Financials: Bonds are currently 1'01 lower at 119'00, the 10 Yr. Notes 17 lower, the 5 Yr. Notes 10 lower and the 2 Yr. Notes 2 lower. Dec. Eurodollars are 2 lower at 99.190. This mornings Retail Sales Report showed an increase of 0.6% versus expectations of 0.5%. PPI came in at up 1.8% versus expectations of an increase of 1.0%. The increase in both of these numbers is being construed as positive to the economy which should cause an increase in inflation for the short term. Hence, higher prices, higher interest rates, lower Bond prices. If you remain short the Bonds, take profits and stand aside. Yesterday's support level of 119'04 has been met and slightly penetrated with this morning's low of 118'210. We remain short Dec. Eurodollars.
Grains: Yesterday Nov. Beans were 5 lower and once again gained sharply on old crop contracts which closed sharply lower. Corn was 1 higher and Wheat 20+ higher. Over night Beans were 5 higher, Corn 3 higher and Wheat fractionally lower. I continue to like the long side of Dec. Wheat on breaks.
Cattle: Yesterday Live Cattle closed sharply higher with the Aug. contract closing 130 higher at 84.77. I must say that this took me by surprise. Reasons given for the sharp rally are: short covering, higher boxed beef prices, upside penetration of the 10 day average, the stock market rally, and lower anticipated placements for the next Cattle on Feed Report. I am not yet convinced. Over the last few months the market has failed several times at the 86.00 level. I have tried the long side of market several times in this period with only moderate success (and some failures). I am on the sidelines.
Silver: Sept. Silver is currently 12 cents higher at 12.89. I am currently on the sidelines. I must note that technically the market may be showing signs of bottoming out.
S&P's: Sept. S&P's are currently 3.50 higher at 899.00. If you remain long and have been using a protective sell stop at 874.00, I recommend taking profits and standing aside. Near term resistance of 887.00 was penetrated with yesterday's sharply higher market. Resistance is now the 903.00 area which was tested with this morning's high of 904.00 just prior to the release of Retail Sales and PPI.
Currencies: As of this writing the Sept. Euro is 18 higher at 1.3992, the Swiss 4 lower, the Yen 27 lower and the Pound 106 higher at 1.6311. I still like the idea of being long out of the money puts and/or put spreads in the Yen. The Sept. Dollar Index is currently 17 lower at 80.13.