Financials: Dec. Bonds are currently 13 lower at 148’10 and the 10 Yr. Notes 6.5 lower at 133’00.5. This morning’s Weekly Jobless Claims showed a decline of 30,000 to 339,000 well below average estimates of 365,000. Continuing claims were down 15,000 to 3,273,000. Since my last Report dated Oct. 2nd, before I went out of town, my bias has turned from neutral to somewhat negative for the long term since the support level of 148’10 was penetrated. That being said, I am not quite ready to just jump in and establish a short position at current levels and suggest waiting for sharp rallies for selling opportunities. For the moment support is currently 147’09 and resistance 149’26.
Grains: Dec. Corn is currently 27’0 higher at 764’0, Nov. Beans 33’0 higher at 1566’6 and Dec. Wheat 11’4 higher at 881’2. This morning’s Crop Production and Supply/Demand Reports were somewhat friendly showing carryout below expectations on Corn and Beans and just above expectations for Wheat. Yields per acre were just below expectations on Corn at 122.0 bushels per acre vs. expectations of 122.7 for Corn and just above expectations at 37.8 bushels per acre for Beans. Total production was slightly above expectations for both Corn and Beans.
For the moment treat Dec. Corn as a trading market between 742’0 and 770’0 and Nov. Beans between 1520’0 and 1580’0.
Cattle: Dec. Live Cattle are currently 27 higher at 126.85 and Nov. Feeder Cattle 70 lower at 146.00. At the moment I am on the sidelines.
Silver: Dec. Silver is currently 8 cents higher at 34.20 and Dec. Gold 4.00 higher at 1769.00. We remain long Silver with an upside objective of $36.00-37.00. I will be a buyer in Gold below the 1720.00 level if the market allows.
S&P's: Dec. S&P’s are currently 10.00 higher at 1436.25. Over the last couple of sessions the market has penetrated the 1431.00 support level finding new support in the low 1420’s, lows which were established in early Sept. As stated in my last Report, my bias remains somewhat negative and that I expect an increase in volatility. Near term support is currently the 1423.00 area and near term resistance the 1441.00 area. We continue to hold slightly out of the money put spreads for both Oct. and Nov. expirations. Oct. options expire on Oct. 19th and I will be looking to liquidate Oct. options on breaks.
Currencies: As of this writing the Dec. Euro is trading 41 higher at 1.2946, the Swiss 48 higher at 1.0714, the Yen 63 lower at 1.2734 and the Pound 39 higher at 1.6040. I will be a buyer in the Euro below the 1.2650 level and a seller above the 1.3150 level.
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