Financials: Dec. Bonds are cuurently 7 lower at 138^30 and the 10 Yr. Notes 5 lower at 129^10. As mentioned yesterday the Bonds have given a minor sell signal by trading below the 139^10 level. Also the spread between the 10 Yr. Notes and 30 Yr. Bond is now under the 10’00 level premium the Bonds. I recommend buying out of the money puts on either the Bonds or the 10 Yr. Notes. I am recommending puts as opposed to futures because of the limited risk. You also might consider the long 10 Yr. Note/ short Bond spread on market rallies.

Grains: Yesterday beans closed 24 cents lower, Corn 23 lower and Wheat 8 lower. Over night Beans were 7 higher, Corn 3 higher and Wheat 5 higher. No doubt yesterday’s sharp break has done technical damage and sentiment has turned from positive to negative. I currently remain long Dec. Corn futures and out of the money call spreads. I am going to hang on to these positions for the moment and will reconsider these position Monday.

Cattle: Yesterday Oct. Live Cattle closed 210 lower at 118.90 and Oct. Feeder Cattle 120 lower at 137.775. We remain short Oct. LC and will use a protective buy stop at 121.75. If the market trades below the 118.00 level, lower your buy stop to your break even level.

Silver: Dec. Silver is currently 60 cents higher at 40.11. We remain on the sidelines awating a break below the 39.00 level to reinstate long positions if the market allows.

S&P’s: Dec. S&P’s are currently 1.00 lower at 1203.00. We continue to retain a short bias to this market. Support is currently 1168.00 and esistance has been raised to the 1213.00 level.

Currencies: As of this writing the Dec. Euro is 88 lower at 1.3787, the Swiss 62 lower at 1.1468, the Yen 22 lower at 1.3041 and the Pound 5 higher at 1.5798. We remain long the Oct. Yen 1.24 put. If you sold short the Euro above the 1.3800 level, I recommend using a protective buy stop just above the 1.4000 level. If the market trades below the 1.37.. level either take profits or lower your buy stop to your break even level.

Regards,
Marc

Questions? Ask Marc Nemenoff today at 312-264-4310

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