Financials: Dec. Bonds are currently 1’28 higher at 145’02 and the 10 Yr. Note 23 higher at 131’15. Rates are once again near record lows. As expected the FOMC announced “Operation Twist” and will SELL about 4 billion dollars worth of short term treasury’s (3 years and less) and PURCHASE a like amount of longer term treasury’s (6-30 years) over time. The market response was as predicted. After waiting on the sidelines for the last month or so, I feel it is now time to contemplate a short futures position. “Buy the rumor, sell the fact”, who this quote is attributable to I have no idea.

Grains: Yesterday Beans were 17 cents lower, Corn 4 lower and Wheat 8 lower. Over night Beans were 26 lower, Corn 19 lower and Wheat 20 lower. This markets are lower in sympathy with all other markets in what can only be described as a world wide sell off of just about everything. We remain long out of the money calls and/or call spreads in Dec. Corn.

Cattle: This morning Live and Feeder Cattle are sharply lower as producers are now worried about demand. We have recently covered short positions and are currently on the sidelines.

Silver: Sept. Silver is currently 3.24 lower at 37.23. The market is now comfortably below the 39.00 level. If Silver is part of your strategic porfolio, I recommend starting to accumulate a small long position. Of note: The 200 day moving average (which is popular among portfolio managers) is at 36.05. Dec. Gold is currently 70.00 lower at 1737.00. Support is still the 1710.00 level.

S&P’s: Dec. S&P’s are currently 26.00 lower at 1130.00. This market has met and exceeded my downside objectives. Fear of Soveriegn Debt, world wide bank capitalization problems, disappointing Chinese manufacturing data all have provided the “perfect storm”. I recommend covering all short positions and start looking for a buying opportunity should the market break below the 1090.00 level.

Currencies: As of this writing the Dec. Euro is currently 230 lower at 1.3435, the Swiss 156 lower at 1.1051, the Yen 50 higher at 1.3119 and the Pound 205 lower at 1.5361. If you are short any of the European currencies from yesterday’s rally before the FOMC comments take profits and stand aside. I feel these markets still have a way to go on the downside , but again will wait for a rally before re-entering the short side. We remain long out of the money Oct. Yen 1.24 puts.

Regards,
Marc

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