Financials: Sept. Bonds are currently 29 lower at 124'30 and the 10 Yr. Notes 12 lower at 123'30. The NOB spread is currently at 1'00 premium the Bonds. This spread (10 Tr. Notes/ Bonds has been fluctuating between 0'16-1'20 premium the Bonds for the last week. Disappointment over little or no resolution over the weekend concerning the debt ceiling has pressured the Bonds et.al., and given rise to rumors of a lowering from AAA rating. We remain on the sidelines. Support for Sept. Bonds remains at 124'28 and resistance 126'20.

Grains: On Friday sept. Beans closed fractionally lower, Corn 10 hihger and Wheat 15 higher. Over night Beans were 9 lower, Corn 7 lower and Wheat 6 lower. An easing of temperatures in growing regions has put some pressure on prices for the moment. We remain long out of the money call spreads in Sept. and/or Dec. Corn. Support for Dec. Corn remains at 654'0 and resistance at 692'0. Treat as a trading market between support and resistance.

Cattle: On Friday Live Cattle closed moderately higher and Feeder Cattle 150+ higher. Friday's Cattle on Feed Report showed the following. On Feed 104% of a year ago. Placements 104% of a year ago. Marketings 105% of a year ago. The Placement figure was the big surprise, coming in about 8% higher than expected, indicating to me that Cattle are being taken off of grass in drought ridden areas and put on feed at lighter weights. My guess is that the Cattle and Feeders will start the day lower with the most pressure on deferred contracts. Support remains at 109.00 for Aug. LC and 135.00 for Aug. FC.

Silver: Sept. Silver is currently 43 cents higher at 40.54. We contniue to hold a small long position. I look for resistance in the 41.00-42.00 area. Gold is on new highs above the 1615.00 level. My gut feeling is that Gold is overdone on the upside and that any progress made over a comprise on the Debt Ceiling will cause a break in Gold.

S&P's: Sept. S&P's are currently 11.00 lower at 1330.00. We remain short this market from current levels. Support remains in the 1323.00 for the near term and 1308.00 longer term. Resistance is currently 1338.00 for the near term and 1350.00 longer term. Over night the market opened about 13.00 lower and made a low of 1322.00, again because of no resolution over the debt ceiling.

Currencies: As of this writing the Euro is unchanged at 1.4344, the Swiss 220 higher at 1.2448, the Yen 37 higher at 1.2791 and the Pound 17 lower at 1.6279. We remain long the Aug. Swiss 1.1500 put which is now nearly worthless. We have been stopped out of short Swiss positions.

Regards,

Marc
888.908.4310 | 312.264.4310
mnemenoff@pricegroup.com