Financials: Sept. Bonds are currently 11 lower at 114’26, the 10 Yr. Notes 11 lower at 114’14, the 5 Yr. Notes 8 lower at 113’12 and the 2 Yr. Notes 2 lower at 107’21. Dec. Eurodollars are 4 lower at 98.890. I had been out of town for a few days so let me give you a recap of the last few days. Mid week (last week) we covered short positions in the Sept. 2 Yr. Notes below 107’18 and the Dec. Eurodollars below 98.650. The Bonds were trading at about 113’00. Since that time the Bonds traded as low as 111’21 and as high as 115’20. The predominant trend on these markets is still down and I am looking to re-establish a short position in Dec. Eurodollars above the 98.920 level. As for Bonds, resistance is in the 116’00 to 116’08 area, a level where I am also willing to try the short side of the market.
S&P's: Sept. S&P’s are currently 4.00 higher at 923.50. Given the fact the market was not able to settle above the 95.00 level last week makes me a bit negative the market on rallies above the 940.00 level. Near term support is currently 914.00; longer term support is in the 890.00 level.
Grains: Yesterday Beans were 48 cents lower, Corn 19 lower and Wheat 9 lower. Over night Beans were 17 higher, Corn 4 higher and Wheat 6 higher. Our position in July Corn calls and/or call spreads has dropped in value dramatically as we are nearing expiration and also the dramatic recovery in the Dollar over the last few sessions. Given the fact that they are near worthless I recommend taking the loss on any recovery in the futures price. As for futures, I am willing to try the long side of these markets on any further breaks in the Dec. contracts for Corn and Wheat and Nov. Beans.
Cattle: Yesterday Live Cattle closed 57-77 lower with the Aug. contract closing 77 lower at 80.82. The market is currently 17 higher at 81.00. If you remain long, continue to use a protective sell stop at your entry level for Aug. Cattle.
Silver: July Silver is currently 28 cents higher 14.31. Last week we were on the sidelines awaiting a break below the 14.60 level to go long. I still want to be a buyer, and recommend going long at current prices with a 1.00 risk ($1,000 for a mini contract, $5,000 for the full size contract). An alternative would be buying an out of the money call spread in the Dec. contract.
Currencies: As of this writing the Sept. Euro is 115 higher at 1.3890, the Swiss 55 higher, the Yen 56 higher and the Pound 143 higher at 1.6433. The Sept. Dollar Index is currently 55 lower at 81.00. To be honest, I am still on the sidelines in these markets and recommend only trading them from either side of the market with a short term outlook on sharp breaks or rallies.