Financials: Mar. Bonds are currently 9 lower at 120'16. I still feel that Bonds are range bound between 119'18 and 122'08 for the near term. Continue to treat as a trading market. Balance of trade this morning was somewhat better than expected at a deficit of $38.42 billion versus expectations of $40.7B. PPI was up 1.1% versus a pre-report estimate of 0.8%. Weekly Jobless Claims were up 35K versus expectations of down 2K. Personally I prefer the short side of the market on rallies. We remain long out of the money puts and/or put spreads in the June and Sept. 2012 Eurodollars.

Grains: Yesterday Mar. Beans closed 58 cents higher, Mar. Corn 24 higher and Mar. Wheat 11 higher. Over night Beans were up 6, Corn up 9 and Wheat up 6. Support for Mar. Beans is currently 1394'0 and resistance 1432'0. Support for Mar. Corn is currently is currently 619'0 with no resistance at the present time as the market is essentially on contract highs. We remain short the Mar. Beans 1300'0 strangle with our remaining positions at a small loss with the market closing at 141'0.

Cattle: Yesterday Live Cattle closed sharply highly on new contract highs above 110.00 for the nearby Feb. contract. Feeder Cattle also closed on new high ground, above the 126.00 level for the Mar. contract. I remain on the sidelines.

Silver: Mar. Silver is currently 6 cents lower at 29.48. We remain long out of the money call spreads on the Mar. contract. I will be a buyer below the 27.50 level if the market allows.

S&P's: Mar. S&P's are currently 3.00 lower at 1280.50. I still feel that the market is in long term resistance even though it is trading above yesterday's resistance of 1279.00. Support remains at 1256.00. I prefer the short side of the market.

Currencies: As of this writing the Mar. Euro is trading 171 higher at 1.3298, the Swiss 25 higher at 1.0373, the Yen 11 higher at 1.2081 and the Pound 78 higher at 1.5836. Better than expected interest in bond auctions for European sovereign debt has rallied the Euro over the last 2 sessions. We were stopped out of all remaining short positions in the Euro when the market traded above the 1.3080 level. I will once again be looking to go short above the 1.3400 level. We remain short the Swiss with a protective buy stop in the 1.0404 area.

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