Financials: Sept. Bonds are currently 5 lower at 136'00 and the 10 Yr. Note 3 higher at 129'21. This morning's Housing Starts Report showed a decline of 1.5% slightly better than expectations of down 4.6%. Import prices were up o.3% vs. expectations of unchanged. I remain on the sidelines.

Grains: Yesterday beans were up 15 cents, Corn 5 higher and Wheat 10 higher. Over night Beans were 9 lower, Corn 6 lower and Wheat 4 lower. I recommend liquidating Sept. Corn call spreads before the week is out as expiration is nearing. Continue to hold Dec. Corn call spreads.

Cattle: Yesterday Oct. Live Cattle closed 35 lower at 120.10 and Oct. Feeder Cattle 37 higher at 139.075. I continue to have a negative bias to these markets.

Silver: Sept. Silver is currently 38 cents higher at 39.70. We continue to hold a small long position. Support is currently 36.00 and resistance 41.00. I recommend rolling Sept. positions into Dec. sometime next week. Dec. Gold is currently 22.00 higher at 1780.00. Support is currently 1730.00 with resistance in the 18.00 area. I prefer the short side of this market on rallies at the moment with buy stops above the contract highs of 1818.00 for protection.

S&P's: Sept. S&P's are currently 13.50 lower at 1185.00. Industrial Production was up 0.9% vs. expectations of 0.6%. Capacity Utilization was up 0.6% at 77.5% vs. expectations of 77.0%. These numbers are slightly friendly. Treat as a trading affair between 1175.00 and 1200.00.

Currencies: As of this writing the Sept. Euro is 54 higher at 1.4390, the Swiss 39 higher at 1.2799, the Yen 22 lower at 1.3010 and the Pound unchanged at 1.6381. We have taken profits on the sept. Swiss 1.20 put and are currently on the sidelines in Currencies. For the moment all eyes are on French President Sarkozy and German Chancellor Merkel as they meet to hash out the implementation on initiatives announced at the EU leaders summit in July. The biggest item will be the expansion of the bailout fund.

Regards,

Marc
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