Financials: Bonds are currently 13 higher at 119'10. We continue to hold the combination of short Dec. Bonds and short the Jan. Bond 115'00 put. We continue to have a GTC order to cover the short Jan. 115'00 put at 18 points. Yesterday the market gave a buying opportunity for short term traders as the market tested the 117'20 level of support. The market made a momentary low of 117'10 as the market sold off after the results were in on the selling of 16 billion dollars worth of 30 Yr. Bonds as part of the quarterly refunding. It is my understanding the average yield was 4.46%, slightly more than had been expected. This break was trumped as the equity and precious metals markets sold off later in the session. We are now near the 119'00 resistance area and I recommend the short side of the market.

Grains: Yesterday Beans were 18 cents higher, Corn 3 lower and Wheat unchanged. Over night Beans were 3 higher, Corn fractionally lower and Wheat 3 lower. We are currently on the sidelines. However, I do favor the long side of the market on sharp breaks.

Cattle: Yesterday Dec. Cattle closed 80 lower at 82.80. The long Dec./ short Apr. spread closed about unchanged at 477 premium the Apr. We continue to hold this spread. We also went long Dec. Cattle below the 83.80 level and will use a protective sell stop 300 points below entry level. The market is currently slightly higher with the Dec. trading at 83.00.

Silver: Dec. Silver is currently 14 cents lower at 17.13. We remain long out of the money call spreads on the July contract. I still feel that this market is subject to a break and I am avoiding futures contracts at the moment. The market needs a close above the 18.40 level to convince me that there is upside potential.

S&P's: Dec. S&P's are currently about unchanged at 1087.50. I remain on the sidelines.

Currencies: As of this writing the Dec. Euro is 28 lower at 1.4835, the Swiss 16 lower at .9826, the Yen 77 higher at 1.1150 and the Pound 56 higher at 1.6623. As mentioned yesterday I am looking for a near term recovery in the dollar and favor out of the money puts in the Euro and/or out of the money calls in the Dollar Index. The Dec. Dollar Index is currently 2 lower at 75.67. We continue to hold long puts in the Yen and long put spreads in the Pound. These positions need a substantial break in both the yen and the Pound to come into the money before the Dec. expirations.

I welcome your comments and suggestions.

Regards,

                Marc