Financials: Dec. Bonds are currently 12 lower at 120'10, the 10 Yr. Notes 7 lower at 117'16, the 5 Yr. Notes 2 lower at 115'24 and the 2 Yr. Notes 1 lower at 108'10. My only remaining positions: short the Dec. Bonds and the Dec. Bonds 116'00 put. This mornings Unemployment Report showed the following: Non-farm payrolls down 216,000 versus an average estimate of down 233,000. July's report was revised to down 463,000 from 443,000. The unemployment rate is 9.7% versus expectations of 9.5%. I must say that I feel there is something in the wind so to speak. Short term rates, TBills and Eurodollars, have stayed too low for too long. Gold and Silver have rallied in the last few days against all major currencies, not just the dollar. Rumors of bank failures, flights to quality such as Gold and Silver, Bonds and short term instruments have buoyed these markets over the last few sessions. Given all this, I am going to err on the side of caution and not recommend any new positions for a few days.
Grains: Yesterday Nov. Beans closed 9 lower, Dec. corn 3 lower and Dec. Wheat 7 lower. Over night Beans were unchanged, Corn 2 lower and Wheat fractionally lower. We remain long Nov. Beans with a protective sell stop at 913'0. We also remain long out of the money calls and/or call spreads in Dec. Corn. I am not recommending any new positions before the Holiday weekend.
Cattle: Yesterday Oct. Cattle closed 5 lower at 86.72. The market gave a short term profit taking opportunity above 87.00, making a high if 87.15 on Thursday. If you remain long raise your sell stop to your break even level.
Silver: Dec. Silver is currently 30 cents lower at 15.99. Yesterday the market rallied as high as 16.31 on what I can only describe as speculation and flight to quality. We have taken partial profits (for those of you with multiple positions) and must admit that I feel more comfortable with a reduced position. I am not recommending adding at this time. The next major level of resistance is the 17.00 area.
S&P's: Sept. S&P's are currently 1.00 higher at 1003.00. The market gave a selling opportunity on this mornings rally to 1009.75 just after the Unemployment Report. As mentioned in my comments in the Financials section of this report, I feel it is prudent to take some sort of portfolio protection, especially given the market run up since March. Consider going long out of the money puts in the Dec. contract. The current value of a mini S&P contract is $50,150 ($50.00 times the index). If you are short the futures, I feel the risk is new contract highs. Near term support remains at 983.00.
Currencies: As of this writing the Sept. Euro is 35 lower at 1.4215, the Swiss 41 lower at .9370, the Yen 39 lower at 1.0767 and the Pound 14 lower at 1.6314. We remain long out of money puts and/or put spreads in both the Dec. Yen and the Dec. Pound. The Sept. Dollar Index is currently 12 higher at 78.64. On Monday I will be quoting the Dec. contracts.