Financials: Dec. Bonds are currently 1’08 lower at 139’03. At 8:00 (Chicago time) it was announced that there would be a coordinated effort by Major Central Banks (U.S., England, Japan, Swiss) to provide “liquidity-providing operations” by conducting three dollar- tenders before the end of the year with maturity of 3 months. The new dollar operations will be conducted in addition to banks current weekly dollar swaps. The result: Bonds broke, EuroFX and Equity Index futures rallied. To be honest I haven’t quite absorbed the long term implications but suspect that this means the printing presses will be busy printing more dollars adding inflationary pressure. Bonds have broken yesterday’s support of 139’10 signalling the possibilty that the bull “run” may be coming to an end.
Grains: Yesterday beans closed 7 cents lower, Corn 1 higher and Wheat 2 higher. Over night Beans were 2 lower, Corn 5 lower and Wheat 5 lower. How the market opens is anybody’s guess at this point as the market has yet to factor in the weak dollar this morning. We remain long Dec. Corn and/or out of the money calls from below the 735’0 level.
Cattle: Oct. LC is currently is currently 25 higher at 121.25 and Oct. FC 25 higher at 139.20. We remain short Oct. LOC from above the 119.00. This trade is currently against us. I am willing to give it some room but will recommend a stop loss level tomorrow.
Silver: Dec. Silver is currently 35 cents lower at 40.18. I remain on the sidelines and will reinstate long positions below the 39.00 level if the market allows. Dec. Gold is currently 35.00 lower at 1790.00. I still expect a test of the 1710.00 level.
S&P’s: Dec. S&P’s are currently 10.00 higher at 1192.00. A coordinated Central Bank liquity program (see Financials comment) announced earlier this morning discounted a slightly negative weekly unemployment claims report. We are short from yesterday’s resistant level of 1176.00-1184.00. Support remains the 1146.00 area with resistance now the 1200.00 level.
Currencies: As of this writing the Dec. Euro is currently 129 higher, the Swiss 103 higher at 1.1550, the Yen30 lower at 1.3035 and the Pound 57 higher at 1.5812. We remain long the Oct. Yen 1.2400. Central Bank efforts to provide liquidity (see Financials comment) has rallied the Euro enough that I am now recommending trading it from the short side once again.
Regards,
Marc
Questions? Ask Marc Nemenoff today at 312-264-4310
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