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

By IBTimes Staff Reporter | August 03 2010 10:03 AM

Financials: Bonds are currently 14 higher at 128'02. Near term support of 127'18 held yesterday as evidenced by this mornings higher market. Near term resistance remains at 128'28. As mentioned last week long term resistance could be as high as 132'00. The 30 Yr. Bond continues with a yield just above the 4% level, while the 10 Yr. Note yield remains under 3% at 2.92%. I am still hesitant to take a position in this market. What I am looking at, once again, is for an opportunity in the long 10 Yr. Note/ short Bond spread which is currently at 4'10 premium the Bonds. I will be interested in putting this spread on at 4'28 premium the Bonds if the market allows (Bonds will need a pretty good rally to attain this level on the spread).

Sponsorship Link

Grains: Yesterday Beans were 5 cents higher, Corn 2 lower and Wheat 29 higher. Over night Nov. Beans were 7'6 lower at 1002'2, Dec. Corn 3'0 lower at 401'4 and Dec. Wheat 2'4 lower at 721'0. My recommended sell stops in Nov. Beans and Dec. Corn at 1006'0 and 402'0 respectively have been penetrated taking us out of recent long positions from lower levels. We remain long out of the money call spreads in Dec. Corn. Yesterday both Beans and Corn came under pressure mid session due to hedging pressure (sales by farmers) at higher levels initiating a round of profit taking by speculators. The weekly crop progress report showed the crop to be in good shape, which is no surprise. The kink in conventional wisdom will be crops in other places such as Russia and China. I suspect surprises will be to the upside in the long run.

Cattle: Yesterday Live Cattle closed moderately lower and Feeder Cattle closed 100+ lower. Early in the session Live Cattle traded as high as 95.20, I had earlier recommended a buy stop against a recent short position in the 95.20 area. I was stopped out, unfortunately before the market broke 100 points from that level. If you remain short continue to use a protective buy stop just above 95.20. I still feel that producers should be looking for hedging opportunities in Oct. and Dec. Cattle and Oct. and Sept. Feeder Cattle.

Silver: Sept. Silver is currently 2 cents higher at 18.44. Yesterday the market momentarily traded above the 18.50 level (the high was 18.58). I am still awaiting a close above this level before I can predict higher prices. We remain long the Sept. 20/22 call spread.

S&P's: Sept. S&P's are currently 2.50 lower at 1119.00. Near term resistance of the 1113.00 level was penetrated to the upside leaving long term reisitance at 1129.50. Near term support is currently the 1102.00 level. We remain short the Sept. 1140 call from the 21.00 level.

Currencies: As of this writing the Sept. Euro is 45 higher at 1.3212, the Swiss 10 higher at .9630, the Yen 73 higher at 1.1639 and the Pound 31 higher at 1.5921. The Sept.Dollar Index is on new recent lows at 80.78. I recommend the sidelines.