Financials: Mar. Bonds are currently 3 lower at 119'31. Yesterday the Fed left short term rates and Fed Funds unchanged. They also indicated that they will continue with QE2, continuing the purchase of $600B worth of medium to long term treasuries. The immediate reaction was a bit of a rally then a late in the session break to below the 120'00 level. We have covered all short positions in the Bonds. Support is now the 119'16 level and resistance remains in the 121'14 area. We remain long out of the money puts and/or put spreads in the June and Sept. 2012 Eurodollars.

Grains: Yesterday Beans closed 11 higher, Corn 13 higher and Wheat 18 higher. Over night Beans were fractionally lower, Corn 2 higher and Wheat fractionally lower. If you remain long Corn or Beans I recommend either taking profits or raising your sell stop to within 5 cents of current prices. We are now on the sidelines.

Cattle: Yesterday Live and Feeder Cattle showed 100 point gains on nearby contracts. I will try the short side of these markets 100 points above yesterday's settlement in either the Apr. Live Cattle of the Mar. Feeder Cattle with protective buy stops initially just above the contract highs.

Silver: Mar. Silver is currently 37 cents higher at 27.51. We remain long futures with a protective sell stop $1.00 below our entry level. I recommend liquidating out of the money call spreads at this time. We also remain long the Apr. Gold $1100 put. Of note: NY Gold and Silver pit traded option markets are having a delayed opening this morning due to the weather.

S&P's: Mar. S&P's are currently 1.00 lower at 1292.50. I remain neutral to friendly. Near term support remains at the 1278.00 level and near term resistance remains at 1295.00.

Currencies: As of this writing the Mar. Euro is currently 57 higher at 1.3732, the Swiss 15 higher at 1.0613, the Yen 43 lower at 1.2084 and the Pound 100 higher at 1.5975. We remain long out of the money puts in the Euro. I feel that Europe's sovereign debt problem is far from being solved and recommend using the current rally as a selling opportunity in the Euro, That being said I recommend using a smaller position than usual (there is a mini contract, ½ the size of the full contract) and risking about 100-125 points for a short term trade.

Regards,

Marc Nemenoff
Senior Market Analyst, Price Futures Group
Publisher, Nemenoff Letter
Web: http://www.pricegroup.com/commentaries_marc%20nemenoff.asp
Contact: 888.908.4310 | mnemenoff@pricegroup.com