Financials: Bonds are currently 4 lower at 118'26. Support remains at 117'05 and resistance at 119'16. Of note is the fact that over the last few sessions the shorter end of the yield curve has been gaining slightly on the longer end (the yield has been slightly rising on the short end while the yield has fallen a few basis points on the long end). We remain long out of the money puts and/or put spreads on the June and Sept. Eurodollars.
Grains: Yesterday Beans were 13 cents lower, Corn 10 lower and Wheat 5 higher. Over night Beans were 6 lower, Corn 1 lower and Wheat 7 lower. Yesterday we were able to cover the combination of short the May Beans 1300'0 put and 1600'0 call below the 23'0 level putting us on the sidelines. Technically the grains look poised for a further correction to the downside but I caution against getting aggressively short these markets. I will be looking to the long side of May Corn below the 685'0 level if the market allows. Towards the end of the week I will have another recommendation for a strategy of being short a combination of puts and calls in either Corn or Beans.
Cattle: Yesterday Live and Feeder Cattle closed sharply higher reflecting slightly lower feed grain prices and the effects of the recent weather. Add to that the market feeling the results of the last few Cattle on Feed Reports which pointed to reduced herds. That being said I feel we are near the top, price wise, but I am not yet willing to venture on the short side with futures, but I am starting to look at selling out of the money calls.
Silver: Mar. Silver is currently 23 cents higher at 30.28. I remain on the sidelines having missed the last leg up on this market. For all you Gold Bugs consider the June 1450-1500 call spread at 7.00 ($700) as a way of playing the long side of the market with limited risk. For those of you keeping track, we remain long the Apr. Gold 1100 puts for which we paid about 1.70 ($170).
S&P's: Mar. S&P's are currently 2.00 lower at 1326.00. I still prefer the short side of this market. Support is currently 1313.00 and resistance 1337.00. Currencies: As of this writing the Mar. Euro is 36 higher at 1.3514, the Swiss 3 lower, the Yen 70 lower at 1.1930 and the Pound 113 higher at 1.6144. The Pound traded above my recommend buy stop of 1.6080 overnight taking us out of a recent short position and putting us on the sidelines. We remain long out of the money puts and/or put spreads on the Euro.
Senior Market Analyst, Price Futures Group
Publisher, Nemenoff Letter
Contact: 888.908.4310 | email@example.com