Financials: Mar. Bonds are currently 12 higher at 149’29 and the 10 Yr. Notes 5.5 higher at 133’23.5. Friday’s Monthly Unemployment Report showed an increase in non-farm payrolls of 146,000 vs. average expectations of an increase of 95,000. The unemployment rate dropped to 7.7% coming in better than expected. On Thurs. the market approached resistance of 151’00 trading as high as 150’28 before breaking to the 149’11 level on Friday as a result of the favorable labor statistics. If by chance you went short on Thursday’s rally and have yet to cover, either take profits or lower your buy stop to the 150’06 level. As I have stated over the last month or so I remain long term negative to the Bonds but will only trade from the short side of the market on strong rallies for short term (1-4 days) trades. I am going to continue to respect the Fed program of “operation twist” for the time being and be wary of selling support. Continue to treat as a trading market between 148’26 and 151’00.
Grains: Mar. Corn is currently 5’0 lower at 732’0, Jan Beans fractionally lower at 1471’4 and Mar. Wheat 3’4 lower at 857’4. We are currently on the sidelines having liquidated long positions last week in Corn and Beans. We remain long the Mar. Corn 800’0/850’0 call spread. If Mar. Corn should continue to trade lower this week I will be looking to cover the short leg of the call spread (the 850’0 call) at 2’0 if the market allows leaving us long the 800’0 call. I will once again be looking to the long side of Mar. Corn below the 722’0 level.
Cattle: On Friday Feb. LC closed 60 lower at 130.40 and Mar. FC 50 higher at 151.15. As expected Feeder Cattle prices have gained on Live Cattle prices as feed grain prices have declined. I continue to recommend looking for hedging opportunities using futures in Live Cattle and options in Feeder Cattle.
Silver: Mar. Silver is currently 28 cents higher at 33.41 and Feb. Gold 11.00 dollars higher at 1716.00. We remain long Silver. If you added to your core position in the 32.75 area either take profits on the additional contracts or use a protective sell stop 32.95. If the market trades above 33.50, raise your stop to 33.07. If you remain long Feb. Gold from the 1687.00 area either take profits or raise your sell stop to the 1699.00 level.
S&P's: Dec. S&P’s are currently 1.00 lower at 1415.00. The market is acting pretty good recovering from declines to the the 1411.00 level on news of the impending resignation of the Italian P.M. and the possible resurrectionof the political career of former leader Berlusconi. That being said, I continue to like the short side of this market above the 1420.00 level. Support remains in the 1385.00 area. Mar. will be considered the lead contract by next week.
Currencies: As of this writing the Dec. Euro is currently 10 higher at 1.2938, the Swiss 15 higher at 1.0716, the Yen 27 higher at 1.2165 and the Pound 57 higher at 1.6092. I am currently on the sidelines. As of Wed. I will be quoting Mar. contracts. Dec. contracts go off the board on Dec. 17th.
