Financials: Dec. Bonds are currently 26 higher at 150'27 and the 10 Yr. Note 8.5 higher at 133'19. Over the last few sessions Dec. Bonds tested support in the 150'04 level and then some, making a recent low of 149'23 on November 23rd giving us an opportunity to cover recent short sales from the 152'04 area. Coming in this morning I am on the sidelines. My bias remains on the short side of this market but as I have stated over the last few weeks I am willing to be patient and let the market come to our price at resistance in the 152'04 area before initiating a trade.
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Grains: Dec. Corn is currently 5'0 higher at 750'4, Jan. Beans 8'6 higher at 1427'4 and Dec. Wheat 3'6 higher at 851'4. If you remain long Jan. Beans either take profits or raise your protective sell stop to the 1413'0 level. If you remain long Dec. Corn either take profits or raise your protective sell stop to the 739'0 level. Be prepared to roll your Dec. futures positions into the Mar. contract by the end of the week to avoid the possibility of delivery as first notice day for the Dec. contract is this Friday. The Dec. Corn 800'0 call went off the board worthless. We remain long the Mar. Corn 800'0/850'0 call spread and will make a decision whether or not to keep this position sometime in the next 2 weeks. Of note: Wheat is once again starting to look interesting as talk of drought conditions in Kansas is starting to hit the media. Stay tuned.
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Cattle: Dec. LC closed Friday at 128.95 at it's highest level since late Sept. as the dollar weakened and export demand has slightly picked up amid tight supplies. Jan. FC have shown slight improvement over the last few sessions closing out the week about 225 higher at 147.875 and have now established support just under the 145.00 level. To be honest it is hard for me to get very bullish these markets given the current high prices for Feb. and Apr. contracts. As I have mentioned over the past months I feel that April Cattle priced in the 130's is fairly priced and I do not feel there will be a major price move. That being said, I would recommend that producers start looking for hedging opportunities with either futures or options in LC. Producers who need to hedge Feeder Cattle from the short side of the market I recommend using only options as I feel there could be some more upside potential.
Silver: Dec. Silver is currently 5 cents higher at 34.15 and Dec. Gold 2.00 dollars lower at 1749.00. We remain long Silver.
S&P's: Dec. S&P's are currently 5.00 lower at 1400.00. Black Friday retail sales euphoria carried the market to the upside testing resistance in the 1407.00 area (see Report from 11/20/2012). The market will be closely watching Congressional and Executive Branch discussions of the upcoming "Fiscal Cliff". At the moment I remain overall negative and will be a seller on rallies to resistance in the 1407.00 area and be willing to carry a small short position. Support is currently the 1371.00 area.
Currencies: As of this writing the Dec. Euro is trading 20 lower at 1.2968, the Swiss 19 lower at 1.0767, the Yen 39 higher at 1.2180 and the Pound 31 lower at 1.6013. On Friday the Yen approached my initial support level of the 1.2000 area trading below the 1.2100 level (1.2074) for the first time since early Apr. of 2012. If you remain short the Yen either take profits or lower your protective buy stop from the 1.2340 level to the 1.2260 area. I will once again be looking to the short side of the Euro in the 1.3150 area if the market allows.
Regards,
Marc
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