00 put.

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Grains: On Friday Beans were 9 cents higher, Corn 3 higher and Wheat 1 lower. Over night Beans were 8 higher, Corn 5 higher and Wheat 7 higher. Excessive rain in growing regions and a weaker Dollar have supported the Grains this morning. If you remain long July Beans either take profits or raise your protective sell stop to the 957'0 level. If you remain long July Corn either take profits or raise your sell stop to the 360'0 level. We remain long out of the money call spreads in Nov. Beans.

Cattle: On Friday Live Cattle closed 40-50 lower and Feeder Cattle slightly lower. My recommended sell stop in Aug. Cattle aginst a recent long position at 88.20 was penetrated putting us on the sidelines. Friday's Cattle on Feed Report showed the following: On Feed 101% of a year ago versus expections of 110.8. Placements 123% versus expectations 122.3%. Marketings 96% versus 96.8%. I feel the report is somewhat neutral as all figures are close to expectations. The early call is slightly higher. I will be a buyer in Aug. Cattle below the 87.50 level if the market allows.

Silver: July Silver is currently 6 cents higher at 19.24. If you feel that this market is headed higher, I recommend going long the Dec. 20/22 call spread which is currently trading at about 57 cents ($2850) and sell a mini-silver futures contract as a protective measure.

S&P's: Sept. S7p's are currently 14.50 higher at 1125.00. The currency news out of China has rallied the market since the opening last night. Is this a case of buy the rumort sell the fact? We remain short the Sept. S&P 1140 call as a speculative play.

Currencies: As of this writing the Sept. Euro is trading 14 higher at 1.2385, the Swiss 4 higher at .9030, the Yen 68 lower at 1.0968 and the Pound 50 higher at 1.4846. We are currently short the Euro and/or short out of money calls. Over night the Euro rallied to a new recent high of 1.2477 on the China news before retreating. To be honest I have not figured out how the China news will affect the value of the Dollar against other currencies. I expect the Chinese currency will rise against all other currencies. The Sept. Dollar Index is currently 13 lower at 85.84. Support for the Index remains in the 85.50 level (the overnight low was 85.36).