Financials: Dec. Bonds are currently 6 higher at 152’24, 10 Yr. Notes 4 higher at 125’11.5 and 5 Yr. Notes 2.2 higher at 117’13.5. Yesterday’s release of the FOMC minutes told us nothing new and continues the passive/aggressive stance of the possibility of a rate hike before year’s end. If you went long on last week’s recommended levels of 151’25 in the Bonds or 124’30 in the 10 Yr. Notes either take profits or use a close protective sell stop. I will be looking to return to the short side of the market above the 154’12 level in Bonds.
Grains: Dec. Corn is fractionally higher at 346’2, Nov. Beans 2’6 higher 968’0 and Dec. Wheat 1’0 higher at 434’2. After being on the sidelines for some time I am looking to be a buyer on a sharp break from current levels, 337’0 in Dec. Corn and 947’0 in Nov. Beans. My thinking is a weaker Dollar and the current rally in metals and other commodities could be infectious to the grains. “A rising tide lifts all boats.”
Cattle: Live and Feeder Cattle have moved higher in the past week making new contract highs in some deferred contracts. Unlike my somewhat friendly Grain comment, I feel that all the factors that make me friendly to Grains and other commodities will limit upside potential for Live and Feeder Cattle. High feed cost, less disposable income because of higher oil related products (heating oil and gasoline), etc. I will be a seller in Apr. LC in the 123.00-124.00 area.
Silver: Dec. Silver is currently 10 cents higher at 17.23. We remain long a small position. If you are holding multiple contracts, take some profits. Near term resistance is the 17.45 area. If this level is penetrated my objective will be the 18.20 area.
S&P’s: Dec. S&P’s are currently 3.50 lower at 2549.50. I am once again willing to enter this market. However I’m going to try a slightly different strategy. I’m selling futures and selling the Dec.2400 put (currently at 11.25) in an effort to lessen my risk.
Currencies: As of this writing the Dec. Euro is currently 13 lower at 1.1884, the Yen 3 lower at 0.89190, the Pound 86 lower at 1.3158 and the Dollar Index 17.5 higher at 93.000. The Dollar lost ground last week as the Euro rallied. If you remain short the Pond, either take profits or lower your stop from 1.3315 to 1.3250.
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