Global Tensions Support Bonds and Precious Metals

Financials: Sept. Bonds are currently 8 higher at 138’10, 10 Yr. Notes 1 higher at 125’10.5 and 5 Yr. Notes 0.5 lower at 119’05.5. Global tensions (Ukraine, Israel, Iraq, etc.) are providing underlying support to these markets at the moment. On Friday recommended the long 10 Yr./short Bond spread around the 12’16 area and once again find us brhind the spread which is currently trading at 13’00. I’m inclined to give this position a bit of both room and time to let it come back and begin to work. Support on the Bonds is currently 136’17 and resistance the 139’00 area. To keep things in persceptive the most recent high for a lead month contract is 139’03 made on May 29th 2014. I am still interested doing the long June 2015/short June 2017 Eurodollar futures spread below 185 premium the June 2015 should the opportunity present itself.

Grains: Dec Corn is currently 6’0 lower at 373’0, Nov. beans 14’2 lower at 1071’0 and Dec. Wheat 4’2 lower at 552’0. I must say I’m a bit surprised by this mornings weakness in spite of great growing conditions and a strong dollar. Corn prices are back to levels not seen since Aug. 2010. We remain long Dec. corn from the 385’0 level with a protective sell stop at 363’2.

Cattle: We remain on the sidelines at current price levels.

Silver: Sept. Silver is currently 20 cents higher at 21.10 and Aug. Gold 7.00 higher at 1316.50. We remain long Silver. We continue to look at Gold as a trading affair from the long side on sharp breaks.

S&P's: Sept. S&P’s are currently 7.00 lower at 1964.50. Needless to say Equities have been quite volatile over the last few sessions as the market responed to international news such as the Ukraine and Israel. The market still favors the bulls as evidenced the market’s ability to absorb such news and come back. That being said I am cognizant of the fact that new highs were not made on Friday’s rally. I am not yet ready to have a net position and continue to hold a combination of short futures and short the Sept. 1900 put.

Currencies: As of this writing the Sept. Euro is currently unchanged at 1.3528, the Swiss 1 higher at 1.1142, the Yen 5 higher at 0.9875 and the Pound 23 lower at 1.7063. Of note: On Friday the Euro traded below the 1.3500 level for the first time since Feb. 2014. We continue to hold short biased positions in the Euro.