Financials: Sept. Bonds are currently 1'05 higher, the 10 Yr. Notes 20 higher, the 5 Yr. Notes 14 higher and the 2 Yr. Notes 2 higher. Dec. Eurodollars are 1 higher at 99.270. We remain short the Dec. Eurodollars. As mentioned over the last few sessions I am looking at Sept. Bonds as a trading market for short term trades only. Support is now 118'06 and resistance remains at 120'24.
Grains: Yesterday Beans were about 25 cents higher with little change in the old crop/new crop spreads. Corn was about 5 cents higher and Wheat 5 higher. Over night Beans were 7 lower, Corn fractionally higher and Wheat 3 lower. I remain on the sidelines. As mentioned over the last few days, if the Nov. Beans trade sharply lower (40 cents or more), I will be willing to go short out of the money puts with a strike price of 800'0 or lower and risk about $600.
Cattle: Yesterday Live Cattle closed 12-50 higher with the nearby Aug. contract closing 12 higher at 83.47 and Oct. closing 50 higher at 88.82. We are currently on the sidelines having been stopped out of a recent long position with a 125 point loss.
Silver: Sept. Silver is currently 34 cents lower at 12.58. The next major level of support is the 11.75-12.00 area. I feel that a break below the 12.00 level will be a buying opportunity. As I have mentioned in the past, think of silver as an alternative investment. Each mini contract has a value of 1000 times the price, i.e. at 12.00 the contract is worth $12,000. If you are looking to hedge your overall portfolio, buy the number of contracts that would be equal to 6-10% of your portfolio. If you are looking at Silver as just a trading vehicle, use stops for protection.
S&P's: Sept. S&P's are currently 7.50 lower at 871.50. Continue to treat as a trading market between the 868.00 and 887.00 areas. I still prefer the long side of the market on breaks below the 872.00 level.
Currencies: As of this writing the Sept. Euro is 123 lower at 1.3912, the Swiss 89 lower, the Yen 90 higher and the Pound 190 lower at 1.6167. Yesterday my buy stop was at 1.6290 was penetrated taking us out of a recent short position from the 1.6600 area. I feel that the Pound is still headed lower but will wait until next week before re-entering this market. Next week I will also be looking at the Yen. If the Yen trades above 1.1100 (90 to the dollar) I will be looking to go long out of the money puts or put spreads. The Sept. Dollar Index is currently 57 higher at 80.62.