Financials: Bonds are currently 11 lower at 118’23, the 10 Yr. Notes 6 lower at 117’31, the 5 Yr. Notes 3 lower at 116’06 and the 2 Yr. Notes 1 lower at 108’24. If you continue to hold the combination of short Bond futures and short the 116’00 put, my recommendation for you remains the same. If the market allows cover the 116’00 put at 15 points (yesterday it traded at 16, currently at 30). If you cover the put at 15 I would sell a Jan. 115’00 put at 1’00 or better to replace it. Of course the best case scenario would be that the Bonds drop below the 116’00 level and you ultimately get assigned a long position against your short future at 116’00 + the premium you collected from being short the 166’00 put.
Grains: Yesterday Beans were 12 cents higher, Corn 7 higher and Wheat 1 lower. Over night Beans were 8 higher, Corn 4 higher and Wheat 10 higher. A weak dollar and delayed harvest continue to push prices higher. Hedgers take note of Jan. Bean and Mar. Corn prices. I remain a buyer on breaks.
Cattle: Yesterday Dec. Cattle closed 52 lower at 85.70. The long Dec. /short Apr. spread lost 42 points closing at 3.55 premium the Apr. We continue to hold this spread which is currently at a 75 point ($300) loss. I feel that once we get closer to Dec. 1 this spread could narrow substantially with the Dec. gaining on the Apr.
Silver: Dec. Silver is currently 28 cents higher at 17.46. Yesterday it was reported the India’s central bank bought 200 metric tons of Gold pushing precious metals prices sharply higher. We remain long out of the money call spreads.
S&P's: Dec. S&P’s are currently 7.00 higher at 1048.75. We remain negative on this market, but caution against sharp rallies and recommend using either stops or options to protect existing short futures and/or long put positions (see yesterday’s report).
Currencies: As of this writing the Dec. Euro is 86 higher at 1.4787, the Swiss 57 higher at .9794, the Yen 57 lower at 1.1016 and the Pound 120 higher at 1.6518. We remain long out of the money puts in the Yen and long out of the money put spreads in the Pound. The Dec. Dollar Index is currently 35 lower 76.22.