Financials: Bonds are currently 10 higher at 117’00, the 10 Yr. Notes 4 higher, the 5 Yr. Notes 1 higher and the 2 Yr. Notes 2 lower at 108’25. Dec. Eurodollars are about unchanged at 98.985. We remain short the June 2 Yr. Notes and the Dec. Eurodollars. I recommend “rolling” the June 2 Yr. Notes into the Sept. contract as first notice day is coming up for the June contract. Yesterday’s 35 Billion dollar auction of 5 Yr. Notes went fairly well but the market fell on the long end of the yield curve (10 Yr. and 30 Yr.) as traders continue to worry about supply. As is the case with markets, things tend to get over done on both the upside and the downside. I feel that Bonds are oversold at this time and caution against getting short at such reduced levels. There is no question that the predominant trend in Bonds is down but I feel that there will be a retracement to the upside.

S&P's: June S&P’s are currently 2.50 higher at 895.00. If you went short at yesterday’s resistance levels of 908.00-914.00 either take profits or use a protective buy stop at 906.00. Near term support is currently the 886.00 level. The market has met my near term objectives and I am presently on the sidelines.