S&P's: June S&P’s are currently 11.50 lower at 913.25. As I have stated over the last week I feel that this market is trading at unrealistic levels given the recent Unemployment Report and the degree that this market has rallied off of the bottom, nearly 32%. It also seems to me that the result of the recent “stress tests”, showing that B of A needs to raise an additional 34 billion dollars and Citigroup 5 billion, indicates that the economy is still not out of woods, so to speak. I continue to recommend trading this market from the short side. My downside objective at the moment is the 875.00 level.
Financials: Bonds are currently 25 higher at 121’04, the 10 Yr. Notes 20 higher, the 5 Yr. Notes 11 higher and the 2 Yr. Notes 3 higher at 108’23. Dec. Eurodollars are 3 higher at 98.93. We continue to remain short the June 2 Yr. Notes and/or the 5 Yr. Notes with a downside objective of 108’12 on the 2 Yr. Notes. We also remain short the Dec. Eurodollars. As mentioned last week I am a bit friendly to the June Bonds and have been recommending being either short out of the money puts or long out of the money calls. If the Bonds trade as high as 125’00 this week, take profits on any long call positions.
Grains: On Friday Beans were 9 cents higher, Corn 9 higher and Wheat 20 higher. Over night Beans were 16 cents lower, Corn 3 lower and Wheat 3 lower. We continue to remain long out of money calls and/or call spreads in July Corn. If you remain long July Wheat either take profits or raise your protective sell stop to the 573’0 level. This afternoon there will be a crop progress report and tomorrow morning Crop Production and Supply/Demand.
Cattle: On Friday Live Cattle closed 87 to 107 higher with the nearby June contract closing 95 higher at 82.97. My near term objective of 83.30 has been realized (Friday’s high: 83.40) for June Cattle. If you remain long either take profits or raise your sell stop to the 81.70 level. The next objective is the 84.10 level. If the market reaches 84.10 raise your sell stop to the 82.90 level or take profits on remaining long positions.
Silver: June Silver is currently 18 cents lower at 13.75. This market is acting pretty good overall but I still feel it is somewhat overbought at current levels and I will wait for a setback below 13.50 before entering the market from the long side. I am currently on the sidelines.
Currencies: As of this writing the June Euro is 40 lower at 1.3578, the Swiss 18 lower, the Yen 60 higher and the Pound 105 lower at 1.5110. We remain short the Pound with a downside objective in the 1.4870 area. The June Dollar Index is currently 21 higher at 82.85. Last week we recommend going long below the 83.30 level, the market traded as low as 82.40 giving ample opportunity to enter the market from the long side. We are currently using a protective sell stop at 81.65 on this position.