Financials: Sept. Bonds are currently 1 lower at 128'03 and the 10 Yr. Notes 3 higher at 125'25. The 10 Yr. Note/ Bond spread is currently trading at 2'10 premium the Bonds. It seems the Dem's. and Repb's. are about to work out a debt ceiling deal and the grownups are once again in charge and the theater of it all will be over for at least the near term. The conversation will now probably revolve around around the Bond rating and will the various agencies continue to rate U.S. debt AAA. Our only position at this time is being spread long 10 Yr. Notes/ short Bonds from the 2'07 level premium the Bonds.
Grains: On Friday Sept. Beans closed 14 cents lower, Corn 16 lower and Wheat 20 lower. Over night Beans were 15 higher, Corn 8 higher and Wheat 12 higher. A lower Dollar and lack of precipitation over the weekend have helped boost the markets over the weekend. Support for Dec. Corn has held in the 665'0 level for the moment. We remain long call spreads in Sept. and Dec. Corn.
Cattle: On Friday Live Cattle closed about 100 higher in the nearby Aug. contract and Feeder Cattle closed moderately higher. Aug. LC is now approaching resistance just above the 113.00 level. Aug. FC continued to hold support in the 135.00 area. Resistance for Aug. FC is in the 139.00 area.
Silver: Sept. Silver is currently 56 cents lower at 39.55. We continue to hold a small long position. Resistance remains in the 41.00 area. Dec. Gold is currently 10.00 lower at 1621.00. Support for Dec. Gold is currently 1304.00 and resistance 1634.00.
S&P's: Sept. S&P's are currently 4.00 higher at 1292.00 after trading as much as 21.00 higher (the over night high was 1309.75) after the announcement of a possible Debt Ceiling agreement. We continue to hold a combination of short futures and short the Sept. 1300 put.
Currencies: As of this writing the Sept. Euro is 30 lower at 1.4317, the Swiss 139 higher at 1.2820. the Yen 52 higher at 1.3034 and the Pound 104 lower at 1.6320. Of note: the Yen and the Swiss are on new high ground. I feel the Dollar is oversold at present levels especially against the Swiss. That being said, I cannot recommend putting on a futures position at the present time as being short is like trying to "stand in front of a freight train". If you want a position in any of the currencies, I recommend purchasing out of the money options.
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