Financials: Sept. Bonds are currently 6 lower at 127'26. This mornings Monthly Employment Report showed a decline in non-farm payrolls of 125,000 versus an average expectation of down 130,000. We continue to hold the combination of short Sept. Bonds and short the Sept. Bond 124'00 put. The market has now seemed to establish a bit of a trading range and I am once again comfortable looking at short term trades from the short side of the market using a close stop. Resistance is currently 128'10 and near term support 126'28.
Grains: Yesterday Nov. Beans closed 3 cents higher, Dec. Corn 11 higher and Dec. Wheat 17 higher. Over night Beans were 3 higher, Corn 2 lower and Wheat about 2 lower. I still like the long side of both Beans and Corn on a sharp break if the market allows. I will be a buyer in Nov. Beans below the 892'0 level. We remain long out of the money call spreads in Nov. Beans.
Cattle: Yesterday Live cattle closed slightly lower and Feeder Cattle moderately lower. The Feeder Cattle continued to lose to the Live Cattle as prices for feed grain continued their upward momentum. I will be a buyer on sharp breaks in the Live Cattle in either the Aug. or Oct. contracts. On a sharp break I will also be looking to buy the Feb. Cattle 100/106 call spread at 110 points ($440). Producers should be watching the Sept. and Oct. Feeder Cattle for hedging opportunities above the 115.00 level and Oct. Live Live Cattle above 93.00.
Silver: Sept. Silver is currently up 3 cents at 17.80. With the market now under the 17.90 level I recommend covering the short mini-silver futures contract portion of the combination trade of long the Dec. 20/22 call spread and short a mini-silver contract. This will leave you with only the Dec. call spread. I will be looking to the long side of this market below the 17.40 level.
S&P's: Sept. S&P's are currently 5.00 higher at 1026.75. The reaction to the Jobs Report was positive with the market initially rallying to the 1032.50 level before backing off to current levels. For the near term treat as a trading market between 1011.00 and 1042.00.
Currencies: As of this writing the Sept. Euro is 117 higher at 1.2598, the Swiss 5 lower at at .9419, the Yen 27 lower at 1.1417 and the Pound 42 higher at 1.5190. Yesterday saw quitie a bit of unwinding of short Euro/long Yen spreads and has continued this morning. We continue to have a bias to the short side of the Yen at present levels. If it wasn't for the long weekend I would also recommend the short side of the Euro but will wait until Tues. and take a look at it then. The Sept. Dollar Index is currently 52 lower at 84.465. Support for the Index is currently the 83.50 area, a level at which I will look top be a buyer.