Financials: Sept. Bonds are currently 7 lower at 124'17. Yesterday the market rallied on a disappointing Existing Homes Sales Report. This morning we have a New Homes Sales Report at 9:00 and this afternoon the results of the FOMC meeting. We continue to hold the combination of short Bonds and short the Sept. Bonds 120'00 put.
Grains: Yesterday Beans were 2 cents higher, Corn 3 lower and Wheat 1 lower. Over night Beans were 2 lower, Corn 1 lower and Wheat 4 higher. If you remain long July Beans either take profits or continue to use a protective sell stop at 957'0. We currently do not have a speculative position in Corn. We remain long out of the money call spreads in Nov. Beans. A bit of history on this position: In early April we originally went long the Nov. Beans 1020'0/1060'0 call spread at 8'0 premium the 1020'0 call. We subsequently bought the 1060'0 call and sold the 1040'0 call for 5'0 in late April, leaving us with the long 1020'0/short 1040'0 call spread with an effective cost of 3'0 plus commissions. This spread is currently trading at about 4'4.
Cattle: Yesterday Live Cattle closed 10 higher to 52 lower with the active Aug. contract closing 52 lower. Feeder Cattle closed moderately higher. The market rallied hsarply early in the session due to talks of diseased hogs in Canada fearing the possibility that Cattle could be affected as well. So far no reports of this have come from Canadian government agencies to the best of my knowledge. By the end of the session both Live and Feeder Cattle gave up their early gains. I am still looking to reinstate a long position in Aug. Live Cattle below the 87.50 level if the market allows.
Silver: July Silver is currently 21 cents lower at 18.68. I remain on the sidelines. My only recommendation remains a combination of being long the Dec. Silver 20/22 call spread from the 50 cent ($2500) level and short a mini-Silver contract as a means of limiting risk.
S&P's: Sept. S&P's are currently 2.00 lower at 1092.50. Yesterday's negative Existing Home Sales Report caused a sell off pushing the market through near term support of 1102.00. Support now returns to the 1079.00 level. We remain short the Sept. 1140 call as a speculative trade.
Currencies: As of this writing the Sept. Euro is unchanged at 1.2272, the Swiss 14 lower at .9030, the Yen 40 higher at 1.1104 and the Pound 100 higher at 1.4912. I recommend covering short futures positions in the Euro and staying on the sidelines. I do, however, want to stay short the out of the money calls ( we are currently short the Sept. Euro 1.28 calls). I am also looking to the short side of the Yen once again above the 1.1250 level.