Financials: Sept. Bonds are cuurently 7 lower at 129'10. As mentioned last week, I am currently on the sidelines. The feature this week will be the FMOC meeting which many are speculating will result in quantitative easing . With the 30 Yr. yielding 4%, the 10 yr. 2.82% and the 5 yr and 2 yr. at record low yields, I do not know how much more the Fed can ease. Could 90 day TBills go much below 0.1%? I continue to watch the spread between the 10 Yr. and 30 Yr. which is now 4'28 premium the 30 Yr. My inclination is to go long the 10 Yr./ short the 30 Yr., but I will wait until aftrer the FMOC meeting.
Grains: On Friday Nov. Beans were 4 cents higher, Corn 2 higher and Wheat down the 60 cent limit. Over night Beans were 4 cents higher, Corn fractionally lower and Wheat down 18 cents. I believe that volatility in Wheat due to the ban on Russian exports will dominate these markets in the near future. I remain biased to the long sie of the market on sharp breaks. We remain long out of the money call spreads in Dec. Corn. If your spread comes fully into the money, I suggest either taking profits or rolling up into higher strike prices. Producers should be looking for hedging opportunities by either purchasing out of the money puts or selling futures. Users of Corn should consider purchasing out of the money calls (above the 430'0 strike price).
Cattle: On Friday Live Cattle closed 12-77 lower depending on the contract month and Feeder Cattle about 30 lower. I remain on the sidelines as far as a speculative position is concerned. Producers should be looking for hedge opportunites in Oct. and Dec. Cattle.
Silver: Sept. Silver is currently 4 cents lower at 18.43. I am still waiting for a close above the 14.50 level before I feel comfortable holding a futures position. We remain long the Dec. 20/22 call spread.
S&P's: Sept. S&P's are currently 3.50 higher ar 1123.00. Near term support of 1104.00 and resistance of 1129.50 continue to keep this market range bound. We remain short the Sept. 1140 call from the 21.00 level with an objective of covering at 8.00.
Currencies: As of this writing the Sept. Euro is 30 lower at 1.3244, the Swiss 48 lower at .9594, the Yen 36 lower at 1.1672 and the Pound 26 lower at 1.5937. Of note is that the Euro is running into resistance above the 1.3300 level and the Pound has some resistance above the 1.6000 level. The Sept. Dollar Index is currently 15 higher at 80.65. I remain on the sidelines.