Financials: Sept. Bonds are currently 20 lower at 152'06 and Sept. 10 Yr. Notes 10 lower at 134'29.5. Weekly Jobless Claims were down by 35,000 vs. expectations of down 12K. Durable Goods were up 1.6% vs. expectations of up only 0.6%. Also Mario Draghi of the ECB announced that the ECB will do whatever it takes to preserve the Euro. All of this has pushed the Bonds slightly lower from recent highs just above the 153'00 level, not very impressive. The market now looks to next week's FOMC meeting to see about the possibility of another stimulus package and/or Quantitative Easing in an effort to drive already historic low rates even lower. "Don't Fade the Fed". I am on the sidelines.
Grains: Dec. Corn is currently 3'0 higher at 791'0, Nov. Beans 8'2 lower at 1607'2 and Dec. Wheat5'0 lower at 910'0. Over the last two sessions Dec. Corn has traded at both support of the 745'0 area and resistance of the 792'0 area. I am currently comfortable treating Dec. Corn as a trading affair between these levels with 12'0 cent protective stops. Producers (short hedgers) should continue to use out of the money puts for price insurance and consider using futures for as much as 25% of your hedging needs. Possible top in Nov. Beans.
Cattle: Oct. LC are currently 30 higher at 123.325 and Oct. FC 30 higher at 139.80. These markets continue to be range bound between 121.50-124.50 for Oct. LC and138.00-144.00 for Oct. FC rallying and breaking inversely depending on the daily direction of feed grain prices (rallying when Corn breaks). A close above 124.50 in Oct. LC could indicate an upside breakout.
Silver: Sept. Silver is currently 13 cents higher at 27.60 and Aug. Gold 6.00 dollar higher at 1614.00. We remain lightly long Silver. As for Gold we are carefully watching the 1626.00 resistance level (the July 3rd high was 1625.70). Starting Monday we will be quoting the Oct. contract to avoid a delivery situation for Aug. contracts. Support is now the 1584.00 area, up from 1560.00.
S&P's: Sept. S&P's are currently 16.00 higher at 1351.00. Early this morning the market rallied sharply from the 1328.00 level on statements made by the ECB's Mario Draghi concerning preservation of the Euro. As mentioned in Tues. letter support should hold in the 1324.00-1328.00 area. If you went long, take profits. The market is currently near resistance of the 1353.00-1356.00 area.
Currencies: As of this writing the Sept. Euro is currently 136 higher at 1.2303, the Swiss 116 higher at 1.0251, the Yen 13 lower at 1.2798 and the Pound 185 higher at 1.5692. Statements from the ECB this morning has caused short covering in the Euro in addition to some outright buying. Reading through the statements concerning possible European Quanitative Easing, buying of government bonds and possible outright printing of money leaves me leery of any long term positive outcome. Is this "Rearranging deck chairs on the Titanic?".For the moment treat the Euro as a trading affair between 1.2225 and 1.2475. I will once again be looking to establish a short position with either futures or put options if the market should rally above the 1.2500.
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