Financials: Mar. Bonds are currently 8 lower at 118'13. This mornings PPI report showed an increase in producer prices of 0.8% versus expectations of 0.9%. The core rate was 0.5% versus expectations of 0.2%. The core rate was the highest since Oct. of 2008 which indicates to me that inflation is of some concern. Bonds overnight came close to the 119'16 resistance level with a high of 119'11. Support remains at 117'05. We remain long out of the money puts and/or put spreads on the June and Sept. Eurodollars.
Grains: Yesterday Beans closed 34 cents lower, Corn 5 lower and Wheat 31 lower. Over night Beans were 5 lower, Corn 3 lower and Wheat fractionally lower. I will be interested in the long side of May Corn below the 685'0 level. For option traders: I am looking to sell the May Corn 660'0/740'0 strangle for 46'0 or better. This encompasses selling the combination of the May 660 put and selling the May 740 call.
Cattle: Yesterday Live Cattle closed slightly lower and Feeder Cattle moderately higher after being sharply higher early in the session. I still remain on the sidelines. That being said I am considering selling out of the money calls on the June contract as premiums are high. Stay tuned.
Silver: Mar. Silver is currently 6 cents lower at 30.64. We are on the sidelines in Silver. Yesterday I recommended going long the June Gold 1450/1500 call spread around 7.00, you might consider paying as much as 8.00.
S&P's: Mar. S&P's are currently 4.00 higher at 1330.25. Support remains at 1313.00 and resistance at 1337.00. I still like the short side of the market.
Currencies: As of this writing the Mar. Euro is 13 lower at 1.3476, the Swiss 41 lower at 1.0304, the Yen 6 lower at 1.1925 and the Pound 121 lower at 1.6006. We remain long out of the money puts in the Euro. If you want to go out as far as June options in the Euro I recommend put spreads as premiums are rather high.
Senior Market Analyst, Price Futures Group
Publisher, Nemenoff Letter
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