Financials: Bonds are currently 6 lower at 122'18, the 10 Yr. Notes 7 lower, the 5 Yr. Notes 4 lower and the 2 Yr. Notes 1 lower at 108'22. Dec. Eurodollars are presently 2 lower at 98.750. We remain short the June 2 Yr. Notes and/or the 5 Yr. Notes with a downside objective of 108'12 for the 2 Yr. Notes. We also remain short the Dec. Eurodollars with a downside objective of 98.610. Yesterday's results of the FOMC meeting left interest rates unchanged with a target for Fed Funds at 0-0.25%. The language was what traders were looking at. The bottom line, the Fed feels that the pace of decline in GDP and the economy as a whole will slow in the coming months. They also believe that housing will stabilize. As mentioned in yesterday mornings letter, I was willing to try the long side of the Bonds on a break to the mid to low 123'00 area. We were stopped out when the market traded through the 122'20 level. For the near term I feel that yesterday's low for June Bonds at 121'25 will probably hold in next few sessions. Resistance is now the 124'12 level.
Grains: Yesterday Beans were 44 cents higher, Corn 18 higher and Wheat 13 higher. Over night Beans were up 14, Corn up 2 and Wheat up 5. The market has now recovered Sunday night's losses and then some. As mentioned earlier in the week I could not understand why Swine Flu would have such an effect on the grains. Unfortunately I didn't buy into the break but instead was stopped out of recent long positions in July Corn and Wheat. We do however remain long calls and/or call spreads in July Corn. I will be a buyer on a 10 cent set back in July Corn and Wheat. Argentina has dropped their estimate of Soybean production by 3 million tonnes to 34 million contributing to the current rally.
Cattle: Yesterday Live Cattle closed 85-100 higher with the June contract closing 100 higher at 82.95. The market is now holding the 82.00 area and I will be looking to go long on a setback with a protective sell stop at 80.75.
Silver: July silver is currently 40 cents lower at 12.37. If you remain long continue to use a protective sell stop at 12.23. If this level is broken I will be a buyer on a break below the 11.85 level.
S& P's: S& P's are currently 12.50 higher at 881.50. Yesterday we were stopped out of our short positions when the market rallied through the 874.00 level. Near term support is currently 857.00 and resistance 888.00. Treat as a trading market between support and resistance.
Currencies: As of this writing the June Euro is 68 lower at 1.32259, the Swiss 31 lower, the Yen 83 lower and the Pound 16 higher at 1.4783. As mentioned yesterday I am looking to be a seller in the Pound above the 1.4950 level. The over night high was 1.4953. If you went short, either take the short term profit or use a protective buy stop at 1.5100. The June Dollar Index is currently 29 higher at 84.945.