Financials: Dec. Bonds are currently 22 higher at 151'17 and the 10 Yr. Notes 8 higher at 133'31. As of tomorrow we will be quoting the March contracts which will be considered the lead contract as the Dec. contract approaches first notice day for delivery. The March contract is currently trading 1'10 discount to the Dec. at 150'07. Support for March is currently 148'26 and resistance in the 151'00 area. The "Fed" is scheduled to buy long dated treasuries (6-30 years) throughout the day as part of its' ongoing "Operation Twist" stimulus program. Along with buying long dated treasuries it is expected that the Fed will be selling short term treasuries (3 months to 3 years). As mentioned Monday, I am currently on the sidelines with a long term negative bias and will use sharp rallies to resistance levels as selling opportunites for short and medium (1-10day) term trades.
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Grains: Dec. Corn is currently 2'6 lower at 757'2, Jan. Beans 6'0 lower at 1443'2 and Dec. Wheat 5'4 lower at 867'4. If you remain long Jan. Beans either take profits or raise your protective sell stop to the 1433'0 level. If you remain long Dec. Corn either take profits or roll your position into the Mar. Contract and use a protective sell stop at 748'4. We remain long the Mar. Corn 800'0/850'0 call spread. As of tomorrow I will be quoting the Mar. contracts for both Corn and Wheat.
Cattle: Dec. LC are currently 12 higher at 128.50 and Jan. FC 22 lower at 146.70. As of tomorrow we will be quoting Feb. LC and Mar. FC. As far as speculative positions are concerned I am on the sidelines feeling that the market is currently fairly priced for Live Cattle. I do feel that if the grain market starts to stall Feeder Cattle prices could improve. Producers of Live Cattle should be looking for hedging opportunites in Feb., Apr. and June contracts. Producers of Feeder Cattle who use short hedges should consider using put options for price insurance as opposed to futures because of the possible upward potential of the FC market.
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Silver: Mar. Silver is currently 60 cents lower at 33.46 and Feb. Gold 29.00 lower at 1715.00. These markets have broken through short term support levels this mornings as the Dollar has improved. We remain long Silver as a long term trade. I will be interested in adding to the Silver position below the 32.75 level with a 1.00 dollar risk for additional contacts to our base position. Gold is once again nearing the 1687.00-1705.00 support area. If Gold trades below the 1700.00 level I will try the long side of the market. Friday is first notice day for delivery on Dec. contracts, roll positions in Silver to Mar. and any positions in Gold to either Feb. or Apr.
S&P's: Dec. S&P's are currently 5.75 lower at 1391.50. My bias remains to the short side of the market on rallies to the 1407.00 resistance area. If you went short yesterday either take profits or use a protective buy stop at 1401.00. If the market trades below the 1389.00 level lower your buy stop to the 1395.00 level. Near term support is currently the 1385.00 level. If this level is pentrated the next levels of support will be 1371.00 then 1350.00.
Currencies: As of this writing the Dec. Euro is currently 46 lower at 1.2890, the Swiss 34 lower at 1.0713, the Yen 49 higher at at 1.2221 and the Pound 48 lower at 1.5968. If you remain short the Yen either take profits or continue to use a protective buy stop in the 1.2260 area.
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